The Legislature and the Newsom administration have taken several actions to prevent more farms from losing insurance due to wildfire risks. Wineries, for example, can now get coverage from the state’s insurer of last resort, known as the FAIR Plan.
But Peter Nissen, president of the Napa County Farm Bureau, said many businesses are having to “self-insure” for property that falls outside of the plan. During a recent Senate Insurance Committee hearing, Nissen described the challenges.
The plan’s cap is $8.4 million for all personal and commercial property, forcing farmers to take out up to four different coverage policies for one parcel. Small farmers often go without insurance when they cannot meet certain coverage requirements. Large operations, meanwhile, are investing hundreds of thousands of dollars in installing water pumps, overhead sprinklers and backup generators and clearing trees. One hillside community has even established its own fire brigade.
“Many farmers are carrying significant risk in order to simply farm,” said Nissen. “And those risks will certainly discourage new capital investments in the future.”
During the hearing, FAIR Plan President Victoria Roach also expressed grave concerns over a bill that would force the plan to cover cannabis farms. Roach said that would exacerbate the problems for the cannabis businesses that cannot find coverage and lead to higher premiums for other plan holders.
“Nobody wants to reinsure those risks in the state of California, particularly in wildfire areas,” explained Roach.
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