A Sneak Peek of New Fire Insurance Relief Coming to California Wine Country This Fall
A ‘last-ditch’ option to insure wineries damaged by wildfires, when a battered Napa Valley tourism shakes up the pandemic and recaps a career as mayor known in part for floods, fires and a earthquake highlighted the North Bay Business Journal’s Impact Napa virtual conference on Wednesday.
Insurance: “Prevent a financial catastrophe”
Huge wildfires have been raging in Napa and Sonoma counties for nearly a year, and many local winegrowers and winegrowers have received alarming news that their property insurance is either disappearing or costing much more due the increased risk of such conflagrations.
Fast forward to today, with the 2021 harvest just beginning and the risk of fire increasing, help from Sacramento is underway to ease the situation.
On July 23, Gov. Gavin Newsom signed Senate Bill 11, which unlocks statutory shackles that have prevented the state’s insurer of last resort from drafting fire policies for buildings and infrastructure. cellars and vineyards.
“SB 11, at the heart of it, was aimed at preventing a financial catastrophe that had consequences far beyond Napa County, far beyond California,” said Ryan Klobas, CEO of Napa County Farm Office, during the conference.
The most obvious part of the problem was access to coverage. For example, a member of a local agricultural bureau paid about $ 300,000 per year for forest fire insurance now pays over $ 1 million per year for 15% of coverage, Klobas said, adding that other members had had their coverage removed.
The main problem was that the California FAIR Plan Association, a basic coverage pool, was prohibited by law from underwriting “agricultural risks,” which included not only products that could be covered by crop insurance, but also products that could be covered by crop insurance. agricultural infrastructure. The fix was first introduced on March 1 and made it to the governor’s desk in just 144 days with bipartisan and unopposed support.
FAIR plan administrators have until October 21 to submit the forms and rates for the new coverage to the Department of Insurance. A solution to the global availability of commercial property coverage will have to wait for regulatory action from the department, Klobas said.
The trade group and State Senator Bill Dodd, D-Napa, were the main supporters of the legislative change in SB 11.
Tourism: when do the dollars come back?
The tourism industry in Napa Valley – the county’s second largest employer – is showing signs of recovery, but it is also in the throes of one of the biggest challenges facing the business world.
“In addition to the looming threat of wildfires and its impact, we are faced with the ability to strengthen staff and deliver the levels of service expected from our luxury destination,” said Linsey Gallagher, President and CEO of the management of Visit Napa Valley, noting the situation is not unique to the area. “But for us, that will be what will have the greatest impact on our ability to fully recover and return both income and economic contributions to what they were before the pandemic.”
Gallagher at the conference presented data going back to 2018 – the most recent available – which shows how the Napa Valley tourism industry was performing before the pandemic, the decline during last year’s closings and recovery projections at the future.
Normally, Napa Valley receives 3.85 million visitors annually – 80.8% from inland and 19.2% from around the world. Of those visitors, 64.5% come for the day and 35.5% stay overnight, Gallagher said, citing data from Destination Analysts, a San Francisco-based market research firm. But overnight visitors spend the most, with nearly 70% contributing to Napa’s economy, she noted.
Last year, the volume of visitors to the northern California wine region, which includes Sonoma County, declined 44%, with a recovery expected to take between two and three years before returning to 2019 levels. said Gallagher, referring to data from the San Francisco Travel Association and Tourism Economics, a Wayne, Pa., company that tracks travel trends around the world.
Spending by visitors to the region fell 62% last year, largely due to the loss of international travelers, Gallagher said, adding that it would take between four and five years to return to income levels of 2019.