Environment & Energy
Related: About this forumA New World Of Fire - California Farms And Wineries Facing Quadrupled Insurance Rates, Cancellations
Stu Smith got an email from his insurance company last summer with some bad news: His premium was more than quadrupling. Smith is the co-owner of Smith Madrone, a wine operation in the mountains near Californias Napa Valley, and he had held a wildfire insurance policy with the company for more than 30 years. Now, though, the insurer had decided Smiths property was too risky to keep on its customer rolls at anything close to its longtime price. If Smith wanted to renew his policy, he would have to pay annual premiums of more than $55,000, up from just $12,000 the year before.
The following week, as the LNU Lightning Complex Fire began to spread in the hills east of Napa Valley, Smith scrambled to find a new insurance company. No private insurer seemed willing to issue him a policy, so at the last moment, he resorted to a state-run insurance plan that covered a portion of his property. The price was still orders of magnitude greater than what hed grown used to: He would now have to pay $46,000 for an insurance plan that offered a fraction of the coverage his previous plan did.* After a few weeks, with the LNU fire still burning nearby, Smith gave in and signed up for the state-run plan, but many of his neighbors in Sonoma Valley did not. Hundreds of farm owners in California have found themselves forced to go without insurance coverage this past year, from ranchers along the Central Coast, nut growers outside San Diego, and winery owners like Smith in Sonoma and Napa Valley. Nobody knows for sure how many farm owners have lost coverage, but whats clear is that the trend has sent shock waves through Californias agricultural regions.
EDIT
This insurance dilemma has been simmering for decades. After a rash of wildfires and earthquakes in the 2000s, the largest private insurers became more conservative about writing new policies in fire-prone areas. It wasnt until after the historic fire seasons of 2017 and 2018, though, that regulators began to notice a rise in so-called nonrenewals, wherein a private insurer refuses to renew an existing customers insurance plan. An estimated 400,000 residential customers received nonrenewal notices in 2018 and 2019, with numbers spiking by more than 200 percent in the most vulnerable counties in California. Thousands of commercial businesses and farms have also been dropped.
EDIT
When insurance started dropping customers a few years ago, this gap in the state plan left many farmers with no coverage options for much of their property a potential death sentence for their business. Farms rely on bank loans for the capital they need to expand their operations, but they cant get bank loans without insurance. Many farmers began to worry that banks would soon cut them off. After a lobbying push by the largest trade association of California farmers, the California state legislature passed a bill earlier this month that expanded the FAIR Plan to cover farm structures, and Governor Gavin Newsom signed it a few days later. (The state insurers association also supported the bill.) The new insurance wont be available until the end of the year, though, which means that many farmers will have to go naked, as Smith calls it, through a fire season that experts believe could be one of the worst in history.
EDIT
https://grist.org/agriculture/as-wildfires-worsen-more-california-farms-are-deemed-too-risky-to-insure/
Chainfire
(17,528 posts)They are not going to insure an entity that is bound to fail.