Insurance Crisis Deepens in California as Ag Industry Faces Rising Costs and Limited Coverage

The AgNet News Hour tackled one of the most pressing issues impacting agriculture and rural businesses, California’s worsening insurance crisis, and what it means for farmers already navigating high costs and regulatory pressure. The episode featured an in-depth interview with insurance commissioner candidate Stacey Korsgaden, who outlined major concerns with the current system and how it is affecting industries across the state, including agriculture, trucking, and small business operations. “Insurance has gone up… or you can’t even get a policy,” Korsgaden said, describing what she is hearing from Californians across multiple sectors. For agriculture, the impact is significant. Farmers are dealing with rising premiums for everything from crop insurance to equipment, vehicles, and workers’ compensation. In some cases, coverage is either unaffordable or unavailable altogether—adding another layer of financial pressure on top of already high input costs. Industry leaders say the issue is not isolated to one region or commodity. From the Central Valley to coastal production areas, the challenges remain consistent: higher prices, reduced options, and declining service levels. According to Korsgaden, many of these issues stem from long-term policy decisions that have created a difficult environment for insurance companies to operate in California. As regulations have increased, she said, many insurers have either scaled back their presence or left the state entirely. “Insurance companies are looking at the restrictions… and they’re pulling back,” she said. That trend has led to a heavier reliance on the state’s FAIR Plan, originally designed as a last-resort option. Today, however, more homeowners and businesses are being forced into the system due to lack of alternatives. The conversation also highlighted how broader issues, such as wildfire risk, forest management, and crime, are influencing insurance availability. Companies use risk-based models, and when conditions become too unpredictable or costly, they simply stop writing policies. “California is not insurable right now,” Korsgaden said. For agriculture, that reality presents serious concerns. Without reliable and affordable insurance, farmers face increased financial risk, making it more difficult to invest, expand, or even maintain operations. The discussion also touched on the need for leadership with industry experience. Korsgaden noted that California has not had an insurance commissioner with a background in the field for decades, a gap she believes has contributed to the current situation. “I understand insurance… and I know how to fix it,” she said. Proposed solutions include attracting new insurance companies back into California, streamlining regulatory processes, and improving communication between the state and private insurers to restore competition in the marketplace. As California agriculture continues to face challenges from water, labor, and regulatory pressures, the insurance crisis is quickly becoming another major factor shaping the future of farming in the state. Listen to the full interview below or on your favorite podcast app.