Insurance Commissioner to Boost Wildland Fire Insurance coverage to help farmers and ranchers struggling to insure their properties after several years of devastating wildfires, California Farm Bureau reports show


2020 California: Sierra National Forest Creek Fire burn area south of Shaver Lake
Credit: Inciweb

October 25, 2021 – By Kevin Hecteman – California Insurance Commissioner Ricardo Lara is implementing a series of changes to help farmers and ranchers struggling to insure their properties after several years of devastating wildfires.

Lara said he would increase the state’s insurer of last resort’s coverage limit and impose new rules forcing insurance companies to consider fire mitigation efforts when drafting policies. .

Lara made the announcement on Oct. 12 during another round of meetings the Insurance Commissioner held with members of the California Farm Bureau. The last meeting was in Ventura County, where Thomas’ fire broke out in December 2017.

“With a tighter insurance market due to the risk of forest fires, many farmers and winegrowers need more coverage than they can currently get,” Lara told the county rally. Ventura.

John Krist, general manager of the Farm Bureau of Ventura County, said the issue resonated among its members, including those who shared their stories with Lara.

“A lot of producers in Ventura County have had bad experiences with their insurers, especially in the last four years since the Thomas fire: lots of non-renewals, lots of rate increases, reduced coverage for the same. cost, ”Krist said. “The commissioner heard some really genuine stories from people about the losses they suffered, the difficulty they had in negotiating settlements with their insurance companies and then getting canceled and having to scrambling to find cover. He was very sympathetic but had concrete steps to take to improve the situation. “

A first step came from the Legislative Assembly with Senate Bill 11, signed at the end of July. He added farm structures to the list of commercial properties eligible for California FAIR Plan coverage. FAIR, or Fair Access to Insurance Requirements, serves as the insurer of last resort.

The next steps came last week, when Lara called for the FAIR plan’s limits to be raised to account for inflation.

Currently, the FAIR plan’s limit for commercial properties is $ 4.5 million, a cap that has not been raised since at least 1997, according to the Insurance Department. The limit under the FAIR plan’s business owners policy is $ 3.6 million, which has not changed since at least 1994.

Lara’s order will raise the commercial property limit to $ 8.4 million and the business owners policy limit to $ 7.2 million.

California Farm Bureau President Jamie Johansson praised Lara’s actions.

“It’s not just a conversation,” Johansson said. “He is moving forward with conviction to meet the challenges facing agriculture and collaborate on solutions. This action plan stems from his meetings across the state where he heard directly from our members. He clearly sees the issues and is working with the California Farm Bureau to address them. “

Brent Burchett, executive director of the San Luis Obispo County Agricultural Bureau, called the measures “a step in the right direction.”

“Is this going to be enough for everyone? Absolutely not,” said Burchett. “You can be a small or medium-sized cellar and take damage. If you lost everything in a fire, it would exceed that amount. But we are happy that this FAIR plan is at least being reformed to make it a more viable option for all of our members. “

Ryan Klobas, general manager of the Napa County Farm Bureau, welcomed the changes. His county organized the first round table in May, in a cellar damaged by fire in Saint Helena.

“I think Commissioner Lara understands the impact this has had on Napa County and the loss we have suffered from the wildfires,” Klobas said.

Chad Peakes, an insurance agent for Ventura whose company manages Nationwide policies, noted that Nationwide has a “difference in terms” plan for farmers and ranchers seeking coverage.

“It’s basically about writing the farm package policy for them, but removing the fire blanket,” Peakes said. “You get fire coverage by writing the FAIR plan policy. “

Peakes said that when we were looking for coverage for a client, “we hope Nationwide will come back with the difference in terms. Then we go to the FAIR plan and quote the buildings we can cite with them.”

County Farm Bureau officials said more work needed to be done.

“The increased availability of the FAIR plan and increased coverage limits help, but it’s really not where people want to be,” Krist said. “I think what we need is for the private insurance market to do a better job of assessing risk property by property and not just issuing general policy non-renewals for every property that is found. a mile from something that could burn. “

Klobas highlighted the working group that Lara is setting up to address mitigation measures. A virtual workshop will be held at 1 p.m. on November 10.

“This working group is supposed to look at mitigation practices, hardening measures, and it will absolutely urge businesses and residents to use those practices if they are to be factored into the insurance policy that will ultimately be taken out for cover their property. ”Klobas said.

“The fact that vineyards act as a firebreak is starting to be taken seriously now,” Klobas added. “It is important for us to stay involved in these discussions.”

Burchett called the issue “a clear example of where the California Farm Bureau has been a leader,” noting that a similar roundtable was held in Paso Robles in June.

“When we met Ricardo Lara, we had cattle ranchers, we had vegetable growers, we had wineries, other commercial farms,” Burchett said, adding that “this shows why we have a Farm Bureau – those kinds of issues that run through farming. “

(Kevin Hecteman is associate editor of Ag Alert. He can be contacted at [email protected])

The California Farm Bureau Federation works to protect family farms and ranches on behalf of nearly 32,000 members statewide and as part of a nationwide network of more than 5.5 million Farm Bureau members .
Source: Reprinted with permission CFBF

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