Podcast Summary: The Indicator from Planet Money Episode: Why Can't We Insure Trees?
Release Date: July 7, 2025
Host: Waylon Wong
Guest: Ellie Katz, Interlaken Public Radio, Michigan

Introduction and Context

In the July 7, 2025 episode of The Indicator from Planet Money, host Waylon Wong explores a pressing yet overlooked issue in the agricultural and forestry sectors: the lack of insurance for standing trees. The discussion is framed against the backdrop of a devastating ice storm that struck northern Michigan earlier that spring, causing unprecedented damage to millions of acres of forest land.

Impact of the Ice Storm on Michigan's Forests

Ellie Katz, representing Interlaken Public Radio in Michigan, sets the scene by detailing the severity of the ice storm. She recounts, "It was like the worst ice storm we've had since 1922. There were power lines coming down, trees coming down. It was pretty bad." ([00:29])

Waylon adds, "Over a million acres of forest land were damaged. The pictures looked like the tops of all the trees just got sheared off" ([00:36]), highlighting the extensive nature of the devastation. The storm left many trees resembling matchsticks, drastically altering the landscape and impacting those who depend on these forests for their livelihoods.

Interview with Dale Forester: A Maple Producer’s Struggle

Ellie Katz introduces Dale Forester, a maple syrup producer from Atlanta, Michigan, whose family has been in the business for generations. Speaking immediately after the storm, Dale assesses the damage: "This tree here possibly will make it, but the one back there won't make it. So I would guess, you know, we're pretty close to 50% just showing you trees here that aren't going to make it" ([00:57]).

Dale expresses his profound connection to his work and the trees, stating, "I tell people, this one here, God's on top. My family, my trees, and then everybody else, I think of my trees" ([03:43]). His sugar house, a central hub for syrup production, showcases the tangible losses, yet his facilities and equipment remain insured, unlike the trees themselves.

The Insurance Gap for Trees

The core issue discussed is the absence of insurance coverage for standing trees and their taps. Despite insuring buildings, equipment, and finished products, tree owners like Dale face significant financial losses without insurance support. Before the ice storm, Dale owned approximately 10,000 tappable maple trees, valued at around $600,000. Post-storm estimates pegged the property value at roughly $350,000, a stark decrease attributed solely to irreversible tree damage.

Ellie elaborates, "There's no insurance payout to help him with that" ([04:18]), underscoring the precarious financial situation for tree-dependent businesses and landowners.

Challenges in Implementing Tree Insurance

Waylon and Ellie delve into the broader implications of uninsured timberlands in the U.S. They note that approximately 60% of Michigan's timberland is privately owned, and this trend scales nationally, leaving hundreds of millions of acres of timberland vulnerable. Even fruit trees lack comprehensive insurance, with only the fruits themselves being covered.

Ellie mentions, "I called up landowners and forestry consultants and insurance agents and kept getting the same responses like, I've never thought about this before, or I've never even heard of that idea" ([04:43]), highlighting the lack of awareness and existing market structures that exclude tree insurance.

Dawei Zhang, a forest economics student from Auburn University, provides insight into the economic barriers: "Premiums were low enough, landowners would be willing to pay for timber insurance. But the market rate is much higher than that, like anywhere from 0.5% to 1%" ([05:44]). Applying this to Dale’s situation, the cost would have been significantly higher than what landowners are willing to pay, creating a disconnect that hinders the adoption of tree insurance.

Moreover, Valuing standing trees presents another challenge. Michael Hosmar from Fisher Investments explains, "For forest, it's different species, different locations. And as trees grow, they change in value every year. Not to mention certain types of lumber are more valuable than others, and that's constantly changing" ([06:59]).

International Models and Potential Solutions

Despite these challenges, the episode highlights that tree insurance is feasible, citing examples from countries like China, France, Germany, Norway, and Finland where tree insurance exists.

Ellie outlines two primary models:

1. Government Intervention:
   After severe cyclones in 1999 and 2009, France mandated forest owners to purchase insurance, creating a structured market that balances premiums and demand. Similarly, China’s government stepped in to establish a market where none existed, ensuring more affordable premiums through regulation.

2. Cooperative Models (Nordic Model):
   In Norway, Finland, and Sweden, timberland owners formed cooperatives that collectively negotiate premiums and guarantee insurance companies a solid customer base. This collective bargaining power helps reduce costs and streamline the insurance process.

Waylon notes, "Climate scientists are predicting more extreme weather events like this one in Michigan on the horizon, and maybe that'll get more people thinking about tree insurance" ([08:44]). However, Dawei remains skeptical, believing that such events alone won’t sufficiently drive down premiums to encourage widespread adoption.

Future Outlook and Relief Efforts

In the absence of available insurance, landowners like Dale Forester are seeking alternative forms of relief. Dale shares his plans: "We're going to plant some maples and we're going to plant some pines. Not that I'm a pine tree person. But we're going to plant some maples" ([09:07]). This reforestation effort aims to restore his maple pipeline capacity and ensure long-term sustainability.

Additionally, there has been progress in insurance coverage for specific components. Dale mentions that Michigan insurance agencies have started reimbursing for his maple lines—the plastic tubing in the woods that transports sap ([09:26])*—a small but significant step towards mitigating future damages.

Conclusion

The episode concludes by highlighting the urgent need to address the insurance gap for trees, especially as climate change induces more frequent and severe weather events. While international models offer pathways, the U.S. must navigate its unique challenges to create viable tree insurance solutions. In the meantime, producers like Dale Forester continue to seek relief and adapt to ensure their livelihoods and the health of Michigan’s forests.

Notable Quotes:

• Dale Forester on tree survival: "This tree here possibly will make it, but the one back there won't make it. So I would guess, you know, we're pretty close to 50% just showing you trees here that aren't going to make it." ([00:57])

• Dale Forester on priorities: "I tell people, this one here, God's on top. My family, my trees, and then everybody else, I think of my trees." ([03:43])

• Dawei Zhang on insurance premiums: "Premiums were low enough, landowners would be willing to pay for timber insurance. But the market rate is much higher than that, like anywhere from 0.5% to 1%." ([05:44])

• Michael Hosmar on valuation challenges: "For forest, it's different species, different locations. And as trees grow, they change in value every year. Not to mention certain types of lumber are more valuable than others, and that's constantly changing." ([06:59])

• Ellie Katz on international insurance models: "Countries like China, France, Germany, Norway and Finland, they all have tree insurance." ([07:41])

Produced by: Julia Ritchie
Engineering by: Kwesi Lee
Fact-checked by: Tyler Jones
Edited by: Cake and Cannon
Production: NPR