Help with home insurance

Understanding homeowners insurance

A home is usually the largest purchase you will make. Protecting this major investment can be important to your family’s financial future.

If you have a mortgage, your lender will require you to have homeowner insurance. If you do not have a mortgage, it is a good idea to protect your investment and buy homeowner insurance.

What it covers

Homeowner insurance pays for damage to your home and other structures on your property. It also may cover:

Damage to or loss to contents of your home
Your liability for accidents that occur on your property or for damage to others’ property
Insurance companies may pay for additional living expenses (hotel, meals, and more) due to fire or other covered events

What it does not cover

Floods: Flood insurance is typically provided through the National Flood Insurance Program. You must buy flood insurance through an agent. Get a referral at 888-379-9531 (toll-free).
Earthquakes: You can buy earthquake as a separate endorsement to your homeowner or renter policy or as a stand-alone policy that is separate from your homeowner policy.
Landslides (earth movement) are not covered. This type of coverage may be difficult to obtain. Talk to an agent.
Cannabis related properties: There may be coverage gaps when insuring cannabis related properties.

Rates, underwriting, and how to find coverage

A number of factors are affecting the affordability and availability of home insurance today. One factor is increased losses due to the growing frequency and intensity of natural disasters. Costly disasters have resulted in insurance companies paying out much more in claims than in previous years. In some cases, they are paying out more in claims than they receive in premium payments. As wildfire seasons become more intense and longer lasting, more buildings burn. For decades, wildfire accounted for just $100 million in claims per year on average nationwide. Since 2020, we have seen nearly $3 billion in wildfire losses in Oregon alone. Many people's premiums have gone up significantly because of wildfire risk.

In addition, overall cost increases, including the price of materials and labor, have resulted in higher expenses to repair and rebuild damaged structures. As labor, lumber, and building material prices increase, so do insurance premiums. Because insurance companies must have enough money to pay claims, they commonly use premium adjustments to do so.

In addition to increasing premiums, insurers are making decisions to reduce their risk exposure by writing fewer policies for homes in disaster-prone areas or homes with maintenance or repair issues that are unaddressed. Each insurance company has the ability to decide how much risk it wants to take on in a certain region or in relation to all risks, including wildfire. This is making it more challenging for consumers to find affordable home or renters insurance.

When you apply for homeowners insurance, your level of risk is evaluated through a process known as underwriting. Each insurer’s underwriting rules for eligibility vary, which means a consumer may be able to find a policy with one insurer when another declines. The rules each insurer uses must be applied consistently and cannot be unfairly discriminatory. State laws recognize that only unfair discrimination is prohibited. By its nature, insurance aims to discriminate by risk types and charge premiums accordingly. Insurers may not offer or renew a policy for many different reasons. These may include a change in risk (for example, a homeowner installing a pool in their backyard), failure to maintain a property, claim history, the location of the home, the availability of fire protection, the type of construction, nonpayment of premiums, fraud, or misrepresentation of information.

Your insurance company will try to predict how much risk your home will take to insure. Your individual premium should be based on the amount of risk that you contribute to the group of people your insurance company covers. Your insurance company uses the home’s age and replacement cost, location, availability and accessibility of fire protection, your claim history, the type of construction and materials used, and statistical analysis to estimate the potential losses due to a disaster and arrive at a number that reasonably represents how much risk you contribute. Older homes are more likely to need repairs, for example. This may mean increased risk, which often means a higher premium. Is your home surrounded by forest or other flammable vegetation? If so, your insurance company will likely view that as an increased risk that your home will be lost or damaged in a wildfire and charge you a higher premium to pay for that risk. Is your home near the coast? If so, an insurance company might see that as an increased risk for repairs related to coastal weather, such as wind. In addition, some homes cost more to rebuild than others. A home that will cost $1 million to rebuild will have a higher premium than a house that will cost $300,000 to rebuild.

In summary, an insurance company bases your premium on a forecast of what your coverage might end up costing. It will look at the total risk it has to insure and make you pay your part.

Before an insurance company charges a premium, it must submit a rating plan that shows the Division of Financial Regulation (DFR) how it determined the premiums it wants to charge. DFR reviews rating plans to ensure the proposed premiums comply with the law. The premiums must be based on the real costs paid by the insurance company in the past and on reasonable predictions of future costs using accepted statistical methods. For a rating plan to be accepted, the insurance company must show the premiums charged are necessary to continue paying claims. Oregon law requires all premiums not to be “excessive, inadequate, or unfairly discriminatory." Read ORS 737.310. These criteria are based on historical data. That is, for each kind of insurance – auto, homeowner, etc. – the premium must be enough for that company to cover all claims but not so much that it becomes excessive, and that is all based on claims data from the past.

If you are having difficulty finding affordable home or renters insurance, consider taking the following actions:

If your premiums have increased, you are denied coverage by an insurer, or you have had your policy canceled or nonrenewed, call your agent, broker, or insurance company to ask for specific reasons why. Senate Bill 82 (2023), which went into effect on Jan. 1, 2024, requires that insurers disclose property-specific information for why a consumer is not getting renewed or why their premiums are increasing. If your agent, broker, or insurance company refuses to provide you with detailed reasons why your premium increased or you are not being renewed, you can contact the Oregon Division of Financial Regulation's consumer advocacy team at 888-877-4894 (toll-free) or file a complaint online at dfr.oregon.gov.

Ask what preventative or risk mitigation actions you can take to make your home insurable or less expensive to insure. For example, are there home hardening projects you can complete or defensible space creation projects that will make you eligible for a policy? Perhaps there are maintenance or repair issues that need to be addressed. Having an older roof, an aging outbuilding, or large overhanging trees and other yard debris will often trigger a nonrenewal or rejection of a new policy. By addressing these issues and providing evidence to your insurer, you may be eligible to stay with your existing insurer and perhaps receive a better rate or discount.

If you are able to find coverage but are having trouble affording the premiums, ask your agent, broker, or insurance company for ways to make the premiums more affordable. Ask about the annual opportunity for a rerate, available discounts, the effect of increasing your deductible, and the effect of reducing coverage limits among different coverage types. For example, you could reduce your contents coverage limit or other structures limit.

Shop around. There are more than 100 companies that write homeowners and renters insurance policies in Oregon. Consider reaching out to an independent broker or agent who can shop around at multiple insurers on your behalf. Keep a list of the companies that will and will not quote coverage and the corresponding premium. If you work with multiple brokers or agents, this will ensure you do not get multiple quotes from the same insurance company. You can also use this list of homeowners insurance companies in Oregon that provides toll-free numbers for companies licensed to sell homeowners insurance in Oregon. Don't wait until the last minute to start shopping around; this could leave you uninsured. In addition, don't cancel your existing policy until a new policy is in place.

If you are denied coverage by insurers in the standard market, explore available policies through the Oregon FAIR Plan or surplus lines market. The Oregon FAIR Plan is an insurance policy of last resort if a property owner cannot find insurance coverage in the standard market. The premiums are often more expensive than in the standard market, and the coverage is less comprehensive, but the plan does provide important protections. To qualify for the Oregon FAIR Plan, you must have been declined by two standard insurance companies. The surplus lines market consists of insurers that offer coverage for risks not typically covered in the standard market. You can usually get more comprehensive coverage, but will also pay a higher premium. To learn more about surplus lines coverage, contact an insurance broker or agent, or call the Oregon Surplus Line Association at 503-718-6700.

If you think a nonrenewal or cancellation is in violation of the Oregon Insurance Code, contact DFR's consumer advocacy team. Call 888-877-4894 (toll-free) or visit dfr.oregon.gov. You can also email dfr.insurancehelp@dcbs.oregon.gov.

Most of the time, your insurance company can only cancel your homeowners coverage for certain reasons. Reasons for cancellation include:

You stop paying your premium.
You misled your insurance company when you applied for insurance, or you mislead your insurance company when making a claim.
You break the terms of your insurance contract.
If there is a substantial increase in the risk that your home will be damaged or that there will be a loss. For example, when a homeowner installs a pool in their backyard, the new pool may be seen as a significant increase in risk to the insurer.
Extremely rare circumstances that only come up when an insurance company is at risk of going bankrupt.
Within the first 60 days of the policy, finding additional information that affects the risk of your property as outlined in the insurance company guidelines.

If any of these happen, your insurance company has grounds to cancel your policy. For the cancellation to be lawful, though, your insurance company must mail you a Notice of Cancellation to the address identified in the policy. Email does not count. Neither does a phone call.

The Notice of Cancellation must always be mailed within a specific time period to be compliant with state law. If your insurance company cancels your coverage because: 1) You didn't pay your premium, or 2) You misled your insurance company, then it must mail the Notice of Cancellation 10 days before the cancellation takes effect.

If your insurance company cancels your coverage because: 1) You break the terms of the policy, or 2) There is a substantial increase in the risk of insuring your home, or 3) The company is at risk of going bankrupt, then it must mail the Notice of Cancellation 30 days before the cancellation takes effect.

Yes, as a condition of offering coverage, some insurance companies may require assessments to be made of defensible space, general property conditions, or both. These assessments are typical and are driven by the specific property characteristics the insurer identifies in the underwriting process. This type of underwriting is allowed under the Oregon Insurance Code. All underwriting rules must be filed with the division before they are used by an insurance company, and they vary by company.

Home insurance 101

Replacement-cost coverage pays to replace your home and belongings with materials of "like kind and quality" at current prices. Actual cash-value policies reimburse the depreciated value. A replacement-cost policy will usually cost a little more. Some companies no longer offer replacement-cost coverage.

Your company must send you notice at least 10 days in advance of your policy being canceled because you have not paid your premium. This may be a late billing notice. If your policy has been "nonrenewed" (the company is not continuing to cover you for a reason other than nonpayment), the company must give you at least 30 days' notice.

Most homeowner policies have dollar limits on certain belongings, such as silverware, guns, jewelry, watches, furs, and computers. Talk to your agent or insurance company about increasing these limits to meet your individual needs.

Generally, insurance policies exclude damage caused by seepage, dry rot, or pests. This is because these problems are usually the result of poor maintenance, not a "sudden and accidental" event. Insurance companies may cancel your policy if your property has deteriorated to a point that it no longer meets the company's underwriting standards.

The appraised value of your property is the value when the appraisal was made. Your property may have lost value since your last appraisal as a result of poor maintenance or depreciation.

Yes. Dog bite claims can be quite expensive, and some insurers choose not to provide insurance to homeowners who own a breed with a history that suggests a dog bite claim is more likely.

If homeowners coverage is in force and the policy does not have a specific exclusion, the company cannot deny coverage based on dog breed.

No. Homeowner policies do not cover damage caused by earth movement. Earthquake coverage is available for an additional premium. Even though there is specialty coverage available for landslides, it is expensive and difficult to find.

No, homeowner policies do not typically cover motor vehicles. Most insurance companies will write coverage for a classic car, but a specialty collector auto policy can offer specialized coverage suited to a collector’s needs.