STATE
8A — THE OBSERVER
THURSDAY, APRIL 22, 2021
Lloyd’s of London could once again pay for Oregon wildfi re costs
By GARY A. WARNER
Oregon Capital Bureau
ONLINE
SALEM — With the
prospect of a catastrophic
2021 fi re season looming,
Oregon will rely again on
its one-of-a-kind $25 mil-
lion wildfi re risk policy
with the world’s oldest con-
tinually active insurance
marketplace.
Lloyd’s of London,
which traces its roots to a
17th century coff eehouse
near the Tower of London,
has insured the Oregon
Department of Forestry
against wildfi re losses since
1973. No other state has
wildfi re insurance.
“It’s a catastrophic fi re-
fi ghting expense policy,”
said ODF spokesman Jim
Gersbach.
Oregon’s trees are
among Lloyd’s one-of-a-
kind insurance policies that
have included 1940s actress
Betty Grable’s legs, come-
dian Jimmy Durante’s out-
sized nose, rock star Bruce
Springsteen’s voice, Rolling
Stones guitarist Keith Rich-
ards’ hands, and crooner
Tom Jones’ chest hair.
The plan will pay up
to $25 million of wild-
fi re costs in Oregon. Under
the policy, Oregon covers
the fi rst $50 million in fi re
costs, then Lloyd’s pays the
next $25 million.
Anything above that
level is paid for by the state.
When costs get that high,
federal disaster money usu-
ally pays for a large share of
the costs.
The worst wildfi res in
the state’s history swept
down out of the west Cas-
cades slopes into the Willa-
mette Valley over the 2020
Labor Day weekend. The
16 major fi res burned 1 mil-
lion acres, destroyed more
than 4,000 homes and other
structures, caused 40,000
people to be evacuated, and
killed 11 people.
By the third week of
September, the North-
west Interagency Coordi-
nation Center, a logistical
center for regional wildfi re
response, estimated Ore-
gon’s fi res would cost $53
million, which put the state
and Lloyd’s on alert that a
For a longer version of this story,
as well as more state news, go to
lagrandeobserver.com.
Oregon
to allow
indoor,
full-contact
sports
Associated Press
PORTLAND — State
offi cials say despite a fourth
surge and rising num-
bers of patients hospital-
ized because of COVID-19,
Oregon Gov. Kate Brown
will ease restrictions by
allowing “indoor full-con-
tact sports” to restart by the
end of the week.
The Oregonian/Ore-
gonLive reports the gover-
nor’s offi ce and the Oregon
Health Authority said the
move is in recognition of
“the importance of athletics
for the physical and mental
health of Oregon’s youth
athletes,” although the loos-
ened restrictions also apply
to adults.
Low-contact indoor
sports already were per-
mitted, but the new rules
for the fi rst time since last
spring will allow Orego-
nians of all ages to engage
in indoor basketball, cheer-
leading, wrestling and
water polo, among other
sports.
Over the past month,
new daily cases have
increased about 150%,
including 55% in the past
two weeks.
That’s faster than the
national average, with new
cases rising in the United
States 4% in the past two
weeks.
The number of hospi-
talized patients in Oregon
also has jumped from 106
people a month ago to 255
Tuesday, a 140% increase.
In the past two weeks, Ore-
gon’s number of COVID-19
patients have grown by
49%, compared with the
national average of 10%.
Inciweb/Contributed Photo
Downed power lines have been identifi ed as the cause of 13 fi res in the
Santiam Canyon during 2020. With the prospect of a catastrophic 2021
fi re season looming, Oregon will rely again on its one-of-a-kind $25 mil-
lion wildfi re risk policy with the world’s oldest continually active insur-
ance marketplace.
claim might be fi led.
The fi nal cost of the
Oregon wildfi res to the
Oregon Department of For-
estry was about $130 mil-
lion. The bill was off set by
more than $70 million in
federal disaster aid, along
with fees the state earned
for fi ghting fi res on land it
did not control and reim-
bursement for other aid.
“The cost for sup-
pressing the 2020 wildfi res
is estimated at just under
$50 million, which is why it
did not trigger the policy,”
Gersbach said.
The current policy runs
through April 15, 2022.
Lloyd’s of London accounts
for 90% of the policy cost,
while Nashville-based
Acceptance Insurance car-
ried 10%.
The Legislature will vote
on a portion of the premium
in the Oregon Department
of Forestry budget, which is
now before the Joint Ways
& Means Committee.
When Lloyd’s of London
and the state negotiated
a renewal of the policy, it
included a relatively modest
3% premium increase to
$4,131,871 per year. The
cost is split between the
state and private timberland
owners. Landowners pay
their share through a prop-
erty tax formula.
The Oregon Department
of Forestry, which holds
the insurance contract for
the state, says the policy
has saved the state mil-
lions over the years. The
agency is responsible for
about 16 million acres of
forested land — about half
the total in the state.
ODF is also the key fi re-
fi ghting agency on 2.3 mil-
lion acres controlled by
the U.S. Bureau of Land
Management.
“This helps the agency
keep fi res from spreading to
other ODF-protected lands,
minimizing overall cost
and potential loss,” Gers-
bach said. “If a fi re on BLM
land escapes initial attack,
BLM is no longer eligible
to receive large fi re cost
reimbursement.”
In those cases, BLM
must reimburse the state for
ODF’s fi refi ghting costs.
Reimbursements for the
2020 fi res are one of the
reasons the overall costs to
ODF fell below the min-
imum level for the Lloyd’s
policy to be activated.
Gersbach said during
the 48-year relationship
with Lloyd’s, the state has
received $99 million in
claims payments against
$75 million in premiums
it paid. The most recent
claims ODF made were for
$25 million in 2013 and
$23.2 million in 2014.
The consecutive years
of claims led Lloyd’s to
nearly double the premium
from $2 million to $3.75
million. The deductible
rose from $20 million to
$50 million, while Lloyd’s
maintained a cap on its
payout to $25 million.
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