Guest Post: The Oregon Wildfire Hazard Map Is Back – And It Can’t Affect Your Insurance!

“It’s baa-aaack!”

Yes, the return, or should we say “re-do” of the Oregon Wildfire Hazard Map (originally referred to as the “Oregon Wildfire Risk Map”) has been released by the Oregon Department of Forestry (ODF) this week (July 18, 2024).

The release of the map in draft form starts the clock on a 30-day public comment period and follows a series of public meetings held in six locations around the state in June 2024. Oregon property owners can now review the map and their own property’s relative hazard risk using the now-live Wildfire Risk Explorer website.

The map is the result of legislation (SB 80) enacted by the Oregon Legislature during the 2023 session. It was designed to replace the wildly unpopular Wildfire Risk Map that was unveiled (and reviled, then withdrawn) in 2022.

What’s new with the Hazard Map?

So, what’s new? The name, for starters, changing from “Risk” map to “Hazard” map. But the map has also been subject to more scrutiny and input from more sources, and in a more transparent, public-facing atmosphere. Even as unveiled, the map is still a draft, and is subject to change, based on public input during the comment period (through August 18). Even after the map and new building code-related rules are officially adopted by ODF, property owners will have the opportunity to appeal the map designations for their properties, until November 30, 2024.

You can read more about the Wildfire Hazard Map timelines here. You can read the ODF news release about the Wildfire Hazard Map (draft) release here.

Insurers do not – and cannot – use the new map.

Here’s something that has not changed: Insurance companies do not use any map produced by any agency or educational institution of the state of Oregon to underwrite (write, renew, non-renew or cancel) or rate (set, raise or decrease insurance premiums) insurance policies in the state of Oregon.

Insurance companies are highly competitive with each other, and they have long preferred to develop their own proprietary risk assessment tools. Not just because they may be more accurate, but also because they can look at risks in the way that best aligns with their own business model – which properties they are interested in insuring, and how much they need to charge for their policies in order to (1) meet the financial obligations and promises they make to their policyholders, (2) be able to purchase their own “reinsurance” policies, which serve as a “backstop” in case of a large-scale disaster, and (3) make a reasonable profit for shareholders (or members, in the case of mutual insurance companies, which are owned by their policyholders).

So, let me say that again, just for clarity’s sake: Insurance companies do not use – and have never used – the state Wildfire Risk Map or the state Wildfire Hazard Map to make decisions about which properties to insure, renew, non-renew or cancel, or to decide how much a policyholder should pay for insurance.
And now, thanks to legislation enacted in 2023 (SB 82), insurance companies are banned by law from using any state-developed map for underwriting or rating purposes.

What do insurers use to help determine where they will sell or renew property policies and set premiums?

Some larger insurers may develop their own risk modeling. But most use risk and catastrophe models that are highly sophisticated and tailored to their needs, developed by vendors like Verisk. These hazard/risk models have been developed over many years and include topographic data, fuel load information, historic weather event information, dwelling construction materials and more. Insurers rely on these tools to determine underwriting and rating plans, which then are submitted to the Oregon Division of Financial Regulation, which must approve all insurance policy forms and rates before a company can use them in the Oregon marketplace.

Once an insurance company’s rating plans are approved, that becomes the “base rate” for the premiums insurers charge, but that doesn’t mean every policyholder pays the same premium. The information insurers gather about individual properties – like the roofing and siding material and condition/age of the structure, the amount of defensible space, the history of claims on a structure and other factors all play a role in the premium charged by the insurer – and it can vary widely from one insurer to another. That’s why it is so important for homeowners to (1) do all they can to reduce their risk of loss due to fire, and (2) shop around for insurance coverage, to find the most comprehensive coverage at the best price.

What should property owners do now?

First, know that more than 365,000 acres have already burned across Oregon so far this fire season. Whether your property has a high or low hazard designation, you can improve your chances of saving your home and minimizing property damage by engaging in defensible space and home hardening actions on your property. The Office of the State Fire Marshal (OSFM), the Division of Financial Regulation (DFR) and the Oregon Department of Forestry (ODF) have great information about building defensible space. The Insurance Institute for Business and Home Safety and the Firewise USA websites have excellent information about home hardening – which can be simpler and more affordable than people realize.

Second, review the new Hazard Map and see if it reflects your property’s risk of loss during a wildfire (and whether/how it may or may not contribute to fire spread in your community). If you have concerns, make them known to ODF during the official public comment period.

Third, know that under SB 82 passed in 2023, insurers are required to provide reasonable explanations to consumers if they non-renew a homeowners’ policy or increase premiums specifically due to wildfire risk. And if your insurer has taken this kind of action, it is a good idea to contact your insurance company or agent to find out more. If the company is relying on a proprietary industry risk map and you believe the information they’ve used is incorrect, you may be able to work with your insurer and/or their risk map provider to correct the information. If you’ve been non-renewed, there are still many companies writing homeowners’ insurance in Oregon, but you may need to do more homework and contact more agents or companies to find them.

Resilience is the goal, and we’re all in this together.

One way to look at the new Oregon Wildfire Hazard Map is as “another big-brother program imposed on property owners.” But another, more hopeful way, is to see an opportunity to correct errors on the map and/or better understand – and be empowered to respond to – your home’s risk of loss in a wildfire. Insurers are part of still-developing wildfire response/resilience efforts in Oregon and around the country, and we stand ready to help lead efforts to move Oregon forward in wildfire resilience at the parcel and community level.

Kenton Brine serves as President of the Northwest Insurance Council, a non-profit, insurer-supported organization that provides information about auto, home and business insurance to consumers, media and policymakers in Oregon, Washington and Idaho. www.nwinsurance.org.

The opinions expressed in this post are those of the author and do not represent the opinions or positions of the Oregon Property Owners Association, or any party represented by the OPOA Legal Center on any particular matter.