Thomas Fire: Insurance woes linger for agricultural industry

Catherine Keeling, owner of a Santa Paula avocado and lemon operation, had her insurance canceled, or not renewed, after the 2017 Thomas Fire.

"We all scrambled around to figure out what to do," said Keeling, owner of Strata Holdings LP.

She is like many other agricultural business owners across the state faced with problems getting adequate fire insurance coverage as wildfires have intensified in recent years. Keeling was able to find another option through a state insurance pool but it does not cover all of her property.

On Tuesday, California Insurance Commissioner Ricardo Lara came to Santa Paula to listen to Keeling and other Ventura County agricultural business owners about their dilemma. Lara said he partnered with the California Farm Bureau to have "intimate dialogues" across the state.

"As the fires continue to decimate our state, it really brings different challenges. And one of the things that I did when I first got elected was really to get the department out of LA and out of Sacramento and actually going into the communities that were affected by these fires, " Lara said.

Lara announced he would order the California FAIR plan to increase its coverage limits to keep up with inflation. The FAIR plan, according to its website, was created in the late 1960s to provide basic fire insurance for those who couldn't obtain it in the traditional marketplace.

Lara wants to double the Fair Access to Insurance Requirements or FAIR policy for business owners from $3.6 million to $7.2 million and the commercial policy from $4.5 million to $8.4 million. Since 1997, according to officials, the Consumer Price Index has shown costs have nearly doubled during that time in California.

"This is kind of the first step," Lara said. "This is where we feel we can best defend this if and when the FAIR plan sues us ... We want to make sure we're in the best footing to be able to defend why we're asking for these coverage limits."

Lara said his announcement builds on Senate Bill 11, which Gov. Gavin Newsom signed into law this month, allowing the FAIR plan to insure farm structures.

Keeling said she was excited to see if Lara's plans come to fruition.

"This feels like we're moving toward a safer position for everybody in a time of incredible uncertainty for us especially as we're going into ... fire season," Keeling said

Recent data collected from insurers for the first-time showed how wildfire losses, including those from the 2017 Thomas Fire, affected the commercial insurance market, Lara said.

Lara said in 2020 insurance companies issued 5,774 cancellations of coverage and wrote 6,021 new policies. He wants to find out more about changes in coverage and if the policies are more expensive.

"We know that you may get canceled," Lara said. "Your farm might find insurance but it will be tighter in coverage and likely more expensive and we need to access how much more people are paying so then we start figuring out some solutions around the area."

Lisa Tate Soury, a farm manager for Rancho Filoso in Santa Paula who was also impacted by the Thomas Fire, said her insurance coverage was dropped but she was able to get a renewal with $3 million less in coverage at the same price. Tate said she placed the uninsured property on the FAIR plan but the coverage does not cover farm structures.

"I liked what he had to say," she said about Lara's efforts. "It sounds like he's aware of the issues and we're hopeful he can have an impact."

Luis Calderon, who works for Reiter Affiliated Companies based in Oxnard, said extreme weather and insurance issues have made it difficult for farmers. Reiter Affiliated Companies describes itself as the "largest fresh multi-berry producer in the world" on its website.

"It becomes a very diminishing thing people want to do because it's so expensive," Calderon said. "But you need farmers ... you need to eat."

Lara said he learned about how fires were devastating agricultural lands and he reached out to California Farm Bureau President Jamie Johansson to figure out how to better protect farmers.

"California is still ag country and it's very near and dear to my heart," Lara said. "My dad was a farmworker when he came ... as a bracero in the '60s and worked up and down the Central Valley and still have family there."

Lara said his goal is to have as many private insurers as possible writing policies to decrease prices through competition.

On Nov. 10, Lara is hosting a virtual workshop about new rules to require insurance companies to incorporate community and business fire-prevention actions when rating their risk.

For more information, head to insurance.ca.gov or 800-927-4357.

Wes Woods II covers West County for the Ventura County Star. Reach him at [email protected], 805-437- 0262 or https://twitter.com/JournoWes