Oregon may lose its wildfire insurance policy

Published 11:32 am Monday, March 23, 2015

SALEM — Lawmakers working on the next two-year budget say that one of the major challenges they face is how to pay for firefighting costs.

They’re worried a company that has previously sold the state an insurance policy to help cover firefighting costs will either refuse to issue such a policy this year, or the deductible will be so high that it longer makes sense for the state to purchase insurance.

Oregon usually purchases a policy from Lloyd’s, the London insurance company, to help cover firefighting costs; the state uses its tax-supported general fund and landowner contributions to cover the remaining firefighting costs not paid for by the federal government.

“The other wild card that hasn’t really come up in discussion much is fire season costs,” said Rep. Peter Buckley, D-Ashland, co-chair of the Joint Ways and Means Committee.

“It is unlikely we will receive the same sort of fire insurance coverage we have received in the past from Lloyd’s of London,” he said. “They will either want lot more money up front for the policy, or they will place it in such a way our deductible is so high that it’s not going to make financial sense for us to continue. So that’s a significant challenge in the tens of millions of dollars we have to be aware of for fire seasons going forward as part of the budget.”

Sen. Fred Girod, R-Lyons, said Lloyd’s initial offer would have provided only $19 million in coverage to the state after Oregon put up more than twice that amount in deductibles and payouts — a deal he says would not be worth it.

Girod, who is on the budget committee, says negotiations are continuing.

This story first appeared in the Oregon Capital Insider newsletter. To subscribe, go to oregoncapitalinsider.com