Oregon Senate Bill 82 (2023) Relating to homeowner insurance for wildfire risk

The Oregon legislature passed Senate Bill 82 on April 25, 2023, which introduced new requirements for homeowner insurance providers regarding wildfire risk and wildfire risk mitigation. The bill weaves strategies for wildfire risk mitigation into insurance exchanges by requiring insurance companies to disclose the basis for wildfire-related insurance coverage or rate changes and identify potential strategies that would increase a property’s wildfire resilience where possible. 

Wildfire risk and risk mitigation strategy drew increased focus in the Oregon legislature after the 2020 Labor Day fires, which affected approximately 4,000 structures. Public concern stemmed not only from increasing risk of wildfires, but also how insurers would respond to that increasing risk. SB 82 seeks to address these concerns by increasing insurer transparency around decisions based on wildfire risk while also requiring insurance companies to share with consumers wildfire resilience strategies that could positively impact their coverage and premiums.

Under SB 82, whenever an insurer cancels a premium, decides not to renew, or increases a premium for a reason “materially related to wildfire risk,” the insurer must send the insured a notice detailing several aspects of the decision. The notice must identify specific aspects of the property that led to the wildfire risk concern, explain how the insurer determined and evaluated any wildfire risk score or classifications used, and, if available, include any wildfire risk mitigation actions the insured could pursue to abate the wildfire risk and improve the insurability of the property. The bill defines “wildfire risk mitigation action” as either a property-level or community-level action which reduces wildfire risk to the property. Property-level actions include measures such as establishing defensible space and hardening buildings, while community-level actions could involve receiving recognition from entities like Firewise USA.

While insurers can make coverage and rate decisions based on wildfire risk so long as the disclosure guidelines stated above are followed, SB 82 prohibits insurers from using state-published maps of wildfire risk or exposure as the basis for changes in coverage or rates (such as the map mandated by Oregon SB 762).

SB 82 further requires insurers offering homeowner insurance to publicly disclose on their websites how wildfire risk mitigation actions may factor into underwriting and rate setting. This allows public visibility into how property or community-level wildfire resiliency efforts could positively impact coverage and rates. The bill also provides additional time to rebuild for insured parties who experience property damage as a result of a fire that was subject to an order under the state’s Emergency Conflagration Act, which the governor may invoke to direct additional resources to a wildfire. 

SB 82 created new provisions in the Oregon Revised Statutes, which are codified in Chapter 742: Insurance Policies Generally; Property and Casualty Policies (ORS 742.277–278). SB 82 also amended existing sections of the code related to rebuilding insured property (ORS 742.270) and rate making (ORS 737.310).

Publication Date: April 25, 2023

Related Organizations:

  • State of Oregon

Related Resources:

Sectors:

Resource Category:

Resource Types:

  • Laws

States Affected:

Impacts:

  • Wildfires

Go To Resource