Oregon renews wildfire insurance policy
Oregon officials and forestland owners have renewed the states wildfire insurance despite failing to reach the policys $50 million deductible last year.
The price of the premium declined by $300,000 to $3.45 million in 2016, according to the Oregon Department of Forestry. Underwriters gave the discount because state made no claims on the policy in 2015, said Sen. Alan Bates, D-Ashland.
The $25 million policy is underwritten by Lloyds, a London insurance consortium, and AXIS of Bermuda.
Federal and state agencies spent $94.4 million on wildfire suppression in 2015, according to the Legislative Fiscal Office. Only about $30 million of that, however, was counted toward the states wildfire insurance deductible.
A committee of public and private forestland owners voted in March to renew the policy. That committee typically pays 50 percent of the premium but could only pay 11 percent this year because state law limits how much it can spend fire suppression. It has already hit that $13.5 million threshold, leaving the state to make up the difference of nearly $1.4 million. The Joint Legislative Emergency Board – which approves budget adjustments between legislative sessions – approved that additional expenditure Wednesday.
Oregon is the only state in the nation to purchase wildfire insurance, though Washington also is considering acquiring a policy, said Rod Nichols, spokesman for the Department of Forestry.
Oregon first purchased a policy in 1973 and has been doing so ever since, Nichols said. In many years, our expenditures did not meet the deductible, and the state filed no claims. But in severe fire seasons, the policy protected the general fund and prevented major disruption to state government programs across the board.
Between 2003 and 2012, for instance, the state made no claims on its policy, but in 2013 and 2014 it received the maximum payout on claims of $25 million each year, according to data from the Department of Forestry. In total, the state has received about $40 million more in payouts than it has spent in premiums, the data show.