California to test crop insurance with ‘smoke taint’ coverage for wine grapes!

Hello friends, I hope you are feeling energetic. According to sources at Live Insurance Info, to grow the US wine industry, the US Department of Agriculture Risk Management Agency plans to implement a new crop insurance coverage in California this summer. All this is to protect wine grape producers from losses caused by forest fires and exposure to its smoke.

The Fire Insurance Protection Smoke Index will be available to wine grape growers as an optional add-on to individual grape crop insurance policies starting with the 2025 crop year. Agency officials said at the West Coast Smoke Damage Task Force Summit earlier this month.

New Insurance Plan Targets Smoke Risks for California Crops

Where crop insurance is available, and there is a potential risk of smoke damage in the future, there are plans to extend the crop insurance period, and the pilot program will launch in 32 counties across the Golden State. “We and our whole team wanted to develop something simple, something that would work effectively by providing an immediate solution to smoke events or smoke damage at the end of the insurance period and also provide immediate compensation for fire and smoke,” said Jeff Yasui, the agency’s regional director.

How Wildfire Smoke Affects Wine Quality and Sales

For your information, let us tell you that when there is a forest fire, the smoke compounds are more likely to be absorbed into the wine grapes, and when the wine is made, the grapes are affected, leaving a smoky, ashy, or bland taste. It leads to a decrease in wine sales. In 2020, approximately 165,000 to 325,000 tons of California wine grapes were destroyed. Due to actual or stray smoke damage, and this caused the wine industry to suffer financial losses of more than $600 million.

Simplified Coverage: The Smoke-Tint Add-On for Wine Growers

We designed the smoke-tint add-on or endorsement as an area-based plan, meaning payments will only be triggered if the insured county has the required number of eligible smoke days during the crop coverage period, rather than requiring individual wine grape growers to document their losses, Jeff Yasui said at the task force online summit.

Also Read: Will high-risk areas of California get insurance coverage?