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Agricultural Buildings Now Included In FAIR Plan
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California Insurance Commissioner Ricardo Lara on July 26 released the following statement after Governor Gavin Newsom signed Senate Bill 11, authored by Senator Susan Rubio, which will expand the California FAIR Plan to include farm buildings and other necessary agricultural structures.

“I thank Governor Newsom for acting quickly to protect our farmers, growers, and vintners who are facing tremendous hardships because insurance companies are deciding to non-renew them or refusing to write them commercial insurance,” said Commissioner Lara. “My Department staff will do our part to implement Senate Bill 11, helping to close the commercial insurance coverage gaps that are leaving many of our agribusinesses exposed to major losses. I applaud Senator Rubio for her leadership in authoring this important bill and the California Farm Bureau Federation for sponsoring this important measure to provide needed support to this vital sector of our state’s economy.”

SB 11 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.” This clarification means that farmers, ranchers, and vintners will be able to purchase necessary basic property insurance from the FAIR Plan, including for the family home, the barns for the farm animals, the feed barn, the buildings that hold the farm equipment, and the crop storage units, among other such structures. These changes are necessary to fulfill one of the core purposes underlying the original establishment of the California FAIR Plan in 1968 — to ensure the availability of basic property insurance in the state to all Californians.

With increasing reports of commercial insurance non-renewals of farms, wineries, and other agricultural businesses, Commissioner Lara in April directed commercial insurance companies to report data on non-renewals and underwriting restrictions focused on the agriculture, farming, and outdoor industry — the first time such a commercial data call has been done in the history of the Department of Insurance. The results, available later this summer, will highlight major commercial insurance availability issues affecting agribusiness across the state and provide the Insurance Commissioner and policymakers with the concrete information needed to confront pending insurance availability challenges being faced by commercial businesses.

The Governor’s signature of SB 11 builds on Commissioner Lara’s efforts to give Californians more insurance coverage, particularly in high wildfire risk areas of the state. In 2019, Commissioner Lara ordered the FAIR Plan to begin offering more comprehensive coverage to homeowners including an expansion of coverage for liability, theft, contents, and other parts of a traditional homeowner’s policy. Earlier this month, a judge upheld the Commissioner’s authority to order the FAIR Plan to offer this new expansion of coverage, thus giving more than 100,000 Californians who currently rely on the FAIR Plan to protect their homes a comprehensive option beyond the bare-bones residential coverage that the FAIR Plan offers today.