Oregon’s insurance commissioner says lawmakers have put into place new safeguards for property owners and disclosure requirements for insurance companies as natural disasters become more common in an era of climate change.

But Andrew Stolfi also had a blunt message, particularly for Central and Southern Oregon residents whose homes and businesses are in the so-called urban-wildland interface near Bend and the Rogue Valley:

“If you are in a high-risk area, you will pay more.”

Stolfi spoke at a luncheon of the Salem City Club. His formal title is director of the Oregon Consumer and Business Services Department, which Gov. Kate Brown named him to in April 2020. Voters in the other West Coast states, California and Washington, elect their insurance commissioners. Stolfi’s agency includes the Oregon Occupational Safety and Health Division, which has developed rules for protection of workers outside and inside during heat spells.

In the aftermath of Oregon’s 2020 Labor Day wildfires, which resulted in an estimated $2 billion in damages, lawmakers passed bills in the 2021 and 2023 sessions.

The latest legislation, Senate Bill 82, specifies that insurance companies cannot use mapping of wildfire-prone areas by Oregon State University and the Oregon Department of Forestry — required by a 2021 law — as a basis for cancellation or nonrenewal of coverage or increased premium rates. The bill, which takes effect Jan. 1, passed the Senate, 25-4, and the House, 36-20.

After the mapping began in 2021 with five zones — ranging from no risk to extreme risk — Stolfi said more than 200,000 property owners got notices from the state and insurance companies.

“At the same time they were getting notices about a (state) program they never heard of, they were getting letters from their insurance companies saying they were not going to renew their policies,” Stolfi said.

“But it should not come as a surprise that these large wildfire-related losses we have seen across the West have influenced insurers’ decision-making.”

For decades before 2020, he said, losses resulting from all natural disasters in Oregon were well under $1 billion per decade. But just a few years into this decade excluding this year, he said, losses resulting from wildfires alone have topped $3 billion, $2 billion of which were linked to the 2020 Labor Day wildfires.

Stolfi said the new legislation will require insurance companies to be more specific about why a property is at higher risk and what an owner can do to reduce or mitigate that risk. The steps involve creating defensible space around structures, making houses and landscapes more resistant to wildfires, and boosting fire-suppression capabilities and other defensive measures by communities to respond to wildfires. The legislation, however, is not a state mandate for such requirements.

“Focusing on those three factors is going to be the key to controlling and responding to the changes in insurance on a long-term basis,” he said.

Lawmakers also provided more flexibility in deadlines for property owners to begin reconstruction of fire-damaged structures. It had been one year, but some insurance companies extended it by a second year after the 2020 Labor Day fires, and lawmakers changed it to two years. Stolfi said the law was changed again after shortages in construction labor and materials arose in the aftermath of the 2020 wildfires.

“These requirements were designed to help property owners understand what is going on,” he said. “This law does not require insurance companies to assign a specific value or discount” to defensive measures.

Stolfi said Oregon is not alone in an upward trend of losses from wildfires and other disasters.

Between 1980 and 2022, the annual number of billion-dollar disasters averaged 7.9 in the United States. But Stolfi said in each of eight consecutive years including 2022, at least 10 such disasters occurred annually.

Specific to wildfires, he said, the National Interagency Fire Center based in Boise, Idaho, has reported that all of the 10 years with the greatest amount of acreage burned have occurred since 2004.

According to a separate accounting by the National Oceanic and Atmospheric Administration, Stolfi said that of the 20 disasters that each cost more than $1 billion in damage between 1980 and 2021, 16 of them have been since 2000. The costliest disaster in 2018, and the worst in terms of insured losses, was the Camp Fire that destroyed the community of Paradise in Northern California. Total damages amounted to $16.5 billion, with insurers paying out $12.5 billion.

More than half (52%) of Oregon is in public ownership overseen by the federal government.

Though the federal government is beginning to grapple with the implications of climate change on increased natural disasters and resulting property losses, Stolfi said, “we do not control how they are mitigating risk.”