The Pinehurst Inn sits above Jenny Creek on a sharp bend of Highway 66 in southeast Jackson County. With its rustic log posts, generous wraparound porch, and tidy planter beds, the two-story home is a landmark at the eastern edge of the rural mountain community called the Greensprings.
Don and Denise Rowlett have called the Pinehurst Inn home since 2008. For several years they ran the inn as a business; now the six-bedroom dwelling serves as a private residence for the couple and their family.
The 23-acre parcel abuts public land and private timberland on three sides. Built in 1895 and extensively renovated in 1987, the property has always been difficult to insure. This spring, the Rowletts received a letter from their insurance company.
鈥淚t basically said they would keep us insured until the end of the month then we were on our own after that,鈥� says Don Rowlett.
After receiving the notice, Don called Russ Schweikert, their agent and a partner at Ashland Insurance. Schweikert drove up from Ashland, walked the property, and took pictures.
鈥淗e went to bat for us. He talked them into taking us back,鈥� says Rowlett.
The company offered the Rowletts a policy, but their annual premium increased by nearly $2,000.
Since the 2020 Labor Day fires devastated parts of the state, property owners across Southern Oregon have seen their insurance rates go up鈥攐r worse.
鈥淭here鈥檚 an ongoing flow of people who are alarmed because of communications they鈥檝e received from insurance companies whether it鈥檚 increases or a threat to cancel or difficulty finding insurance,鈥� says Representative Pam Marsh, a Democrat who represents southern Jackson County. 鈥淚f you look at the places people live that are adjacent risk areas, those are the places you鈥檙e hearing about.鈥�
Since 2020, the state has seen nearly $3 billion in wildfire-related losses. Companies and residents alike are struggling to adapt to a new era of risk in the face of climate-driven wildfires, and property owners in rural communities are on the front lines.
A national crisis
A New York Times investigation revealed that selling homeowners insurance was unprofitable in 18 states last year, prompting companies to raise premiums, cancel policies, or leave states altogether. Much of the shake-up is being driven by natural disasters related to climate change. In Colorado and other Western states, it鈥檚 wildfires; in Florida, it鈥檚 hurricanes; in Midwestern states like Illinois and Nebraska, it鈥檚 major storms and flooding.
鈥淎s climate change continues, we are just going to see more pressure on the insurance company, which carries the weight of those disasters ultimately,鈥� says Marsh.
The report paints a dire picture of the potential consequences: if people can鈥檛 get their properties insured, they won鈥檛 be able to acquire mortgages. Declining property values could set up a domino effect of lost tax revenues for counties to fund schools and other vital services.
The situation has reached a crisis point in California, where companies like Allstate and Farmers Direct have declined to write new policies or renew existing ones in response to legislation that has made it hard, if not impossible for them to stay profitable.
Insurers operating in California can鈥檛 raise rates more than 10% without embarking on a lengthy review process. They are also prohibited from using so-called 鈥渃atastrophe modeling鈥濃�攎odeled predictions of disasters like wildfires and storms鈥攖o set rates. In response, many of the industry鈥檚 largest companies have simply left.
鈥淭he good news in Oregon is that we鈥檙e not California,鈥� says Schweikert.
Oregon still has a robust home insurance market, with 105 companies operating within the state at the end of 2022.
On top of that, Oregon has strong consumer protection laws. HB 82, passed last year, requires insurance companies to notify property owners when premium increases are related to wildfire risk, and to describe what mitigation actions property owners could take鈥攔emoving trees, for example, or clearing combustibles from around the house鈥� that could result in a discount, incentive, or other premium adjustment.
Insurance companies 诲辞苍鈥檛 have to provide coverage if a homeowner acts on their suggestions, says Andrew Stolfi, Oregon insurance commissioner and director of the Oregon Department of Consumer and Business Services. 鈥淗owever, these new requirements create transparency.鈥� Measures homeowners take could also help them find coverage elsewhere.
鈥淥ur friends to the south would love those choices,鈥� says Schweikert.
Risings premiums, shrinking choices
Historically, Oregon has enjoyed some of the lowest premiums for home insurance in the country. Valkyrie Liles, who lives a mile west of the Rowletts, said her family鈥檚 premium was just $700 in 2015. After increasing slowly but steadily for several years, it shot up from $1,880 to $2,604 in the last year. Another Greensprings neighbor, Matt Worthington, has seen his homeowner鈥檚 premium rise from $2,200 to $4,650 in just two years.
The reasons behind the spike in premiums are complex, says Schweikert. 鈥淚t鈥檚 a conflagration of all these things happening at one time, and it鈥檚 hitting consumer checking accounts like mad.鈥�
Wildfire seasons like 2020 cut deeply into companies鈥� bottom lines. But insurance companies 诲辞苍鈥檛 just rely on selling insurance to make money. They also invest the money from premiums in the stock market or real estate. A strong economy is not a good time to buy stocks, explains Schweikert, and with occupancy rates in commercial buildings still flagging in the wake of the pandemic, it鈥檚 not a good time to invest in such real estate. That means companies must rely more on selling insurance to be profitable. Reinsurance rates鈥攖hat鈥檚 insurance for insurance companies鈥攁re also high right now, says Stolfi, adding that property owners outside of high-risk zones are seeing premium hikes, too.
Liles, like many Oregonians, is shopping around for better rates with a new insurance company鈥攁 trend Schweikert has noted in his office. In the recent past, most clients would stick with the same policy and company, and his team would 鈥渞emarket鈥濃�攐r change companies for鈥攁bout 10% of their accounts. 鈥淚n 2023, we re-marketed about 69% of our clients with the same staff,鈥� he says.
Schweikert himself is not immune to the trends. After the premium on his rental property shot up 86%, he sent a 鈥淲TF鈥� to his own agent. 鈥淪he said, 鈥榃rite the check before they change their mind.鈥欌��
Coverage of last resort
As unpleasant as it may be, a premium hike beats not being able to obtain coverage at all.
鈥淭he higher you get up in the woods in Ashland, the fewer options you have,鈥� says Greg White, who owns Reinholdt and O鈥橦arra Insurance in Ashland. Writing new policies in the Greensprings or off of Dead Indian Memorial Road or old Highway 99, all of which are in Jackson County, is 鈥渘early impossible,鈥� he adds. 鈥淏ased on their wildfire score, insurance companies will say 'No, thank you.'鈥�
Each company has its own way of calculating the wildfire risk. What they 诲辞苍鈥檛 rely on is the Oregon Statewide Wildfire Hazard Map created by Oregon State University, says White. The map is intended to help Oregonians understand the degree of the wildfire hazard for their properties鈥攁nd hopefully, take action to mitigate it鈥攂ut when the map was first released in 2022, many residents associated it with spiking insurance rates and lost coverage.
鈥淎ll of this stuff was happening before the map even came out,鈥� says White. 鈥淭he companies had already made their decisions. It was just poor timing.鈥�
Property owners who can鈥檛 find coverage elsewhere can turn to the FAIR plan, a state-sponsored insurance pool. Oregon is one of the majority of states with this option of last resort. Typically, premiums are higher, and coverage for homeowners is capped at $600,000.
Right now, the number of Oregonians taking advantage of the FAIR plan is 鈥渁stoundingly low,鈥� says Marsh. According to the Oregon FAIR Plan Association, there were 1,698 policies at the end of 2023, up from 1,535 at the end of 2022 and 1,425 at the end of 2021.
鈥淲e are seeing definitely an upward trend in policies being written today, largely driven by the issue of wildfire concerns,鈥� says Steve Steinbeck, Executive Director at the Oregon FAIR Plan Association. 鈥淎 good majority of the standard carriers are pulling out of high-risk wildfire areas, so that鈥檚 driving a lot of the business and growth that we鈥檙e currently seeing.鈥�
County-wide data shows notable jumps in FAIR plan applications and policies between 2022 and 2023 in certain towns, including Ashland, Rogue River, Grants Pass, and Cave Junction.
The cap for homeowner coverage recently increased from $400,000 to $600,000, but that鈥檚 not enough to fully insure many properties, says White, citing as an example a client on Dead Indian Memorial Road east of Ashland with a 鈥渂eautiful property鈥� who had to resort to the FAIR plan.
鈥淗e probably needs $1.5 million just on the structure,鈥� says White. He is advocating for an alternative type of coverage for high-risk wildfire zones, similar to earthquake coverage.
Marsh, whose family used to own and manage the nearby Green Springs Inn, is among the state鈥檚 legislators pushing to expand the FAIR plan鈥檚 coverage.
鈥淭he FAIR plan either needs to cover the basic and special needs of consumers or have a pathway to help people obtain that coverage,鈥� says Marsh.
Accounting for mitigation
In 2014, at the very end of July, lightning sparked a fire in far southeast Jackson County near the Greensprings community. As the Oregon Gulch Fire blew up, residences along Copco Road evacuated. The fire was two miles down the creek from the Pinehurst Inn. Don Rowlett was a volunteer firefighter with the Greensprings Rural Fire District at the time, so while he was off fighting the fire, Denise packed some clothes and a few valuables. Luckily for them, the wind shifted and the fire burned to the east away from the Greensprings.
Oregon Department of Forestry firefighters told Denise Rowlett they would defend her home. 鈥淭hey literally told me they would take a stand here. This was one of the most defensible places on the mountain at the time, and even now,鈥� she says.
This spring, the Rowletts鈥� insurance company gave two main reasons for not wanting to renew their policy: they suspected the couple was operating a business at their residence (they were not) and that the property was 鈥渘ot protected鈥� by a tax-based fire department. The nearest station managed by Jackson County Fire District 5 is 20 miles from the property, but a station operated by the all-volunteer Greensprings department is less than six miles away.
Schweikert sent the insurance company photos showing that the nearest trees are set back substantially from the structure, which satisfied them鈥攆or now.
The Rowletts understand risk mitigation. Their home is surrounded by a gravel parking area on three sides. They are removing oily juniper shrubs from around the house, and they keep the grassy knoll above the home mowed. They also have an impressive fire suppression system, consisting of a fire hose on a reel plumbed to a 5,000-gallon storage tank. The tank is on a hill, so if they lose power, they can rely on gravity.
Marsh and other legislators would like to see property owners rewarded more for actions like these, but she thinks the companies need more validated data about which measures actually reduce risk and vulnerability.
White thinks that nothing will convince companies to write policies in high-risk areas they are avoiding. 鈥淏ig companies that are writing all over the country are not going to change the rules for one house in Southern Oregon in an area where they wouldn鈥檛 write,鈥� he explains.
Stolfi says that actions individual property owners take are important, but 鈥渙nly one key step.鈥� 鈥淚t鈥檚 also important to evaluate how the neighborhood is collectively improving its wildfire risk,鈥� he adds.
Some companies are trying to find a way to give a discount for the Firewise program, where neighbors take collective measures to 鈥渉arden鈥� homes and create defensible space around structures. Such an incentive could prompt more people in high-risk zones to do so.
The state is compiling a list of incentives and discounts offered by every insurer in Oregon, says Stolfi.
Meanwhile, reinsurance costs are starting to level off, as is inflation, he adds. 鈥淚f that continues, that will help dampen premium increases.鈥� But another wildfire season like 2020 could reverse those trends, and then some.
Mitigating risk at all levels, from the homeowner and neighborhoods, in forests around communities, is the best way to make sure Oregonians have the benefit of a competitive insurance market.
鈥淲e can鈥檛 tell insurance companies what to do,鈥� says Marsh, but 鈥淲e can partner with them.鈥�
