Reinsurance companies pull out of S. Deschutes County due to fire risk; homeowners hit by insurance premium hikes
'If you are the zip code that gets hit, it's going to cost us too much money'
BEND, Ore. (KTVZ) -- Local insurance companies are on a "total lockdown" due to a 3-year-long fire loss on manufactured homes, La Pine Farmers Insurance Agent Karen Brannon says. The consistent loss has made insurance companies not profitable.
Southern Deschutes County is feeling it the most, as a majority of homes are manufactured homes. One La Pine resident told NewsChannel 21 his insurance premium rate recently jumped 42.5%.
Factors like fire risk and the type of area affect these rates, but Brannon says there's much more.
For Farmers Insurance, they were told by their reinsurance company that they had too big of a footprint of manufactured homes in La Pine.
Reinsurance companies financially protect companies like Farmers Insurance and handle larger risks like natural disasters.
"There aren't any carriers that will write something over 25 years old with replace," Brannon said Friday. "My cost and replacement cost means if it burns down, you get a new one. Banks won't loan unless there's a replacement cost."
If the hotter climate and fire risk doesn't ease up, prices could increase even more.
"It will probably peak at 40%. If we have a big loss in property, like we have the past few years, then it wont." she warned.
Insurance troubles on the West Coast are not new. Sate Farm earlier this year stopped accepting new applications for California property and casualty coverage, noting soaring wildfire and construction costs and a challenging reinsurance market. Allstate also said it stopped selling new home insurance properties last year, and similar 40% rate hikes are happening there.
The problems also mean major insurance companies have pulled out of Florida, leaving homeowners paying premiums nearly four times what others around the country are paying. Everything from climate change to hurricanes and inflation are factors.
