This year’s destructive wildfire season will land the state of Oregon a $25 million payout as part of its unique deal with an English insurance market.
Joy Krawczyk, public affairs manager of the Oregon Department of Forestry (ODF), said on Monday that the department estimates the gross costs of the state’s wildfires stand at more than $100 million.
The state will be looking at an estimated net cost of around $50 million after recoveries from FEMA and other government agencies, Krawczyk said.
This total would be enough to activate Oregon’s insurance policy with Lloyd’s of London, a body established in 1871 which manages a market underwritten by 90 members including corporations, investment funds, individuals, and entities such as the ODF.
Oregon’s decades-old insurance policy with Lloyd’s dates back to 1973.
Under the policy, Oregon will pay the first $50 million in costs out of pocket while Lloyd’s will pay $25 million on top of that. Any other expenses must be covered by the state or federal government.
Oregon’s current contract with Lloyd’s includes a $3.75 million premium it splits between the state and private woodland owners who pay their share via property taxes. That deal ends on April 15, 2021.
The Trump administration issued the state a major disaster declaration granting it access to long-term financial relief programs paying for things like infrastructure and housing.
Oregon has spent more than $1.5 billion on wildfires since 2000. In 2014, it spent around $183 million fighting blazes alone.
A 2019 report release by Gov. Kate Brown’s office said wildfires could cost as much as $10 billion in the next 20 years.
The state is currently looking at a $1.2 billion deficit for 2020 which Oregon lawmakers attempted to correct with a round of budget cuts in August.
Brown has since enacted a line item veto to those cuts to defend fire fighting and state police resources.
In 2019, Lloyd’s reported a $2.9 billion profit. Lloyd’s of London Chairman Bruce Carnegie-Brown said it expects to pay out an estimated $6.5 billion due to the COVID-19 pandemic in 2020.
The Northwest Coordination Group reported on Monday that 14 major wildfires are still burning in the state.
More than a millions of acres have burned throughout the state along with thousands of buildings statewide.
More than 3,000 Oregonians are now housed in American Red Cross and state-run shelters, officials from the Oregon Office of Emergency Management reported last week.
Air quality in western Oregon and western Washington largely returned to “Good” following rainfall over the weekend after more than 11 days in the “Hazardous” range, according to the AirNow Index.
Since it began on September 8, the Holiday Farm Fire in Lane County has burned 173,000 acres and was 17% contained on Monday, the NWCP reported.
In Clackamas County, the Riverside Fire has grown to 137,000 acres, is 25% contained.
Beachie Creek and Lionshead Fires that make up the Santiam Fire were 38% and 13% contained on Monday after growing to nearly 400,000 acres combined since August, according to NWCP data.
Brown called on Oregon lawmakers earlier this year to set aside $200 million for forest and firefighting resources. The proposal died following a walkout by state Republicans over a carbon tax proposal in February.
