Relating to fire insurance that covers properties at particular risk of wildfires; prescribing an effective date.
Summary
SB 340 would change Oregon’s fire insurance laws to limit how much insurers can raise premiums and when they can cancel policies for certain higher-risk properties. The bill applies to fire insurance covering property in the wildland-urban interface, as well as property used in farming or resource extraction as the insured’s primary employment or economic/business activity. For those policies, an insurer could not increase premiums by more than 3 percent per year, subject to specified exceptions, and could not cancel the policy except in limited circumstances tied to a large prior claim or, in one provision, the insurer’s broader claims experience in the area.
The bill also directs the Department of Consumer and Business Services to adopt rules defining how to measure whether an insured’s employment or business activity qualifies for these protections. The amendments would apply to insurance contracts issued or renewed on or after January 1, 2026, and the act would take effect 91 days after adjournment sine die. In practical terms, SB 340 would add consumer protections for policyholders in wildfire-prone areas and for certain agricultural and resource-based businesses, while constraining insurer underwriting and cancellation practices in those categories.
Impact
SB 340 amends ORS 737.310 and ORS 742.224, creating new statutory limits on fire insurance rate increases and cancellations for covered properties. It would prohibit premium increases above 3 percent annually for qualifying policies and restrict cancellations for insured properties in the wildland-urban interface or tied to farming/resource extraction, while preserving specified exceptions. The bill also requires rulemaking by the Department of Consumer and Business Services to implement the employment/activity qualification standard, and it applies prospectively to policies issued or renewed on or after the operative date.
Sentiment
No committee transcripts or recorded votes were provided, so there is no direct evidence of legislative debate or formal support/opposition in the available materials. Based on the bill text alone, the measure appears consumer-protection oriented, aimed at stabilizing coverage for policyholders facing wildfire-related insurance pressures. The structure of the bill suggests an effort to balance policyholder protections with insurer exceptions and administrative rulemaking.
Contention
The main likely point of contention is the bill’s restriction on insurer pricing and cancellation authority, especially for properties in wildfire-prone areas and for insurers managing concentrated catastrophe risk. Insurers may view the 3 percent cap and cancellation limits as constraining actuarial pricing and underwriting flexibility, while supporters would likely argue the bill is needed to preserve access and affordability of fire insurance for rural, agricultural, and wildland-urban interface property owners. Another possible issue is the ambiguity around how to determine whether an insured’s farming or resource extraction activity qualifies, which the bill leaves to agency rulemaking.