The Wild Ride of Oregon’s Homeowners: Navigating the Tumultuous Insurance Landscape
As the sun sets over the stunning Cascade mountains, casting an amber glow on the rooftops below, I can’t help but feel a twinge of unease. The once tranquil haven of home ownership in Oregon has been shaken to its core, as homeowners across the state find themselves grappling with a troubling new reality: skyrocketing insurance premiums, dwindling coverage options, and the looming specter of wildfires that have become an all-too-common threat.
I’ve had the privilege of sitting down with the insurance experts at Southern Roofing Company, who have been on the front lines of this unfolding calamity. Their insights, gleaned from decades of navigating the complexities of the insurance world, have been nothing short of eye-opening. Join me as we delve into the “Roof Calamity Chronicles” – a harrowing tale of resilience, adaptation, and the relentless pursuit of a viable insurance solution for Oregonians.
The Perfect Storm: Wildfires, Climate Change, and the Insurance Exodus
The 2020 Labor Day Fires were a watershed moment for Oregon, destroying more than 4,000 homes and becoming the state’s most expensive natural disaster in history. In the aftermath, the insurance landscape began to shift dramatically, mirroring the tumult seen in states like California and Florida, where natural disasters have ravaged homes and communities.
“If you want to know what the next five years look like in Oregon, look at southern California,” Perry Rhodes, a seasoned insurance agent in Bend, told me. “If you want to know what this looks like if things get even worse, look back east to Florida.”
As the impacts of climate change continue to intensify, the insurance industry has been forced to reckon with a stark reality: the increasing frequency and severity of natural disasters is rapidly outpacing their ability to manage risk. In response, major insurers like Farmers, Safeco, and Progressive have begun to tighten their grip on the Oregon market, declining coverage or refusing to renew policies in certain high-risk areas.
“Companies either have to reduce their risk exposure in order to reduce the threat that a major wildfire will wipe them out, or they have to increase premiums, or they have to do both,” said Kenton Brine, president of the Seattle-based NW Insurance Council.
The Disappearing Safety Net: Oregon’s Vanishing Insurance Options
As the insurance giants retreat, homeowners in central, southern, and eastern Oregon have found themselves facing a grim reality: options are dwindling, and premiums are skyrocketing. In Bend, Ashland, Medford, and Hood River, agents report that policies under $1,000 per year have become “extremely rare,” with some residents seeing their premiums double or quadruple in the last few years.
Barbara Klein, a homeowner in Ashland, shared her harrowing experience: “My home insurance premium with Allstate nearly tripled in the last five years, from $556 in 2019 to more than $1,400 in 2023.” When she reached out to Amica, another insurer, she was met with a cold reality: “They said that they are not taking any more customers from your area due to fire risks.”
Across the state, in counties like Jackson, Hood River, Deschutes, Umatilla, and Malheur, homeowners echo similar stories of unprecedented premium hikes and the disappearance of viable insurance options.
Navigating the Uncertain Terrain: Insurers’ Response to Wildfire Mitigation
In the face of this crisis, lawmakers in Oregon have attempted to find solutions, passing legislation aimed at encouraging insurers to reward customers for hardening their homes and communities against wildfires. However, these efforts have had little to no impact thus far, according to interviews with policyholders, agents, brokers, and industry leaders.
“Recent laws passed by the Legislature to encourage insurance companies to reward customers for hardening their homes and communities against wildfires have had little impact so far,” the Oregon Capital Chronicle reported.
When I reached out to some of the largest insurers in the state, the responses were discouraging. A representative from State Farm, the company with the largest share of Oregon’s property insurance market, flatly stated that the company would not offer discounts for home hardening efforts. April Locke, a spokesperson for Capital Insurance Group, echoed this sentiment, saying, “We have specific underwriting standards related to locations exposed to the hazard of wildfire and do not offer accommodations related to our standards nor our pricing for any wildfire mitigation actions undertaken for a specific location.”
However, there was a glimmer of hope: Carly Kraft, a spokesperson for Farmers, which holds about 9% of Oregon’s property insurance market, shared that the company “will start offering discounts in July 2024 for customers who have implemented various Firewise fire reduction measures.” This includes measures like ignition-resistant siding and roofing, as well as clearing out shrubbery and trees around the home.
The Costly Conundrum: Investing in Home Hardening as a Double-Edged Sword
As homeowners in Oregon grapple with the realities of this insurance crisis, the experts at Southern Roofing Company have a sobering message: “The cost of insurance is going to go up. I don’t see a scenario where you do work around your home and your insurance rate goes down.”
Bob Horton, the director of research and policy for the Wilsonville-based Western Fire Chiefs Association, echoes this sentiment, but suggests that investing in home and community hardening may be the best option available. “It could help stave off a future of sky-rocketing premiums and help some people keep policies they currently have. It also has the added benefit of potentially saving homes and neighborhoods.“
Jeff Melville, the owner of High Desert Insurance in Bend, explains the insurers’ perspective: “Insurance companies don’t say, ‘Well, Steve lives on this street and he’s got defensible space, but Billy lives four houses down and he hasn’t done anything yet.’ They really aren’t going to take a look at each house – there’s just not enough premium there. They’d rather just say, ‘We’re not insuring any of them.’“
It’s a Catch-22 that leaves homeowners in a precarious position: invest in costly home hardening measures, only to potentially see little to no relief on their insurance premiums. But the alternative – doing nothing – could have even more dire consequences, as the risk of losing one’s home to a wildfire looms ever larger.
Seeking Shelter in the Storm: The Rise of FAIR Plans and the Uncertain Future
As the insurance crisis deepens, some homeowners in Oregon have turned to the state’s FAIR plan – the Fair Access to Insurance Requirements plan – as a last resort. These plans, which exist in more than half of the states, are designed to provide coverage for properties deemed too risky for traditional insurers.
However, the FAIR plan in Oregon is far from a panacea. The plan will only pay up to $600,000 for damage or loss, leaving many homeowners with significant gaps in coverage. Moreover, the premiums for FAIR plans are often higher than average, adding further financial strain to those already struggling.
Demand for California’s FAIR plan has doubled in the last four years, now covering 3% of all California property owners. In Oregon, FAIR plans cover just a tiny fraction of the market – about 1,700 homes, farms, and commercial properties, down from a high of 2,000 a decade ago. But the number of new applicants rose to 500 in 2023, up from 168 in 2020, a trend that experts say could continue.
Greg White, the owner of Reinholdt & O’Harra Insurance in Ashland, expressed his doubts about the market’s ability to rebound: “Carriers are just not interested in writing new business or growing. I don’t know that we’re gonna get out of this one. This one is different.“
A Glimmer of Hope: The Resilience and Adaptability of Oregonians
As I reflect on the conversations with the insurance experts at Southern Roofing Company, I’m struck by the resilience and adaptability of Oregonians. In the face of this mounting crisis, they are not simply resigned to their fate – they are actively seeking solutions, advocating for change, and investing in the long-term resilience of their homes and communities.
Senator Jeff Golden of Ashland, a key figure in the fight for wildfire mitigation legislation, remains steadfast in his belief that “investing in fire-resistant roofs, siding, and clearing out vegetation to make communities resilient and accessible to firefighters are the only options to bring insurers back to parts of the state and curb rising premiums.”
And while the path forward may be uncertain, the determination of Oregonians to protect their homes, their communities, and their way of life is unwavering. As the sun sets once more, casting its warm glow over the rooftops, I can’t help but feel a sense of hope – a hope that, with resilience and innovation, this “Roof Calamity” can be weathered, and a new era of stability and security can dawn for homeowners in the Beaver State.
Southern Roofing Company stands ready to support Oregonians in this journey, offering expert guidance, top-quality roofing services, and a steadfast commitment to building a more resilient future. Together, we can navigate the challenges ahead and emerge stronger, more connected, and better prepared to face whatever the elements may bring.