Actions aim to expand farmers’ insurance options
By Dave Kranz
As farmers and ranchers in fire-prone areas across the state struggle to find insurance for their businesses and properties, the California Farm Bureau has taken a two-pronged approach to providing new coverage options.
“Farmers and ranchers across the state have told us they haven’t been able to renew the insurance and they haven’t been able to find replacement coverage,” said California Farm Bureau President Jamie Johansson. “This has been a top priority for Farm Bureau this year and we have addressed it in a number of ways, including sponsoring legislation and working with our insurance partners at Nationwide.”
The legislation, Senate Bill 11 by Senator Susan Rubio, D-Baldwin Park, would specifically allow the state’s insurer of last resort, the California FAIR Plan, to purchase insurance coverage for commercial farms and ranches.
The FAIR plan – FAIR is the acronym for Fair Access to Insurance Requirements – provides basic home insurance to customers who have found themselves unable to acquire coverage in the open insurance market.
Robert Spiegel, a California Farm Bureau policy advocate, said unlike homeowners and other commercial property owners, farms and ranchers do not have access to basic home insurance provided by the FAIR plan. .
“If a farmer is unable to find insurance in the private market and lives on the farm, the FAIR plan is only allowed to purchase coverage on the house,” Spiegel said. “It’s a big problem, and that’s what we’re trying to solve.”
Under the current circumstances, farmers and ranchers unable to purchase coverage on the open market – and not eligible for the FAIR plan – could be left without coverage for barns, other outbuildings, equipment and other goods necessary for agricultural production. In turn, Spiegel said, this could prevent them from qualifying for the credit needed to operate the farm or ranch.
SB 11 would correct the exclusion by providing FAIR plan insurance for agricultural goods used in the production of an agricultural product. The bill received unanimous support from the Senate Insurance Committee earlier this month, and further progress in the Senate as a whole.
“The FAIR plan is not the long-term solution or a substitute for farmers’ insurance problems, but addresses the most pressing needs,” Johansson said.
Because the FAIR plan only provides the most basic coverage, he said, farmers and ranchers would still need additional coverage once they qualify for FAIR plan policies.
“Through the Farm Bureau’s partnership with Nationwide,” said Johansson, “we were able to work with Nationwide to determine how to fill in the gaps in what a FAIR Plan policy would offer.”
Following approval from the California Department of Insurance, Nationwide began offering what is known as a “difference in terms” or DIC policy to farmers and ranchers eligible for FAIR plan coverage.
Emily Berrier, Associate Vice President of Farm Underwriting for Nationwide Agribusiness, said Nationwide is the first farm and ranch carrier to offer DIC coverage in California.
“When a farmer or rancher obtains coverage with the California FAIR Plan, they can then work with an insurance agent appointed across the country to submit a request for a difference in terms policy,” Berrier said. “The FAIR plan and the difference in conditions policies then work together to provide coverages typically offered under a farmer’s policy.”
She said Nationwide “worked hand in hand” with Farm Bureau to design the cover and get state approval.
“This was a joint effort to ensure that the needs of farmers were met,” Berrier said.
Similarly, the Farm Bureau welcomed an opinion from State Insurance Commissioner Ricardo Lara, directing insurance companies to provide data on the availability of commercial coverage for farms, ranches and various agricultural enterprises.
Given the number of farmers and ranchers who have reported difficulty getting forest fire insurance, Johansson said, the commissioner’s action “should help us determine the scale and depth of the problem” .
Lara asked insurance companies to provide data on the availability of commercial insurance for businesses, including farms, ranches, timber harvesting operations, wineries, cotton gins and other agricultural enterprises. He gave companies until June 14 to submit the information.
In an open letter to business owners, Lara said the requested data would include “the number of commercial policies written and not renewed since January 1, 2017, to measure the impact of four successive fire seasons on coverage. commercial insurance in our state. “
He said he had also ordered insurance companies to provide “any new or recently revised wildfire underwriting restrictions that they intend to implement that would affect this critical sector of the world. ‘Californian economy’.
Johansson said Farm Bureau was working with Lara and the insurance companies to “stabilize the insurance market” for California farms and ranches.
“We believe that the commissioner’s action will help us move forward towards a long-term solution,” he said.
(Dave Kranz is editor-in-chief of Ag Alert. He can be contacted at [email protected])
Permission for use is granted, however, credit should be given to the California Farm Bureau Federation when reprinting this article.