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Farmers tell Lara about inability to buy fire insurance

Issue Date: June 2, 2021
By Kevin Hecteman
Winery owner Dario Sattui, right, explains his insurance situation to California Farm Bureau President Jamie Johansson, third from left, and state Insurance Commissioner Ricardo Lara.
Photo/Kevin Hecteman

Dario Sattui knows all too well what wildfires can do—not only to his business, but to his ability to obtain insurance afterward.

The Glass Fire struck Sattui's Calistoga winery, Castello di Amorosa, in September 2020 and hollowed out a warehouse next to the main winery, built in the manner of a medieval Tuscan castle.

"The fire burned the whole building," he said. "It burned about 110,000 bottles of wine, many of them older vintages—our most expensive wine," as well as offices and a wine laboratory, along with wine in open-top fermentation tanks.

"Because of smoke taint, we basically didn't pick any of our 2020 reds," Sattui said, noting that all this came on top of the COVID-19 pandemic that forced him to close the winery—the source of nearly all of his sales—for months.

Now, with the 2021 fire season looming, Sattui has another problem.

"We can't get insurance," he said. "We're uninsurable."

Johnnie White, a vineyard manager and president of the Napa County Farm Bureau, phrased the problem in stark terms.

"We've had major fires in this county in June," White said. "We're in fire season, and our industry's uninsured."

Sattui's warehouse—which now has no roof—hosted a roundtable discussion, the first event in a "listening tour" by state Insurance Commissioner Ricardo Lara, organized by the California Farm Bureau and county Farm Bureaus. The event brought together people from Napa and Sonoma counties whose insurance carriers have declined to renew their policies and who cannot find comprehensive coverage elsewhere.

"It was great that they came," Sattui said. "They heard from a lot of us about that we can't get insurance, or if we can, they'll only partially insure, and premiums are anywhere from 50% higher to four times as high."

Lara described the event as the beginning of "a statewide tour with the Farm Bureau, talking to our farmers, our farm owners, about the reality that they're living in, which is they're also having a hard time finding affordable insurance"—which, he added, could "put in peril the future of ag in California."

"This is the first step of helping me understand the uniqueness of all the different intricacies that come into play—finding insurance, having to go outside of the market to find insurance, and just overall frustrations of what people are feeling," Lara said. "This is important as we go back to look at what are the solutions that we're going to be working on."

California Farm Bureau President Jamie Johansson said plans for the listening tour started "when we saw a lot of farms not able to get wildfire insurance through the private market turn to the FAIR plan, which is supposed to be the insurance policy of last resort."

FAIR, or Fair Access to Insurance Requirements, carries a major downside: As presently constituted, the program can't be used to insure farm structures or equipment—only the residence; crops themselves come under crop insurance.

"What we discovered was that the way the rules were written for the FAIR plan back in the 1960s, farms—agriculture buildings—don't qualify," Johansson said.

The full scope of the problem is as yet unknown; there's no clear number of how many California farms and ranches have lost insurance coverage due to wildfire risk. That prompted the California Department of Insurance to issue a call for data, said Robert Spiegel, a Farm Bureau policy advocate who works on wildfire issues.

"If the private insurance market leaves a community due to wildfire risk, farmers and ranchers have zero options in California," Spiegel said.

A bill in the Legislature seeks to remedy the situation. Senate Bill 11 by Sen. Susan Rubio, D-Baldwin Park, would modify California FAIR Plan Association guidelines to cover a farm's permanent structures or equipment, other than a private garage, used mainly for production of commercial agricultural commodities or livestock. The bill passed the Senate unanimously and awaits action in the Assembly Insurance Committee.

"In the meantime, we have worked with the insurance commissioner's office and our partners at Nationwide to get a gap-funding policy available," Johansson said, which would cover "other insurance vital to the farm, such as liability insurance, so that we can continue to stay in business in California."

David Capponi, a St. Helena-based insurance agent whose employer sells Nationwide policies, said the Nationwide policy provides a "farm wrap" around the FAIR plan.

"Picking up those coverages that they lose by going to the California FAIR plan, Nationwide is able to bring those coverages back for our farms in this area and the rest of California as well," Capponi said.

Nationwide, in partnership with Farm Bureau and with the approval of the state Department of Insurance, now offers a "difference in conditions" policy for farmers and ranchers who qualify for FAIR coverage. The two policies together are intended to provide coverage similar to a Nationwide Farmowners policy.

As officials work to untangle problems with insurance coverage, White said he'd "really like to see some kind of a tax credit for mitigation, to really incentivize more people."

Bodega Bay rancher Che Casul said he's trying to do his part: The seventh-generation rancher runs a fire-fuel mitigation group that teaches at-risk youth how to carry out the work, then pays them to do it.

"If you have grazers going into a forest land or a graze land, or you have a vineyard or an orchard, you are by definition creating those breaks that make our community safer," he said. "It's so important to keep those lands and keep our ag families here, because without them, we're going to be a lot more at risk."

Johansson said additional Farm Bureau member roundtables with Commissioner Lara are being planned in the San Joaquin and Sacramento valleys and in Southern California.

(Kevin Hecteman is an assistant editor of Ag Alert. He can be contacted at

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.

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