PIA Western Alliance State of Nevada’s No Wildfire Coverage Homeowners Policies

A bill in Nevada went into effect on January 1st that allows property-casualty insurers to sell policies with no coverage for wildfire damage. Passage was a bipartisan effort. The “experiment” lasts through 2029.

A homeowner skipping the wildfire coverage will see a big discount on their premiums.

Mark Sektnan of the American Property Casualty Insurance Association (APCIA) thinks the idea is a good one. “If it ends up being a positive outcome, other states might start looking at it,” he said.

To date, no insurer operating in Nevada have announced plans to sell the wildfire-less coverage. That leads to the question of whether there is actually demand for the exclusion. Looking more deeply at the state’s statistics, demand might be on the way.

Nevada’s average homeowners premium is $1,555. Price-wise, the Consumer Federation of America ranks Nevada 46th. The Insurance Information Institute (The Triple I) sets Nevada’s average homeowners premium at 49th in the nation.

Former Nevada Insurance Commissioner Scott Kipper — testifying about the bill when he was commissioner — said, “We have enjoyed some of the lowest rates in the West for a long time, and the state has been a profitable place for insurers.”

Nevada also does not have a serious wildfire problem. The Federal Emergency Management Agency (FEMA) ranks it as 19th among states with wildfire-related disasters.

Worries — naturally — are that a homeowner will unknowingly purchase insurance that doesn’t cover wildfire damages. National Fire Protection Association spokesman Michelle Steinberg says this is a very bad idea.

“I was shocked to find out that wildfire could be excluded,” Steinberg said. “If you’re a homeowner who doesn’t know much about insurance, which I argue most people don’t, we’re looking at folks assuming they had wildfire coverage and finding out they don’t. It’s not a matter of, I lost the use of my kitchen for a month. You’re homeless.”

Source link: E&E News — https://bit.ly/4t3wQ4F