Home Insurance State regulator says controversial wildfire risk map not affecting insurance rates and availability

State regulator says controversial wildfire risk map not affecting insurance rates and availability

State regulator says controversial wildfire risk map not affecting insurance rates and availability

The fallout over Oregon’s new state wildfire risk map continued Friday, as the state insurance regulator issued a news release attempting to reassure angry property owners that insurers are not and have no intention of using the map to make decisions about whether to insure individual homes and at what price.

He also issued a bulletin to insurance agents warning them that falsely blaming their decisions on the state’s map is against the state’s insurance code, and violators are subject to a penalty of up to $10,000.

The unusual move comes in the wake of public and political outcry following the Oregon Department of Forestry’s release of the map in June. Follow-up letters went out in July to tens of thousands of property owners warning them that their property was considered at “high” or “extreme” risk of burning and would be subject to new building code requirements and obligations to clear flammable vegetation from around existing homes and structures.

The reaction was swift and negative. Some 2,000 people sent comments to the agency, and its staff faced a raft of criticism from angry property owners at a virtual meeting attended by some 1,200 people on July 26. Many of them claimed the map was inaccurate, would require costly investments to reduce fire risks, and would impact insurance rates and availability.

With Republicans using the firestorm over the map as a political cudgel and the agency facing legitimate questions about its accuracy, State Forester Cal Mukumoto decided last week to pull the plug — withdrawing the map and suspending the risk designations for individual properties — until the map is refined.

In the news release Friday, State Insurance Commissioner Insurance Andrew Stolfi said new data collected by the Division of Financial Regulation indicates that the fears over insurance companies using the map to make decisions are unfounded.

The division put out a formal “data call” to insurers doing business in Oregon to determine if they were using or planned to use the state wildfire risk map for underwriting or rating decisions. Underwriting is the risk analysis process an insurance company goes through when issuing or renewing a policy. Rating is the pricing process.

The agency said insurers are required to answer data calls truthfully, and all responded that they don’t use the state’s wildfire map and have no plans to do so. Nor has the division received any new proposed rate filings that include the state wildfire map as a rating factor, the agency said.

“This confirms what we knew: Insurance companies are not using the state wildfire risk map,” Stolfi said in the news release. “Insurance companies have been using their own risk maps and other robust risk management tools to assess wildfire risk for years in making rating and underwriting decisions.”

Unfortunately, he added, wildfire risks have increased in Oregon. People who are canceled or non-renewed should work with an agent or contact the division’s consumer advocates if they need help.

The threatening bulletin that went out to insurance agents said consumers need accurate information about decisions made with respect to their policies.

“The insurance industry has robust data tools used to make pricing and underwriting decisions that have been in the marketplace for years,” it said. “Falsely attributing rating or underwriting decisions to the state wildfire risk map is a violation of the Insurance Code. Any person who violates a provision of the Insurance Code may face up to $10,000 in civil penalties per violation.”

Meanwhile, the Department of Forestry has no solid date for when the revised map and risk designation will be available. Derek Gasperini, a spokesman for the agency, said Friday that Doug Grafe, the state’s wildfire programs director and former chief of fire protection at agency, will be meeting with the state forester next week to establish a timeline.

– Ted Sickinger; [email protected]; 503-221-8505; @tedsickinger