Oregon has purchased wildfire insurance to protect against the dry season
Oregon is preparing to handle its dry season with the purchase of wildfire insurance. This type of insurance coverage is meant to protect the state from the onslaught of wildfires that could emerge in the state due to dry conditions. The insurance is meant to help cover the costs associated with these disasters, reducing the state’s financial exposure and providing it with some breathing room when it comes to recovery.
Insurance policy from Lloyd’s of London will provide $25 million in coverage
The state has purchased wildfire insurance from Lloyd’s of London. The policy was purchased through the Oregon Department of Forestry, and the policy provides $25 million in coverage. This coverage will kick in when firefighting costs exceed $50 million, with the policy providing as much as $25 million to cover these costs. Premiums for this coverage are being split between state and private timberland owners, whom have agreed to pay $3.75 million into the policy.
Wildfires in 2014 caused $75 million in damage in the state
Last year, wildfires in the state caused an estimated $75 million in damage. Some of this damage was caused to properties that are located near woodlands. According to the Oregon Department of Forestry, the wildfire insurance policy purchased from Lloyd’s of London is the only one of its kind in the United States. This policy may provide the state with the protection it needs from the financial damage that can be caused by wildfires. Such disasters have proven to be quite expensive in the past, but the state has managed to handle these costs to some extent.
Wildfires may make insurers wary of providing coverage to Oregon in the future
The Department of Forestry hopes that the state will not have to make use of its wildfire insurance this year. This would be the third year in a row that the state has had to rely on insurers to provide coverage. If wildfires do prove to be disastrous this year, insurers may be wary of providing coverage to the state in the future. These policies may become significantly more expensive for Oregon, as well.