As wildfires worsen across the Western United States, homeowners are facing another threat: being dropped by their insurance providers.
As Oregon Public Broadcasting reported in late March, two state lawmakers — a Democrat and a Republican — are demanding that major insurance companies pause use of internal wildfire risk maps to deny or cancel policies.
What's happening?
Senators Anthony Broadman and Mike McLane sent a joint letter to State Farm, Allstate, Liberty Mutual, and other major insurers, making a bipartisan request that the companies stop using their own private wildfire risk maps to drop homeowners' policies, at least until January 2026.
"Constituents contact us with increasing frequency to say that they have been 'dropped' or not renewed by one of you," the senators wrote, according to OPB.
The lawmakers, who described this system as "rigged," say these decisions are often based on data gathered by companies like Verisk. Verisk uses drones to assess risk from above, rather than on-the-ground assessments.
Some states are now considering restrictions on insurers' use of drone footage to make policy decisions. Delaware recently established some new regulations regarding the practice, the Delaware News Journal reported last month.
Meanwhile, a committee of Oregon lawmakers from both major parties unanimously endorsed Senate Bill 83, which would repeal the state's official wildfire hazard map, according to local news outlet KGW. Critics say the map fails to accurately reflect individual risk and even has the potential to devalue property.
Why are drops in coverage concerning?
As dirty energy sources are burned and trap heat in our atmosphere, rising global temperatures are fueling more frequent and more destructive wildfires, floods, and hurricanes. In response, some insurance companies are cutting coverage, especially in high-risk areas.
But in Oregon, insurers have still managed to turn a profit. In 2023, companies paid out just 52 cents in claims for every dollar collected in premiums, even as rates rose by nearly 11% over the previous year, according to the Consumer Federation of America.
Broadman and McLane argue that using undisclosed, private risk models rather than transparent and standardized ones leaves policyholders in the dark and at risk of losing critical coverage with little warning. In the event of a disaster, homeowners often rely on insurance to help them navigate property loss and financial hardship while rebuilding their lives.
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Definitely 💯 "This isn't about denying insurers the ability to assess risk — it's about making sure that assessment is based on actual, individualized data, not abstract scoring models," McLane said in the press release announcing the joint letter. "We need to maintain access to affordable insurance for rural and fire-prone communities while promoting a competitive and responsible market."
This kind of corporate behavior fits into a broader pattern: power structures and business practices that ignore the role of burning dirty energy sources in driving extreme weather, while shifting the consequences onto consumers.
What's being done about it?
Climate advocates are calling for stronger oversight of the insurance industry and more transparency around risk data. Meanwhile, SB 83, which would officially scrap Oregon's map, has been passed by the Senate as of late April and now heads to the House, per the Statesman Journal.
Next, according to April reporting from OPB, state lawmakers and advocates say they need to find new funding strategies to pay for wildfire prevention and risk mitigation after federal cuts that have impacted much of the country.
Groups like Firewise USA and the Insurance Information Institute offer tools to help homeowners reduce wildfire risk and advocate for fair coverage.
Nationally, legislation like the Wildfire Defense Act and efforts to reform the insurance market could offer longer-term solutions. But until insurance practices are reined in, experts warn that more homeowners may be left without a real safety net.
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