Wineries damaged by wildfires tearing through Northern California are starting insurance claims, and at least some of the smaller vintners are likely to find limits in their policies mean payouts fall short of rebuilding costs.
Gaps in coverage and a spike in rebuilding costs, typical after disaster, may come as a shock to many small wineries, favorites of Napa and Sonoma county tourists, said Tom Pagano, who heads the vineyard insurance practice for insurance broker Aon Plc.
“The easy part of insurance is buildings burning down,” Pagano said, describing the complicated claims process. Crops are covered, but not vines, and policies often impose quirky limits, such as when grapes spoil due to electrical failures instead of fires. The blazes came as harvest was ending and production was underway at many wineries.
Even with best insurance protection, vines themselves can take years to grow and mature.
Insured losses from the California wildfires will total billions of dollars for vintners, home owners and other entities, said Pagano.
Catastrophe risk modeler RMS calculates the region sustained $3 billion to $6 billion of insured and economic losses as of Oct. 12. The figures do not include automobile or crop losses, and RMS wrote in a blog post that long-term business interruption to the wine industry “could result in a higher total loss.”
The fires north of San Francisco Bay have destroyed at least a dozen wineries among more than 5,000 structures, as well as killing more than 40.
About thirty wineries in the Napa Valley Vintners trade group reported “some degree of damage” including to wine-making facilities, vineyards and tasting rooms, said Patsy McGaughy, a spokeswoman for the group, which has surveyed half of its 550 members. About a half dozen wineries reported significant losses and are part of an industry that contributes $57.6 billion to the state’s annual economy, according to industry figures.
Vineyards, which mainly occupy the valley floor, appear to have been largely unscathed, as the fires in Napa County burned mainly in the hillsides, McGaughy said.
Smaller wineries, especially, are likely to find “the limitations that were not expected” in their policies said Robert Gall, managing director for the National Property Claims Practice of insurancebroker Marsh, a subsidiary of Marsh & McLennan Companies Inc.
Paradise Ridge Winery in Santa Rosa is one of the better prepared, and is moving fast. It has hired a forensic expert to assess damages and a builder in order to stay ahead of the demand for construction services.
“It’s a maze of information and things to keep track of,” said Sonia Byck-Barwick, who runs the winery with her brother, Rene.
The winery has already started the insurance claims process with a specialty lines unit of Allianz, which covers its buildings and property, and Lloyd’s of London, which covers wines in production and storage, she added.
Fire destroyed its winemaking facility, tasting room, event center and 7,500 cases of wine. The winery is still shipping wine, thanks to 10,000 cases it stored elsewhere. About 12 weddings, scheduled on the property during the coming weeks, have been canceled, Byck-Barwick said.
“Luckily we have great insurance which covers everything,” Byck-Barwick said. “Some things might be a little low, but I feel very confident that we’ll be able to rebuild,” Byck-Barwick said.
Other U.S. winery insurers include the Travelers Companies Inc and Chubb Ltd.
Smaller wineries may lack resources or expertise to negotiate additional coverage for issues such as spoilage caused by utility failures, which is typically subject to far lower limits than other parts of a policy, Aon’s Pagano said.
For example, a clause for the coverage may be limited to $100,000 and hidden deep in a policy that otherwise covers up to $2.6 million in damages.
Wineries that try to cut corners by underinsuring must also often pay co-insurance, a type of penalty that is equivalent to a percentage of the underinsured amount, based on factors such as coverage the business should have had, and deducted from the final payout.
“It’s going to be a big issue,” Pagano said.
==============
As fires continue to burn throughout much of Northern California, reports are surfacing more regularly about the fates of wineries throughout Napa, Sonoma and Mendocino counties. Here is what we know so far about those damaged or destroyed (and we are including only those for which we have confirmation from the wineries themselves or our reporters on the ground):
Napa
Darioush Winery, 4240 Silverado Trail, Napa: The winery reported landscape and vineyard damage, but the winery building itself is still standing. Proprietor Darioush Khaeledi built one of the largest family owned grocery businesses in Southern California before founding the winery in 1997. Often referred to as the “Persian palace,” the grand winery was inspired by the wine culture in the Shiraz region of Iran. Darioush wines, which include shiraz (also known as syrah) and red wine blends have gained critical acclaim since the first release.Hagafen Cellars, 4160 Silverado Trail, Napa: The winery building and tasting room survived the fire, but the crush pad partially burned, some agricultural equipment was destroyed, a guest house and chicken house were lost and about an acre of vineyards burned. “We have been humbled by nature once again but we remain resilient, adaptive, creative and happy to be alive,” the winery wrote on its website. Hagafen was Napa Valley’s first kosher winery, opened in 1979, and is located between Napa’s famed Stag’s Leap and Oak Knoll wine districts.
Helena View Johnston Vineyards, 3500 CA-128, Calistoga: According to the owner’s brother, this organic winery burned to the ground early Monday morning and “all is lost.” Charles Johnston began growing cabernet sauvignon and cabernet franc grapes organically on his Calistoga ranch 26 years ago. He is known for his Napa Valley red blends.
Jarivs Estate: The Napa winery from the Atlas Peak district sustained significant damage. Several structures, including the estate’s historic barn, known as Jarvis’ “pilot winery,” were destroyed, according to brand manager Elizabeth Rhoda. The winery is safe, however, thanks to being housed in a 45,000 square foot cave dug into the Vaca Mountains.
Mayacamas Vineyards, 1155 Lokoya Road, Napa: The winery atop Mount Veeder survived the fire, but a private tasting and events building known as “the residence” was destroyed. Mayacamas is one of Napa Valley’s historic wineries, established in 1889 on Mt. Veeder. The winery was built then with stones from the estate vineyards. That building, as well as other property buildings, were restored in 2013. Mayacamas is known for chardonnay and cabernet sauvignon.
Paras Vineyard, 2340 Mt. Veeder Road, Napa: The winery is believed to have had severe damage after an Agence France-Press photo showed the main building on the family farm engulfed in flames and fire burning in the vineyard.
Patland Estate Vineyards, Soda Canyon Road, Napa: A view from Soda Canyon Road shows extensive damage to the estate and vineyards.
Pulido-Walker’s Estate Vineyard, Mt. Veeder, Napa: The Estate Vineyard of Mark Pulido and Donna Walker in Napa was destroyed, according to Christi Wilson, executive director of The Rancho Santa Fe Foundation. The owners confirmed that they lost their home and a portion of the estate vineyard during the Partrick Road Fire and that likely will impact their planned 2018 inaugural harvest from that vineyard.
Robert Sinskey Vineyards, 6320 Silverado Trail, Napa: Only some vegetation around the winery had burned by Tuesday. Rob Sinskey carries on his father Robert’s legacy, crafting top-notch pinot and merlot, as well as an acclaimed aromatic white blend called Abraxas. Sinskey’s wife Maria Helm Sinksey is a renowned chef and cookbook author, and the winery offers many food and wine pairing experiences, with a large open kitchen anchoring the tasting room. Sinskey is also an accomplished photographer, and is raising one of Napa Valley’s first truffle crops in his Carneros vineyard.
Roy Estate, 1220 Soda Canyon Road, Napa: Caught in one of the worst fire zones, the winery was extensively damaged. Cabernet sauvignon and red wine blends are the specialty of this boutique cult winery. Superstar winemaker Philippe Melka crafts highly sought after wines from the 17-acre estate vineyards in the Stag’s Leap District. Proprietor Shirley Roy carries on the winery legacy that she and late husband Charles launched in 1999.
Signorello Estate Vineyards, 4500 Silverado
Trail, Napa: The winery and residence in the Stag’s Leap District
burned to the ground Monday. According to spokesperson Charlotte Milan,
winery and vineyard employees fought the fire Sunday night into Monday
morning but had to retreat when flames overcame the building. All 25
winery employees were safe and proprietor Ray Signorello says he will
rebuild. Signorello is another top Stag’s Leap District winery, where
white and red Bordeaux varieties are the focus. Signorello was known for
the extensive food and wine pairings held at the winery and tasting
room, which boasted valley views from the patio and pool.
Sill Family Vineyards, 2929 Atlas Peak Road, Napa:
Photos provided to the Napa Valley Register show the winery destroyed by
fire, and owner Igor Sill told the paper by email, “We will rebuild as
soon as we’re allowed to return.”Silver Oak Cellars vineyard, Soda Canyon Ranch, Napa: The owners report on Facebook, “We have sustained only minimal damage to our Soda Canyon Ranch Vineyard in the Napa Valley. No vines were lost. Our harvest was complete before the wildfires began.” Silver Oak is one of the most well-known wineries in and outside of Napa Valley, earning critical and commercial acclaim around the world. The Duncan family owns the Oakville winery and tasting room, as well as vineyards in Napa and Sonoma. While Silver Oak is laser focused on its Napa Valley and Alexander Valley Bordeaux-style red blends, sister winery Twomey (with Calistoga and Healdsburg tasting rooms) is pinot noir centric.
Sky Vineyards, 4352 Cavedale Road, Mt. Veeder district: The family-owned winery has sustained fire damage but is still standing; the extent of the damage is unknown because the fire is still active in that area.
Stags’ Leap Winery, 6150 Silverado Trail, Napa: The main winery and tasting room in the Stags’ Leap District are intact, but some outer buildings on the property were lost. Stag’s Leap Winery is often confused with neighboring Stag’s Leap Wine Cellars, whose cabernet sauvignon beat the best French reds in the 1976 Paris tasting, but it is as historic. The winery was founded in the 1880’s with the planting of vineyards and the iconic Manor House followed in 1890. The first vintage came in 1893, the same year the wine caves were built.
Storybook Mountain Vineyards, 3835 State Highway 128, Calistoga: The historic Storybook Mountain Vineyards is safe, but a separate building holding library wines – bottles going back several vintages and more – was lost. Storybook was founded in 1883 by German immigrant Adam Grimm, and originally named Grimm Vineyards and Wine Vaults (Grimm’s brother joined him in the venture). The winery was abandoned post-Prohibition. In 1964 a fire destroyed the vineyard. The wine vaults – or caves – survived. Jerry and Sigrid Seps purchased the winery in 1976, renamed it Storybook (for the brothers Grimm), and began earning a reputation for quality zinfandel.
VinRoc, 4069 Atlas Peak Road, Napa: Proprietor and winemaker Michael Parmenter had to evacuate late Sunday night and confirmed Tuesday that his Atlas Peak district winery and home were destroyed. “Total loss, everything gone except our (wine) cave,” he said. Parmenter and his wife Kiki Lee built the winery from scratch, making critically acclaimed cabernet sauvignon from estate Atlas Peak district vineyards. They chose the name VinRoc as an homage to their rocky mountain vineyard and the wine cave carved out of rock. The winery was popular with visitors for its notable Napa Valley views.
White Rock Vineyards, 1115 Loma Vista Dr., Napa: Update — Initial reports said the winery confirmed it was destroyed in the fire, and a San Francisco Chronicle photo did show the burned out wooden cave doors and many destroyed bottles of fine. But the family reports that while the property had some damage, the winery and wines were safe in an underground facility and cave system and the vines are still intact.
William Hill Estate Winery, 1761 Atlas Peak Road, Napa: Damage to the winery’s entrance sign led to reports that the winery was destroyed. Owner E. & J. Gallo released a statement saying, “William Hill sustained only minor cosmetic and landscaping damage, in addition to minimal vineyard damage.”
Sonoma
Ahh Winery, Glen Ellen: The winery building at Glen Ellen’s Ahh Winery was completely destroyed, along wth its water system, reports owner Bruce Rector. “We are okay,” he says. “The good news is we have two years of inventory.”Ancient Oak Cellars, 4120 Old Redwood Highway, Santa Rosa: Ancient Oak Cellars’ home vineyard at Siebert Ranch, in the Russian River Valley, experienced significant loss because of fire. “I’m very sad to report that our house, two big beautiful redwood barns, gorgeous tasting counter, etc, etc are gone,” the winery wrote Tuesday on Facebook. The bottled wines and wines in barrel, however, were safe at other locations and the owners said Wednesday they believe the vines were spared.
Chateau St. Jean, 8555 Sonoma Highway, Kenwood: Despite early reports that the winery was destroyed, a drive-by Tuesday showed damage to some outbuilding and archway entries from the parking lot, but the main structure appeared unharmed. The main structure appeared unharmed. Blackened earth rimmed the property and billowing smoke still rose from the nearby hills as a helicopter dropped water on the flames. Known for its beautiful and extensive grounds and gardens, the Sonoma Valley winery is a popular visitor destination and wedding venue. The chateau served as a summer home, built for a Michigan family in the 1920s, and is now listed on the National Trust for Historic Preservation.
Domaine Carneros vineyard, on Stornetta Dairy property, Sonoma: The a sparkling wine house in Napa’s Carneros district escaped damage to its winery, the vineyard manager confirmed, but a one-acre estate vineyard burned. The vineyard was on the Stornetta Dairy property, which also burned down.
Gundlach Bundschu Winery, 2000 Denmark St., Sonoma: Despite earlier reports of significant fire damage, the winery buildings are structurally sound, said Katie Bundschu. But the property was on the fire line so Bundschu said the family is still assessing crop damage. Affectionately called “Gun Bun,” Gundlach Bundschu is California’s oldest family winery, established more than 150 years ago. Gundlach Bundschu practices sustainable farming methods, fish-friendly farming, and is a Bay Area Green Business, recycling glass bottles and corks and more, and is solar-powered. Gun Bun is also known for being a fun place to visit.
Nicholson Ranch, 4200 Napa Road, Sonoma: A Facebook post on the winery page clarified that damage was not significant. “The winery was in the path of the fire but escaped being engulfed by the flames. We have some damage to fix,” the post read.
Paradise Ridge Winery, 4545 Thomas Lake Harris Drive, Santa Rosa: The winery was completely destroyed on Monday by the Tubbs Fire. The Byck family, which owns the winery, posted on their website that they will rebuild. “The winery may be broken but our estate vineyards survived, which is foundation of our wine.”
Mendocino
Backbone Vineyard & Winery, Redwood Valley: In a statement, Sattie Clark said the small family winery that had replaced the former Cole Bailey winery was lost in the Redwood fire. “Our winery burned to the ground along with all our wine made over the past five years.”
Frey Vineyards, 14000 Tomki Road, Redwood
Valley: The country’s first organic and biodynamic winery lost its
winery and bottling facility but a wine-storage warehouse is still
standing; owner Paul Frey also said he is hopeful the vineyards received
only minimal damage. All wine orders have been suspended temporarily
until the family can fully assess the loss.
Golden Vineyards, Redwood Valley: The vineyards
themselves “are scorched but they are not ruined,” reports owner Julie
Golden. There is no winery on the vineyard property; it is located in
Hopland.Oster Wine Cellars, 13501 Tomki Road, Redwood Valley: Ken and Teresa Fetzer’s winery, which specializes in limited-production Cabernet Sauvignon, was destroyed in the Redwood Fire.