Lloyd’s of London has now offered Oregon wildfire insurance coverage of up to $25 million for the upcoming season, but it will involve a greater expense than in previous years and the deductible will be notably higher.
For instance, the coverage that will be provided will kick in only after the state has paid a $50 million deductible.
After that deductible has been paid, the wildfire insurance coverage being provided by Lloyd’s of London would cover only an additional $25 million. This most expensive policy is a direct reflection of the rough seasons that the state has seen over the last while, particularly in 2014. Last year, the Oregon Department of Forestry and private landowners faced a deductible of $20 million. After raging fires plagued the state, that deductible has almost doubled and the premiums that they will need to pay have almost doubled, as well, from last year’s $2 million to this year’s $3.75 million.
The state must decide whether or not it wants to take on this wildfire insurance within the next two weeks.
Oregon has been purchasing firefighting insurance for about forty years and it remains the only state in the country that buys this type of coverage. In 2014, Oregon faced a bill for $75.6 million in order to combat massive wildfires. The ongoing droughts throughout the western states have meant that this has been an increasing trend over the last several years. As this seems to be continuing for 2015, it is believed that the upcoming season will be another costly one.
Droughts, combined with the hotter and longer summers resulting from climate change, have meant that the length of time that wildfires are a risk has also been extended.
The Oregon Land Protection Fund administrator, Tim Keith, has explained that the landowners and the department are worried about the rising costs, but at the same time, they know that the coverage provides them with an improved opportunity to be able to obtain wildfire insurance coverage again in the future.
