New Ag Insurance Coverage Options Approved

California Insurance Commissioner Ricardo Lara with the Napa County Farm Bureau during an insurance roundtable discussion with Farm Bureau members

Following Farm Bureau's successful legislative victory with Farm Bureau sponsored Senate Bill 11 to address wildfire insurance coverage for our ag businesses, California Insurance Commissioner Ricardo Lara has announced he is building on that success by approving more coverage options for our vineyards, wineries and other ag businesses.

Acting to address the growing needs for a competitive insurance market for farm owners, wineries, ranchers, and other outdoor agricultural businesses, Insurance Commissioner Ricardo Lara has approved the FAIR Plan to offer new commercial coverage for farm structure risks starting February 1, 2022. The FAIR Plan is an association made up of all admitted insurance companies to be the state’s property “insurer of last resort.”

Following Governor Gavin Newsom’s signing of Senate Bill 11, sponsored by the Farm Bureau, authored by Senator Susan Rubio, the State Legislature and the California Department of Insurance have urged the FAIR Plan to act as promptly as possible. Not wanting to add to the FAIR Plan’s delays, the Department, in its approval letter, noted some additional commercial coverage issues overall that the FAIR Plan must resolve at a later date as the Department reviews the FAIR Plan’s entire commercial property insurance program in the months ahead to ensure it truly “takes all comers.”

"This is welcome news and builds on the success the Farm Bureau has had in securing insurance coverage for our ag businesses through the FAIR Plan", said Johnnie White, President of the Napa County Farm Bureau.

"Having worked closely with Commissioner Lara and Senator Bill Dodd on this issue for the last year to obtain insurance coverage for our agricultural community, this coverage increase is testament to the hard work that has been undertaken on this issue given these coverage limits have not been raised since 1994", said Ryan Klobas, Chief Executive Officer of the Napa County Farm Bureau.

California’s farmers, ranchers, and vintners, among other agricultural businesses, live and work in more rural, outlying areas that may be especially vulnerable to wildfires. This makes having more and better options for insurance coverage critical to these businesses’ ability to operate and thrive in their communities. Department of Insurance data shows that some agricultural businesses have been left without coverage by insurance companies.

“This approval means California’s FAIR Plan can do its job and add much-needed protection for those farmers and ranchers that have found their insurance policies canceled or non-renewed. Given the current wildfire challenges facing California, our agricultural community is fearful of what may happen this year without this additional coverage,” said Jamie Johansson, President of the California Farm Bureau Federation. “We thank Commissioner Lara for supporting and expediting this new coverage and Senator Rubio for championing this legislation to protect California’s farmers and ranchers. We know that we have a leader in Commissioner Lara to get things done and look forward to continuing to partner with him on long-term coverage solutions for California’s agricultural community.”

On November 19, 2021, Commissioner Lara amended the Plan of Operations for the FAIR Plan to increase its combined coverage limits, under its Division I Commercial Property Program, from $4.5 million to $8.4 million and, under its Division II Businessowners Program, from $3.6 million to $7.2 million.

To read the amended Plan of Operations for the FAIR plan, please click below.
FAIR Plan Amended Plan of Operations