California to insurers: How much is fire risk ‘hardening’ commercial coverage market for wineries, vineyards, farms?

After hearing stories about cancellation, nonrenewal or rejection of commercial insurance for wineries, wine grape growers and other agribusinesses in high wildfire risk areas, California Insurance Commissioner Ricardo Lara on Tuesday directed insurers to provide details on what’s going on.

Lara gave carriers operating in the state and those participating in its coverage of last resort, the California FAIR Plan, 60 days to provide the Department of Insurance with detailed information about changes to and effects of commercial policy underwriting since January 2017.

That would include the 2017 North Bay fires, 2018 Mendocino Complex Fire, 2019 Kincade Fire in Sonoma County and last year’s blazes, namely the Glass Fire that burned dozens of wineries.

Insurance brokers for North Bay agribusinesses told the Business Journal recently that the California FAIR Plan has been rejecting coverage for hundreds wineries and vineyards in high-fire-risk areas. That came because California insurance law specifically excludes such “farm risk,” but there’s an effort in the Legislature to change that.

“This ‘hardening’ of the commercial insurance market for our farmers, growers, and vintners, among others, affects local communities’ ability to bounce back from wildfires and demands swift action from policymakers driven by data and science,” Lara wrote a letter to business owners, announcing the effort.

In the past few years, the Department of Insurance has collected detailed information on the tightening market for residential property coverage because of wildfire risk. Now, he said he wants to do this with the commercial market.

Lara has called on insurers and the California FAIR Plan Association, created in the late 1960s by a group of carriers, to provide the following information by June 14:

  • Total premium written by program.
  • New or recently revised wildfire underwriting restrictions.
  • Consideration of wildfire or location in rating and eligibility.
  • Number of new policies written since January 2017.
  • Number of nonrenewals due to wildfire risk.
  • Total claims exposure and policy count.

At the same time, state Senate Bill 11 is garnering wide support from the FAIR plan operators as well as wine and agriculture trade groups. Introduced in December by state Sen. Susan Rubio, D-Baldwin Park, assistant majority whip, SB 11 would change the California Insurance Code to only exclude coverage of crops, clarifying that excluded “farm risk” doesn’t include equipment or permanent structures involved in agricultural production.

The bill was approved 12-0 by the Senate Insurance Committee on Thursday.

The California FAIR Plan association released a statement to the Business Journal that day, noting its support for SB 11:

“It has become increasingly difficult for California farmers living in wildfire areas to purchase insurance covering their farm buildings, so the Farm Bureau has approached the FAIR Plan to see how the two can work together to help farmers insure their buildings. During the course of the discussions, the FAIR Plan learned that certain winery properties are classified as farms.

“Unfortunately, since the FAIR Plan is prohibited by statute from writing farm risks, the FAIR Plan can no longer insure these winery properties until the statute is changed.”

California Insurance Commissioner’s April 13 notice requesting submissions

Jeff Quackenbush covers wine, construction and real estate. Before the Business Journal, he wrote for Bay City News Service in San Francisco. He has a degree from Walla Walla University. Reach him at or 707-521-4256.

Show Comment

Our Network

The Press Democrat
Sonoma Index-Tribune
Petaluma Argus Courier
North Bay Business Journal
Sonoma Magazine
Bite Club Eats
La Prensa Sonoma
Sonoma County Gazette