California wineries, farms to get access to last-resort fire insurance as Gov. Newsom signs SB 11

With wildfire losses in the state soaring, and insurance company rates following suit, a governor’s signature on a bill is leaving some winery owners eyeing a bit of relief.

The Napa County Farm Bureau, one of the supporters of the legislation, reports that Gov. Gavin Newsom on Monday signed Senate Bill 11, giving owners of wine and other agricultural properties a way to gain coverage through the state’s high risk insurance plan called the California FAIR plan, the state’s insurer of last resort.

As the plan is set up now in law, it does not cover agricultural property. SB 11 throws out the exemptions, at least on buildings and inventory or stock. The bill is authored by Sen. Susan Rubio, D-Baldwin Park.

“This legislative victory is the culmination of months of hard work led by the Farm Bureau,” said Ryan Klobas, CEO of the Napa County Farm Bureau. “This is a first step that will now allow agricultural properties in Napa Valley and throughout California to access basic property insurance for wildfire coverage. ”

Earlier this month, winery owners told the Journal that following years of wildfires racking up millions of dollars in loses, insurance rates have jumped dramatically, or coverage is nearly impossible to find..

Two years after the Kincade Fire of 2019, took our several non essential buildings on his Chalk Hill Ranch, insurance coverage hard to find for the Healdsburg area property.

He told the Journal he had seen three policies whittle down to one that only provides $400,000 in coverage to the ranch manager’s house. Anything beyond that, including his wine and horse boarding operations valued at $3 million, was denied coverage because of the fire risk given his location.

“I’m holding my breath,” Martin said. “And I’ve been 45 years with the same insurance company. I’ve canvassed every insurance company I could think of.”

According to PropertyCasualty360.com, an insurance data research firm for brokers, the upward slant of the escalating costs of claims looks like a cliff.

Between 1960 and 1980, the aggregated average of California’s fire insurance claims cost $100 million per year. In the decade starting in 2000, the claims climbed by six times that number. In 2019, that figure rose to more than $4 billion, while last year the industry reported these claims as topping $9 billion.

While SB 11 is an urgency measure, how soon it can deliver relief is in question. Fires already burn throughout the state, and fall weather patterns bring escalating risk.

Klobas told the Journal on Monday that the organization has been working for several months with legislators and the office of the state insurance commissioner to expedite the implementation of SB 11. Now that it’s signed, the FAIR Plan has 90 days to submit forms, guidelines and rates to the Department of Insurance.

“The FAIR Plan and the department have been developing a farm policy framework and we believe coverage may be available by the end of the year,” Klobas said.

V Sattui Winery General Manager Tom Davis said fixes to commercial insurance in wildfire risk areas need to go further.

“The bill doesn’t help this year, and it doesn’t go far enough,” he said of the family’s St. Helena winery Castello di Amorosa, part of which had significant damage from the 2020 Glass Fire. “It maxes out at $3 million. For the agriculture industry that has had insurance canceled, that’s just a fraction.”