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California Governor Signs Bill Expanding FAIR Plan to Farmers

The bill removes the existing statutory exclusion for “farm risks,” narrowing the exclusion to “commercial agricultural commodities or livestock, or equipment used to cultivate or transport agricultural commodities or livestock.”
  • Timothy Darragh
  • October 2021
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California Gov. Gavin Newsom has signed legislation expanding the state's FAIR Plan to include farm buildings and related agricultural structures, bringing coverage to farmers, including the state's famed vintners, who were losing coverage as insurers pull back from areas plagued by wildfires.

Newsom signed S.B. 11, which the property/casualty industry fought earlier in the legislative session, without a statement.

Related: Update: Court Rules California Regulator Can Order FAIR Plan to Offer Comprehensive Homeowners Plans

The bill removes the existing statutory exclusion for “farm risks,” narrowing the exclusion to “commercial agricultural commodities or livestock, or equipment used to cultivate or transport agricultural commodities or livestock,” according to a statement from the office of Insurance Commissioner Ricardo Lara.

The clarification means that farmers, ranchers and vintners will be able to purchase basic property insurance from the FAIR Plan, including coverage for family homes, animal barns, feed barns and equipment and crop storage sheds, among other such structures, it said.

FAIR Plan President Anneliese Jivan signaled her support in June when the bill passed a state legislative committee.

“As the frequency and intensity of wildfires in California increase, the FAIR Plan remains committed to working with our policymakers to address these important issues that affect many Californians,” she said in a statement. “S.B. 11 will offer much-needed peace of mind for our farmers.”

Lara's office said the changes are necessary to fulfill a core purpose underlying the original establishment of the FAIR Plan in 1968—to ensure the availability of basic property insurance in the state to all Californians.

Related: Dixie Wildfire in California Burns 954 Structures So Far, Threatens 16,000 More

The American Property Casualty Insurance Association and the Personal Insurance Federation of California earlier said they preferred establishing an Insurance Market Action Plan that would allow for an expedited process to provide coverage in areas more likely to burn.

They said the plan would offer consumers choices and a better deal than the limited and expensive coverage provided through the FAIR Plan. With increasing reports of commercial insurance nonrenewals of farms, wineries and other agricultural businesses, Lara in April directed commercial insurers to report data on nonrenewals and underwriting restrictions focused on the agriculture, farming and outdoor industry, his office said. The department said the results, which were scheduled to be announced in late summer, will highlight major commercial insurance availability issues affecting agribusiness across the state. They also will provide Lara and lawmakers with the facts needed to confront pending insurance availability challenges, it said.


Timothy Darragh is an associate editor. He can be reached at timothy.darragh@ambest.com.


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