Oregon lawmakers, insurance commissioner respond to wildfire map concerns

SALEM, Ore. — Oregon's insurance commissioner and some lawmakers say a new wildfire risk map that has prompted some backlash from residents will not cause insurance rates to increase.

They claim insurance companies have their own tools to determine wildfire risk and would not be using the one that the state used over $2 million to build.

Kevin Cassidy, however, says he believes the map is the reason his insurance provider dropped him in July.

"I received a letter basically stating that they were canceling our policy due to high fire risk," said the Baker County resident. "I've had the same insurance provider for over 20 years, and we were up for a renewal in late July."

He said there have been no changes in the area since his last renewal two years ago, so he can't think of any other reason for his insurance provider to have dropped him. When he finally found another provider, he had to settle for a rate that was double what he had been paying.

He noted that he asked his broker to find out what models the insurance company was basing this on but said he could not get a clear answer from them.

It was pushback on insurance costs as well as confusion over how much cost property owners in high-risk zones would have to shoulder to increase their defensible space that prompted the Oregon Department of Forestry to withdraw the map. The agency said it will republish it in early 2023 after the State Fire Marshal's Office has a chance to finalize defensible space rules.

Some, mostly Republican, lawmakers advocated to pull the map. Rep. Brock Smith, R-Port Orford, was one of them. He said he had warned the bill's sponsor, Sen. Jeff Golden, D-Ashland, that "this (pushback) would happen."

"It was really disappointing through the process that Sen. Golden refused to work with individuals like myself and others that have dealt with wildfire for years," he said. "We needed to make sure that the language in the bill was such that we could move forward and actually not put these properties in these risk categories that then could jeopardize their insurance ratings."

Smith said he advocated for a more boots on the ground approach that would reward homeowners for making fire safety improvements without putting them at risk for higher insurance costs.

SB 762, was signed into law last spring and received bipartisan support.

Lawmakers who pushed for this bill, however, say they do not believe that insurance rates will be impacted. Golden did not immediately reply to a request for comment, but in previous public hearings he has noted that he does not believe this will be an issue. His colleague, Rep. Pam Marsh, D-Ashland, said she has been working with Oregon's insurance commissioner and does not believe the maps will affect insurance rates.

"They (insurance companies) do have proprietary maps that they are using to do insurance work right now," Marsh said. "For example, my own family owns 140 acres in an extreme risk area and within the WUI (Wildland Urban Interface) our insurance was canceled a year ago (before the maps went public)."

When asked why she believed insurance companies would not make use of a tool that Oregon spent over $2 million to create, she said the tool was built to "tell ratepayers what insurance companies already know."

Research from California's Department of Insurance notes that in2020, 212,727 residents were dropped from their insurance provider. In 2017, California's insurance commissioner noted that the majority of insurer-initiated non-renewals (drops of coverage) came in areas that the state's risk maps (that had last been updated in 2007) had identified as high risk for wildfire.

"Based upon a survey of all residential property insurers over a two-year period, there has been a significant increase in insurer-initiated non-renewals in the California counties with the highest proportion of homes located in high-risk-for-wildfire areas," the study notes.

But according to Marsh and Oregon's Insurance Commissioner's Office, providers in Oregon would not use the maps as a tool.

"The map was really intended to make sure that we as public agencies can make the best possible choice about how we spend public money," Marsh said, noting that the state has set aside funds to help homeowners in high-risk areas improve defensible space. She said she has also asked the insurance commissioner to continue investigating whether the maps are being used by insurance providers.

She noted that in the future she may look to partner with insurance providers to come up with a way that homeowners can obtain a certificate of fire-safety to reduce insurance costs once they have performed improvements to their property.

California's insurance commissioner recently enacted rules requiring insurance companies to take homeowners' fire safety home-improvement actions into consideration when calculating insurance costs.

The Insurance Commissioner's Office was unable to interview but released the following information in response to KATU's questions via email.

Q: I am hearing from residents saying they were dropped by their insurance company within weeks of that map going public. The company would not say if they used the map but indicated the property was in high risk area. Residents say no other changes happened since their last renewal except for the map’s publishing with them in high risk. Where do they report these instances?

"We take very seriously any adjustment in rates and if consumers have concerns, they should contact us at the Division of Financial Regulation’s consumer advocacy hotline, 888-877-4894 (toll-free)."

Call : 888-877-4894 (toll-free) if you believe you were dropped because of Oregon's Wildfire risk map

Q: Are you doing anything else to investigate whether insurance would be impacted, other than calling the companies and asking them if they will use it? Essentially, are you doing investigation outside of trusting the word of insurance companies?

"Our data call is much more than calling the companies to ask them. We are exercising our statutory authority to demand answers to three clear questions that insurers must honestly answer.

The questions are:

Does the company use the state wildfire map for rating or underwriting?

Does the company use the state wildfire map for any other purposes?

Does the company plan to use the state wildfire map for any purpose in the future?

Insurance companies are required to provide truthful answers to our inquiry, and are subject to administrative penalties if they do not respond truthfully. We verify the company answers by investigating consumer complaints and inquiries, and by engaging market conduct examinations. It is also worth noting that insurance companies must file their rating plan with our office, which includes the methodology used to develop rates. We have not received any updated rating plans since the wildfire map was published, which is another step in verifying that the map is not in use.

In discussing this with insurers, we understand that they have more precise tools to be used to gauge wildfire risk. This analysis occurs on an almost real-time basis as insurers have access to numerous mapping tools and data sources that they purchase or can acquire from their reinsurance company."

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