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The increase in large wildfires since 2020 has saddled insurers with billions of dollars in losses across the Oregon market. The losses have prompted adjustments to their coverage rates that have left some Lane County residents with nearly 50 percent premium hikes.
Kerry Silvey has come to expect small increases in the cost of her homeowners insurance policy each year.
Silvey and her husband have lived on acreage near Spencer Butte, south of Eugene city limits, for the past dozen years. With the number and intensity of wildfires surging in recent years, she knew her house could be at a greater risk than homes within the city.
But Silvey still felt sticker shock when she opened her new home insurance policy last year. Farmers Insurance, which covers her house, said it was raising the cost of her policy by 44 percent over the previous year.
“We’re fortunate that we’re in the financial situation that we can afford it,” Silvey said.
Rising premiums, driven by insurers’ reluctance to cover homes in wildfire-prone areas, are adding another wrinkle to Lane County’s housing affordability crisis. The average premiums for Oregon homeowners insurance rose nearly 30 percent between 2020 — the year Labor Day Weekend fires burned more than 4,000 houses across the state — and 2023, according to the Oregon Department of Business and Consumer Services.
The 2020 fires included the Holiday Farm Fire, which destroyed more than 500 houses in Vida, Blue River and other rural Lane County communities along the McKenzie River east of Springfield. All told, insurers operating in Oregon have paid out $4 billion in natural disaster-related insurance claims since 2020, more than quadruple the amount they had paid out in the previous 40 years combined. Three-fourths of those losses have been due to wildfires.
That’s leading many insurers to recoup those losses in Oregon and across the western United States by raising premiums on everyone, not just homeowners in the forests and hillsides that are considered at higher risk of burning in a wildfire.
Eugene and Springfield homeowners paid around $1,285 on average for a policy last year, or $107 per month, according to a NerdWallet analysis of commercial plans available in the Oregon marketplace.
“A few years ago, I might estimate that the average home insurance plan cost $50 to $60 a month. Now I’m accounting for it at $75 to $100 a month,” said Casey Lown, owner of Strategic Mortgage Solutions in Eugene. “No doubt these insurance companies are exporting some of that cost burden onto other properties they insure.”
Outside city limits
Yet that burden isn’t spread out evenly. Most of Lown’s clients are looking for houses within Eugene or Springfield city limits. It’s the prospective buyers looking for cheaper housing outside the city limits, where houses are typically older and less fire resilient, that may face the biggest premium hikes.
“South of (Eugene), when you start getting to Lorane Highway, you’re no longer near fire services,” said Andrew Core, an agent with Farmers Insurance in Eugene. “It’s the same thing east of Springfield. Once you’re outside the city boundary you have the same issue, where there are fire departments up and down the McKenzie, but they’re small and they may not be staffed full time. And most homeowners there don’t have fire hydrants within 1,000 feet.”
The prospect of higher insurance premiums may be keeping some houses for sale on the market longer, especially in those areas where insurance companies see higher risk.
According to data from Lane County’s Regional Multiple Listing Service, the average house that sold in the first half of the year was on the market for 59 days before closing. That figure doesn’t include Florence.
But along McKenzie Highway, houses took an average of 98 days to sell. And in the Mohawk Valley northeast of Springfield — the entirety of which was under a “Be Ready” evacuation warning during the Holiday Farm Fire — houses are taking 105 days to sell.
A statewide issue
Communities in some other parts of the state are in far worse shape. Several insurers have stopped offering policies altogether in places like Jackson and Deschutes counties. The number of homeowners receiving coverage through the Oregon Fair Access to Insurance Requirements plan, a state-backed insurance policy for homeowners who can’t access commercial policies, has risen nearly 50 percent since 2022, totaling nearly 2,700 homeowners this year.
FAIR plans are more expensive than commercial insurance, and don’t fully cover a home in the case of a total loss. But fewer than 150 FAIR Plan enrollees are Lane County residents, according to data from the Oregon FAIR Plan Association. By contrast, nearly 300 Jackson County residents are enrolled. Douglas County has 170 homeowners enrolled, despite having less than one third of Lane County’s population.
Still, another fire season like 2020 could spark more premium hikes, no matter which parts of the state suffer the most damage. Last year, wildfires burned a record 1.9 million acres across Oregon.
“Even the increased risk of wildfire in Oregon is surpassing what it’s ever been, especially in the eyes of insurance companies who are trying to figure out how to gauge this risk,” Core said.
Silvey, the Spencer Butte area homeowner, feels lucky: Her 44 percent premium increase came with a detailed explanation from Farmers Insurance about how it calculated her rate.
The company created a score for her property based on three factors: the amount and types of vegetation on her property that could fuel a wildfire’s growth, the slope of the property, and the ease or difficulty for firefighters to access it in case of a fire.
Silvey’s property scored a three on a scale of zero to 30, with lower scores resulting in lower insurance premiums. And this year, her premiums rose by just 2 percent.
“If we’d ended up on the high end, our insurance could have been way, way more than it is,” she said.
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