Homeowners insurance continues to be concern

Facing double-digit premium increases or the inability to get renewed, many property owners in Sisters Country are scrambling to lower their costs or obtain new coverage. Some report being cancelled as the risk of wildfire is causing insurance carriers to reassess their exposure.

Janet Swarts in Sage Woods said, “Our former Insurance company, Travelers Insurance, cancelled our policies — home and auto — about six months ago due to fire-risk location. We had been with them for many years, both when we lived in Washington and when we moved here five years ago.”

Kathy Campbell responded to our query: “Farmers didn’t cancel us in Tollgate but the premium went up by about $1,000. All the companies seem to be claiming the state fire risk map (now rescinded) had no influence. Hmmm.”

Felix Felde of Junipine Acres said, “We’ve been getting quotes to see if we could better our rate. Latest from AARP (Hartford) was $29,000 per year (not a typo). So far, Farmers is the only company that will insure us for less than $2,000 a month.”

And dozens more tell of their woes as they struggle to afford or obtain homeowners insurance.

Local insurance agents admit to the problem, and cite their own losses when their clients switch carriers using Redmond or Bend agents.

Chris Adlam is a regional fire specialist at Oregon State University’s extension service fire program in Medford. He was hearing anecdotally that insurance providers were canceling Oregonians’ home policies due to fire risk — and then it happened to him.

“It’s not exactly a surprise to me, but a bit of a shock still because I thought that, having found this policy, it was just going to be there in the future and I didn’t realize that one day I’d call them up and they’d tell me ‘Oh, by the way, we’re not going to renew this policy,’” he told a local TV station.

According to Jason Horton, public information officer for Oregon’s Division of Financial Regulation that oversees insurance services in the state, companies are allowed to not renew policies because of a home’s wildfire risk. Each company has its own underwriting practices and risk tolerances that it must apply uniformly across the state.

During a renewal period, an insurance company can reassess if its risk tolerance policy will cover a home and how much it will cost.

SB82 intervention

The Oregon Senate passed a bill (SB82) last month that prevents insurance companies from using the ill-fated statewide wildfire risk map as a basis for canceling or refusing to renew policies, or for increasing premiums.

Senate Bill 82 would restrict how insurance companies can use wildfire risk maps. In part, it’s in response to last summer’s controversial map, which outlined wildfire risk at the property ownership level across the state. Oregon has seen $3 billion of property loss the last three years due to wildfire.

The House passed the bill April 26 and it’s headed to Governor Kotek’s desk. She is expected to sign it. In voting for the legislation, Representative Pam Marsh (D-Ashland) explained the effort.

“What that means is that insurance companies are increasingly looking at their portfolios and evaluating risk. And consumers are increasingly getting notifications that their canceled policies won’t be renewed, or that the policy price has gone up, or that they’re not insurable,” she said.

“So we want to protect consumers during this period, recognizing that insurance companies are going to make the decisions that they’re going to make based on their financial needs.”

The contentious wildfire risk map that was released last year was met with harsh criticism concerning how it might impact homeowners’ insurance rates. Marsh said this new bill is partially an effort to address that critique.

“That was an issue that came up big-time last summer. We want to make it clear that that’s simply not allowed. We don’t think insurance companies are doing it anyway, by the way. But now it’ll be in statute that they’re not allowed to do it,” she said.

The bill also makes clear that if an insurer decides to cancel or not renew a homeowner’s policy because of wildfire risk, they have to tell the homeowner why.

Portfolio risk

As the prices of homes have increased dramatically in Sisters, with over 100 properties in Sisters Country selling for more than $1 million in 2022, some insurance companies are reaching their portfolio maximum.

The median home price in Sisters is around $700,000. An insurer covering 100 homes has a risk of $70 million in the event of a catastrophic event like a wildfire wiping out all of its insured properties.

There is a cap they put on their portfolio in any given market, and several, it appears, have reached that in Sisters.