Bach Talk – Oregon enacts pro-policyholder wildfire claim reforms

We’re proud to report that UP recently helped enact H.B. 3272, a new Oregon law that will improve the flow of insurance funds for replacing wildfire-destroyed homes and property. UP has long advocated that on total loss claims where the homeowner did nothing to cause the event that destroyed the home, there should be fewer claim hoops to jump through. We have also long advocated that insurers need to do a better job at accurately estimating the replacement cost of the dwellings they insure.  The new law makes improvements on both those fronts.

Rep. Marsh (House Dist. 5) introduced the legislation after hearing from frustrated and underinsured constituents whose homes were lost in 2020 wildfires, then shepherded it to the Governor’s desk where it was signed into law on June 14th, 2021. UP testified twice in support of the bill and conferred with the author on amendments (see photo).

The new law gives people more time and flexibility in accessing their home insurance benefits after a catastrophic loss, a better chance of being adequately insured, and the ability to buy a replacement home without leaving money on the table. 

Highlights include:

  • Additional/temporary living expense) and Replacement cost benefits must be available for at least 24 months, 36 months if reasonably necessary.
  • An underinsured homeowner can use “Other Structures” benefits toward the cost of rebuilding their dwelling. Other Structures benefits are normally available for garages and outbuildings, retaining walls, etc.
  • A homeowner can opt to skip the challenges (and trauma) of rebuilding their home from the ground up at its original location and instead access their dwelling, extended dwelling and building code and ordinance benefits toward the purchase of a replacement home.
  • Every other year, the homeowner can access their insurer’s expertise on construction costs and obtain an estimate for insuring their home to its current replacement cost.

Read the full bill language here:

While some insurers give flexibility to their customers post-disaster, others continue to strictly enforce rules that prematurely cut off  “loss of use” (temporary rent) benefits and withhold funds from those who want to buy a replacement home instead of going through the arduous process of rebuilding.

Although technically the new law only applies to future claims, we hope insurance companies will abide by provisions in connection with 2020 wildfire claims.

Through the virtual workshops and pro bono legal clinics we are offering through our Roadmap to Recovery™ program in Oregon, United Policyholders has been partnering with Rep. Marsh and her staff to help the 2,000+ households in her district that were impacted by 2020 wildfires. These households are struggling with delayed payouts, insurance limits that are far below their home’s current replacement cost, and unrealistically short deadlines for replacing destroyed property.

Thank you Rep. Marsh, Oregon legislators and Governor Brown for recognizing that improving the flow of insurance dollars in the aftermath of disasters benefits victims, lenders and communities, and helps maintain people’s faith in the value of insurance.