Insurance companies are raising fire insurance costs exponentially amidst the recent severe wildfire seasons, and some farmers are opting out of plans altogether.
When the recent wildfires swept across California, many farmers came knocking at insurers’ doors to collect money for damaged land. As a result, the insurance industry’s losses in 2017 and 2018 exceeded profits from the last 25 years as wildfires were especially severe during those that season, according to Grist.
Insurance companies are not only quadrupling premiums, but they’re also not renewing insurance plans. These insurance changes may force farmers to leave the business, which would impact wine and fruit production as well as jobs for migrant workers.
In the wake of these changes, farmers are using the California Fair Access to Insurance Requirements plan (FAIR) – a state insurance plan. Because FAIR only provides minimum coverage, a group lobbied for the plan to protect more equipment on the farm. California governor Gavin Newsom approved of the expanded coverage, but the changes won’t go into effect until the end of 2021, thereby, leaving farms without insurance for months.
As wildfires continue to scorch the northwest US, it’s possible that many farmers’ land will be ravaged and unable to make produce goods to sell. The FAIR plan is also a temporary solution, and private insurances may have to step in to insure farms.
But some farmers worry that even if private insurance was available, smaller farms would not able able to afford coverage.
Whether it’s private or state insurance, the extended wildfire season may make insuring farms unviable if no one can afford premiums.