Forest insurance
A policy covering standing timber against fire and, increasingly, windstorm, paying for the value of lost wood and for cleanup and replanting costs according to a per-hectare schedule.
Forest insurance covers the value of standing trees and the cost of restoring a stand after a loss, mainly from fire and windstorm. France has its dated lesson. On January 24, 2009, windstorm Klaus blew down or snapped 42.5 million cubic meters of timber across more than 685,000 hectares, including 37 million of maritime pine, more than five years of harvest; Aquitaine took 95% of the damage, and private forest owners most of it. Ten years after Lothar and Martin, most owners were still uninsured against windstorm, and the public windthrow plan, raised to 490 million euros, paid for cleanup and replanting. The policy is written stand by stand, on a per-hectare value set by species and age class. Underwriters separate the value of harvestable wood, which drops after a storm because the market is flooded, from the future value of a young stand that has not yet produced any income. The indemnity often pays a flat cleanup and replanting allowance rather than market value. The underwriter looks at species (softwoods snap more than hardwoods), age, height, wind exposure, and the presence of access roads and water points for fire. Accumulation is the core problem: a storm like Klaus or a fire season like 2022 hits thousands of neighboring stands. Hence high deductibles, per-event caps and catastrophe excess of loss reinsurance.
Textbook case: a Landes owner insures 120 hectares of 25-year-old maritime pine at 4,000 euros per hectare, with a deductible of 10% of the insured value per stand. A windstorm blows down 80 hectares. The salvaged wood, sold at a distressed price, brings in 900 euros per hectare. The insurance pays the gap between insured value and salvaged wood on the 80 hectares, or 248,000 euros, less the 32,000 euro deductible, plus a replanting allowance under the policy schedule.
forest insurance, timberland insurance, standing timber insurance, forestry insurance
Follow the research
One letter a week. First, the week's underwriting note, when one is published: a dated, argued decision, signed by Paul Bernardski. Then what the observatory published on cyber risk, political risk and insurance. No account, no tracking.
No spam, one-click unsubscribe, no data ever sold.