Oregon Homeowners Insurance Sees Significant Premium Rises Amid Wildfire Losses
Since 2020, Oregon's insurance market has experienced significant financial strain due to escalating losses from large wildfires. These catastrophic events have triggered insurers to raise homeowners insurance premiums substantially, with some Lane County residents facing increases close to 50%. The surge in wildfire activity includes the destructive 2020 Labor Day Weekend fires, notably the Holiday Farm Fire, which alone destroyed over 500 homes in rural Lane County. Oregon insurers have paid out $4 billion in natural disaster claims since 2020, quadruple the previous four decades, with three-quarters of these costs arising from wildfires.
The spike in losses has compelled insurers to increase premiums broadly, affecting homeowners across both high-risk wildfire zones and urban areas, thereby spreading the risk costs across various properties. In Eugene and Springfield, the average annual homeowners insurance premium stands around $1,285, reflecting an increase of nearly 30% since 2020. This trend presents challenges for housing affordability, particularly for buyers looking at homes outside city limits in higher-risk wildfire areas where fire services and infrastructure are limited.
Insurance agents note that homes in more remote locations such as near Lorane Highway and along the McKenzie River face greater premium hikes due to decreased fire protection services, older housing stock, and lack of hydrants. These elevated insurance costs can lead to longer times on the market for homes in fire-prone zones; data from Lane County shows that properties along McKenzie Highway and in the Mohawk Valley are selling significantly more slowly than those within city limits.
Some Oregon counties like Jackson and Deschutes have seen insurers withdraw entirely from the market due to wildfire-related risks. This has increased reliance on the Oregon Fair Access to Insurance Requirements (FAIR) Plan, a state-managed program offering coverage to homeowners unable to obtain commercial policies. Enrollment in FAIR plans statewide has increased nearly 50% since 2022, indicating a tightening market; however, Lane County has relatively fewer FAIR plan enrollees compared to some other counties.
Insurers are adopting more granular risk assessment methods, using property-specific factors such as vegetation density, terrain slope, and fire department accessibility to determine premiums. For example, Farmers Insurance assigns wildfire risk scores to properties to calibrate coverage costs; a lower score can mitigate premium increases. This analytic approach aims to more accurately reflect wildfire exposure and support risk-based pricing amid growing wildfire trends.
The ongoing wildfire season's scale presents continued uncertainty for Oregon's insurance market. The record 1.9 million acres burned last year illustrates the increasing insurance risks tied to wildfire frequency and intensity. Insurers continue to refine strategies for risk assessment and premium adjustment to balance financial sustainability with coverage availability.
This evolving wildfire risk landscape adds complexity to underwriting, regulatory oversight, and market dynamics for Oregon homeowners insurance. Understanding these changes is critical for insurers, regulators, real estate professionals, and policyholders managing wildfire-related exposures and insurance costs.