The State of Oregon picked up an unusual insurance policy from Lloyd’s of London 50 years ago. For the last decade or so it has made the Beaver State the envy of other states impacted by wildfire.
That’s because the policy has helped offset the huge costs of fighting wildfire. In fact, Oregon is the only state in the nation with such a policy. Over the last decade — by itself — the policy has paid out twice as much in claims costs than the cost of the premiums.
With the policy set to expire, Lloyd’s of London has left the cost of premiums the same. What it did was increase the deductible this year to $75 million. The Oregon Legislature’s fiscal analyst, Matt Stayner told Oregon’s Legislature Emergency Board that between dollar one and $75 million, Oregon is on the hook for all wildfire fighting costs.
“The increased (deductible) greatly reduces the probability of a claim, but does not preclude it,” he told the board while noting that in 2013 the total spent on firefighting in Oregon was $75 million.
However, canceling the policy — Stayner said — might not be a good idea since it will be very difficult to pick up a new on to replace the canceled policy.
Dan Rayfield is the Speaker of the Oregon House and is one of the members of the emergency board. While undecided about renewing in the future, Rayfield voted to renew the policy this year.
“The game that we’re playing, just frankly, should be probably looked at next year as we decide whether this is the right path that we should go down,” he said.
Source link: OPB — https://bit.ly/3zzFrTB
Oregon State, Lloyd’s of London & Wildfire Insurance
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