Climate Change Impact on Insurance Premiums in Oregon: A Looming Financial Storm

Climate Change Impact

Climate change has become an undeniable force shaping our world, and its effects are increasingly evident across various regions. 

To see the climate change impacts, you dont have to look far. 

Climate Change Impact and Major Climate Events 


The overall acreage burned by wildfires across the U.S. has increased since 1980. The periods with the largest total extent burned coincide directly with the warmest years on record

In Oregon, we have experienced this threat firsthand, culminating in the wildfire-turned-urban that raged through some of our smaller towns in the Alameda Fire of 2020. With nearly 2,500 homes lost, the devastation was felt deeply across the community. 

Even more recently, the nation as a whole has witnessed the tragedy of historic Lahaina town in Maui, Hawai’i burn, resulting in being named the deadliest US fire in over a century, at a death toll of 96


If the added heat of a raging fire doesn’t make you sweat in the looming concern of what could happen and when, the record breaking heatwaves certainly can. 

Though the weather record-keeping of the National Oceanic and Atmospheric Administration, or NOAA, dates back to 1880, satellite record-keeping only began in 1979. Its in this data set, July 3 – 5 of 2023 were documented as the hottest days on recordHeatwaves can cause an overall, systemic shut down– both in the human body, putting so many at risk of health impacts, and in the operation of equipment holding together the very flow of our day to day lives.


As mentioned in our blog entry on the benefits of flood insurance policy coverage, floods happen, and when they do, the impact is far reaching. According to National Geographic, the largest US floods have cost nearly $6 billion in damages per year

Right now, there are over 188,000 Oregon properties with a 26% chance of being severely affected by the climate change impact of regional flooding over the next 30 years. 


The oscillation between too much of one element to not enough moves the needle from the climate change impact and prediction of flooding to the other end of the spectrum– drought. 

With 16 million acres of farm and ranch land in Oregon, the tension of the potential climate change impact of drought becomes all too real. 

The presence and power of small family farm communities, especially here in Oregon, is something that is hard to look past– even more so when looking through the lens of climate change impacts. 

To those in the communities that provide farming and ranching services that are at risk, check out our blog entry on the importance of farm and ranch insurance to learn more about what you can do to protect yourself and your property. 

These risks of climate change impact so much of Oregon. 

But not just the vast land and environment, though– the people, their homes, their businesses and everything in between as well. 

Climate Change Impact

Living here in Oregon, we at Ashland Insurance experience these realities, but also look to those in our community with the perspective of, “What can we do? How can we help?

As Oregon grapples with the consequences of global warming, the insurance industry finds itself, at times, on the front lines of this environmental battle, working to secure the movement from incident to recovery for those that call this place home just as we do. 

The mounting risks and losses associated with extreme weather events are causing a substantial surge in insurance claims, leading insurers to raise premiums for both homeowners and businesses in Oregon. This article examines the cascading effects of climate change on insurance premiums in the state, exploring how residents and companies are bearing the financial burden of an evolving climate landscape.

Understanding the Climate Change Impact on Oregon

and Its Industries

Oregon, known for its diverse landscapes, mild climate, and eco-conscious population, is now facing significant changes due to climate shifts. 

And these shifts are felt throughout the state. 

On the statewide level, Oregon as a whole is becoming drier and warmer. This, mixed with the below-average rainfall, is igniting the conditions that cause the devastation of wildfires, and the consistent impact of drought. 

This projected (and already experienced) climate change impact adds up over time and is a current threat to some of Oregon’s largest target industries. 

Between the expanding acreage burned each year, and the changing rainfall, the timber and wood product industry are facing the impact head on. 

And as the largest softwood lumber producer in the U.S., and one of the largest suppliers of high-paying, quality employment to our rural communities, that’s saying something. 

Another of the iconic Oregon industries looking towards the future for the path through the coming effects of climate change impact? The recreation industry

When closing their eyes, most people can picture the diverse landscape and expansive backcountry. Its easy to envision what exploring and enjoying Oregon’s nature looks like. 

From the jaw dropping trails that sneak behind waterfalls, to the classic lines to ski and snowboard down Mt. Hood.

From the world class rock climbing in Smith Rock State Park, to the crystal clear stargazing over open lands with little light pollution. 

Oregon really does have so much to offer 

But, with the climate change impact as we have seen – and are prepping for more of– these recreation areas, and their associated industries of outdoor recreation gear and tourism, are at risk. 

Rising temperatures, altered precipitation patterns, and increased frequency of extreme weather events are some of the hallmarks of this global phenomenon. The state has witnessed more frequent wildfires, severe storms, flooding, and other climatic disruptions that pose a direct threat to homes and businesses.

Climate Change Impact

Climate Change Impact on Home Insurance Premiums

With all of this in mind, there are a number of climate change impacts that are far reaching across the state and our communities. 

In particular, homeowners in Oregon are experiencing the brunt of climate change-related insurance premium hikes. 

It has become uncomfortably familiar that wildfires are more rampant and intense in recent years, scorching vast stretches of forested land and encroaching on residential areas.

Between 2015 and 2020, Oregon ranked as the fourth-highest state for catastrophe due to fire and lightning. This statistic includes the 9% of the homes in Oregon– about 148,000 – currently sitting in the climate change impact zone of wildfire risk.

Insurance companies are increasingly wary of insuring properties located in high-risk wildfire zones, leading to higher premiums for those who still manage to get coverage. As the likelihood of wildfires escalates, homeowners are left grappling with the fear of losing their homes and the burden of increased insurance expenses.

On the other end of the spectrum, 268,000 properties in Oregon face significant flood risk with a projected increase of 6% by 2050

Combined with the growing risk of coastal erosion, water becomes a threat as well, balancing the wildfires and overall climate change impact felt across Oregon.

In the realm of insurance, though, flood insurance was at times considered an “untouchable risk” with the lack of reliable risk calculating infrastructure. With the development of more sophisticated models, insurers are more comfortable in underwriting the risk.

Climate Change Impact on Business Insurance Premiums

Businesses across Oregon are also grappling with the repercussions of the present climate change impact on their insurance premiums. 

As mentioned above, many industries, such as agriculture, tourism, and forestry, are particularly vulnerable to climate-induced disruptions. 

There are steps that can be taken to help mitigate the climate change impact, though. Businesses can use environmentally-friendly equipment and infrastructure, convert to fully renewable or hybrid technologies, and stay connected with the ever-changing risks. 

At times there are even discounts in premiums provided to the businesses doing their part to limit the overall climate change impact the carbon footprint of their own business has. 

Even with all the preparation that can be done, there is still the climate change impact felt at the time of a major climate event.

As the financial risks associated with these events rise, insurers respond by increasing premiums for businesses, making it difficult for them to maintain stable operations.

Furthermore, commercial properties located in areas prone to flooding or wildfires face substantial hurdles in obtaining insurance coverage at affordable rates. The heightened risks prompt insurance companies to reevaluate their pricing models and necessitate higher premiums to offset potential losses, putting added pressure on business owners.

Climate Change Impact

Climate Change Impact and the Long-Term Consequences

The repercussions of climate change on insurance premiums are not limited to the immediate financial burden on homeowners and businesses. The increasing costs may create a ripple effect in the economy. 

As insurance expenses escalate, consumers may be left with less disposable income, impacting their spending habits and overall economic activity. 

Small businesses, in particular, might face challenges in surviving these rising costs, potentially leading to closures and job losses. And, as small businesses are a hub of communal connection and growth, this climate change impact is felt deeper in the communities directly affected.

Moreover, the pressure on insurance companies may force them to reassess their presence in certain regions of Oregon altogether. If the risks become too significant, insurers might withdraw from providing coverage in high-risk areas, leaving residents and businesses struggling to find alternative insurance options.

All-in-all, the far reach of climate change impact in business goes beyond just “balancing the books“. 

Climate Change Impact and the Mitigating Strategies

While the impacts of climate change on insurance premiums are undoubtedly challenging, there are potential strategies to mitigate the effects:

  • Public Awareness: Increasing public awareness about climate change and its impact on insurance premiums can encourage individuals and businesses to adopt more climate-resilient practices.
  • Risk Mitigation: Investing in infrastructure and policies that mitigate climate-related risks, such as wildfire-resistant building materials or flood barriers, can reduce the frequency and severity of claims.
  • Government Incentives: Governments can offer incentives for eco-friendly practices, such as tax breaks for green infrastructure and sustainable business initiatives, to promote climate-resilient behaviors.
  • Collaborative Efforts: Insurers, government agencies, and businesses can collaborate to share data and knowledge on climate change risks, allowing for more accurate risk assessments and better-informed decisions.

The expansive range of the climate change impact is increasingly evident in Oregon, in turn affecting the insurance industry and driving up premiums for both home and business coverage. 

As wildfires, floods, and extreme weather events become more frequent and severe, insurers are faced with higher claims and greater financial risks. 

Homeowners and businesses are left with the burden of increased insurance costs, potentially leading to economic repercussions in the long term. By raising public awareness, implementing risk mitigation strategies, and fostering collaborative efforts, Oregon can better prepare for the financial storm brought on by climate change and work towards a more resilient future.

With any questions you may have about the coverage and protection you need, reach out at 

541.482.0831 Ashland

541.857.0679 Medford

Request a quote online