Oregon's Wildfire Risk Map & Homeowners Insurance

Oregon’s Wildfire Risk Map and Homeowners Insurance: What property owners should know

Insurance companies are not using – and have no plans to use – the state’s controversial wildfire risk map for underwriting/rating homeowners insurance policies.

In June, the Oregon Department of Forestry released a wildfire risk map that was intended to inform property owners about the threat of wildfire on or near their property. In some of the state’s predicted fire-threatened areas, property owners were informed that they might be required to make improvements to their homes or property to reduce their risk.

The map has been controversial since it was released, as property owners as well as some forestry experts challenged its accuracy. And there has been confusion and frustration from homeowners who are concerned that insurers have or will soon use the state’s risk map to decide which properties they will cover (the process known as underwriting) and whether or not premiums on some properties will increase (rating).

The Wildfire Risk Map has now been withdrawn by the state for further refinement. But insurance companies also want Oregon consumers to know that no insurers used, or have any plans to use, the state’s map for underwriting or rating homeowners insurance in Oregon.

In fact, the Oregon Division of Financial Regulation (DFR) recently published a news release assuring Oregon property owners that insurance companies did not and will not use the state wildfire risk map for underwriting or rating decisions.

The DFR issued a “data call” to insurers in Oregon (which insurers are required by law to answer truthfully) asking if any company is using or has plans to use the state’s wildfire risk map. All insurance companies responded and confirmed they do not use the map for rating and underwriting and have no plans to use it going forward.

While an insurance company can cancel or choose not to renew a homeowners policy under certain circumstances if proper notice is given, the Oregon Insurance Code requires every homeowners insurance policy to include wildfire coverage, according to the DFR’s Homeowner Rate and Underwriting Guide. Under Oregon law, homeowners policies must cover a fire loss no matter the source – whether the fire starts in a kitchen stove, an electrical system failure or a wildfire.

Every insurance company files unique rating and underwriting plans that must be reviewed and approved by the Oregon DFR prior to use in the marketplace. And every company uses time-tested, robust and accurate modeling and data to evaluate and price wildfire risks.

Oregon’s highly competitive homeowners insurance market includes roughly 150 companies. These different companies have varying “risk tolerance” for wildfire – which means some insurers may choose to limit the number of homes they insure in a high-fire-risk area, while others may continue to offer coverage to existing and new policyholders. Some may increase rates to reflect higher risk; others may not.

The bottom line: If you live in Oregon and have concerns about your homeowners policy, or if you have been notified that your policy will not be renewed, or that your premium is going to increase, you can work with your insurance agent or insurance company representative to help you find a policy that fits your needs. With nearly 150 companies offering homeowners insurance in Oregon, consumers still have the opportunity to “shop around” for a policy that provides the coverage you need at a price you can afford.

For more information about wildfires and insurance and the DFR’s news release about the wildfire risk map, visit the DFR’s website at Division of Financial Regulation : Wildfires : Storm damage : State of Oregon