4 Steps for Vineyards & Wineries to Protect Against Wildfire Threats

Five of the six largest wildfires in California history took place in 2020, and 2021 is shaping up to be another record year.1 The disasters will have a particular effect on the state’s wine industry, which had sales of $43.6 billion in 2019.2

When fire damages a vineyard, it can take up to five years for a vine to become fully productive again. More common is smoke and soot from wildfires, which damage grapes and can potentially ruin crops.3

The effects of “smoke taint” can have a severe financial impact on the business. Sonoma County, California wine grape growers expected to lose at least $152 million in 2020 due to smoke-damaged products, leaving an estimated 30% of the 2020 crop unpicked.4

The Federal Crop Insurance Program (FCIP) helps growers subsidize rising premiums; however, vineyards and wineries’ fire insurance applications are being rejected at high rates. For example, in Sonoma County, insurers did not renew 25% of the Farm Bureau’s members, with nearby Napa County wineries facing a similar rejection rate.1

Protecting against financial loss

Wildfires are endemic to the region, and smoke taint threatens vineyards, even when a fire isn’t nearby. And the nature of winemaking makes it nearly impossible for growers to move to less-hazardous territory.

If there is danger to crops that can’t be mitigated, how can vineyard growers shield themselves? Here’s four things to protect against the financial impact of wildfires:

1. Work with a FCIP-licensed agent who specializes in vineyards. In the FCIP, corn, wheat and soybean crops reign supreme — grapes for winemaking can be overlooked. An agent who understands vineyards and the requirements for FCIP coverage and claims is invaluable. A specialist agent will know you need to show minimum amounts of production, third-party records of production, pricing and more to file a claim.
2. Know that not all FCIP carriers are the same. While FCIP cost and coverage are consistent no matter who sells it, a carrier’s worth ultimately comes down to claim adjustment procedures. An experienced agent can guide a vineyard owner through the process of finding the right carrier with a strong loss adjustment team and record.
3. Consider captive crop insurance. A captive provides coverage where federal programs do not. Captive insurance programs aren’t available on the open market but can be added protection alongside FCIP coverage.
4. Use all available resources. In emergencies, take advantage of government-backed disaster relief programs. For example, the Wildfires and Hurricane Indemnity Program (WHIP), available through local farm services agencies, has been amended to include fires. If eligible, WHIP offers two years of FCIP coverage.

As severe weather conditions show no sign of abating, vineyards will remain at risk for burned crops and smoke taint. It’s more important than ever before to tap into the right resources to find the right coverage — unlike other businesses, vineyards can’t pack up and open shop elsewhere.