A number of readers were concerned about The Nugget’s story on February 23 that brought to attention to the difficulty some property owners were experiencing in obtaining or renewing homeowners insurance when the insured property was not rating well.

Reader Craig Rullman took the time to write a letter that appeared in last week’s issue, sharing his experience with renewing his policy on his rural property. His letter ended with a warning about the deleterious impact underwriters’ decisions might have on property values.

The Nugget’s story centered on the models insurers are employing to assess their risk and help set premium rates, particularly in exurban and rural areas. The model we cited was the FireLine® Score, a product of Verisk, a $3 billion New Jersey-headquartered public company. We included State Farm among the major insurers using the FireLine model, when in fact State Farm uses its own ratings model.

The very nature of insurance means that all insurance carriers use some form or another of risk calculators to gauge a property’s exposure to hazards. It’s all about risk, and the insurance companies have taken a beating in the western states these last drought-fueled fire years. It is not surprising that some are choosing to stop insuring in wildfire environments, or raising premiums to compensate for their increased risk and payouts.

Few companies provided homeowners insurance in Oregon as compared to auto insurance. And the number has been declining throughout the western states given the loss experience, particularly in California.

The prospect of another severe fire season continues to impact the homeowners insurance market. Aon PLC, a major international service firm that sells risk-mitigation products, in a recent white paper, said the market continues to restrict capacity to cover wildfires as the events become larger and more frequent.

Insured losses from wildfires in the U.S. have exceeded $13 billion and economic losses have topped $20 billion in three of the last four years, according to Aon. In Oregon alone, losses related to wildfires at Farmers Insurance Group of Companies reached $2.1 billion in 2018 alone. Allstate’s payouts exceeded $300 million in 2020. State Farm paid out $219 million in 2020 while taking in $210 million in premiums. Liberty Mutual collected just under $140 million in 2020 premiums but paid out $226 million. It’s easy to see why insurers are reevaluating who gets a policy.

Notwithstanding the scary nature of the changes happening in the insurance marketplace, don’t panic: At least that’s the advice of mortgage broker Pat Riley, whose office is getting calls from mortgage holders worried that a canceled insurance policy will cause their mortgage to forfeit.

“It’s almost impossible to not find an insurer willing to underwrite your property,” Riley said. “Premiums may increase if you cannot mitigate some of the risk around your home, or you may not be able to get the same coverage or deductibles, but you will not be frozen out of the market.”

Fire Chief Roger Johnson of Sisters-Camp Sherman Fire District reminds residents that the District offers free consultations for local homeowners to review their home and look for ways to make their property more defendable during a wildfire and to help prevent the spread of wildfire. Johnson stresses the need for neighborhoods and subdivisions to be Firewise. He asks all Sisters homeowners to visit https://www.projectwildfire.org/firewise-usa/ to learn how to make their properties more fire resistant.

Linda Allredge of Country Financial in Sisters whose firm writes homeowners insurance suggests: “Don’t call attention to your home with underwriters. If you have too many small claims in this environment that gets you noticed. It may be more prudent to go out of pocket a little and save for the truly big claim.”

She also advises against insurance shopping right now.

“It’s counter-intuitive but if you’re happy with your carrier avoid trying to save a few dollars and having your property reviewed,” she said.

Allredge reiterated the need to clear brush and debris putting more distance between your home and ignition sources.