On Jan. 1, a new Nevada law took effect that gives insurance companies the option to remove wildfire coverage from homeowner or homeowners association insurance policies. In places like Incline Village, home of some of the most expensive and at-risk properties in the state, the reaction to the new law is mixed. 

Assembly Bill 376 allows insurance companies to exclude wildfire coverage from homeowner policies, essentially freeing those companies from that liability in high-risk areas. The law also provides that insurance companies can offer supplemental wildfire coverage through separate policies, ostensibly letting homeowners decide whether they want just basic coverage or to purchase home and wildfire coverage separately. 

“The bill addresses an urgent and important matter facing many homeowners in my district and, actually, statewide both north and south,” Republican Assemblymember PK O’Neill of Carson City, who co-sponsored the bill, told members of the Nevada Assembly Ways and Means Committee last May. “That is the issue of homeowners insurance. As you are aware, many housing developments within Nevada sit squarely within the wildland-urban interface, which is just a fancy way of saying they are in a transitional space between the forest and developed land.” 

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A view of Incline Village, Nev., above Lake Tahoe.

O’Neill continued to explain to the committee that many Nevadans are “facing cancellations of their homeowners insurance policies” and that some cannot complete the purchase of a home because they can’t get insurance, and others still can no longer afford premiums. The solution, he said, was to work with insurance industry representatives to find a way that could make insurance available, and perhaps more affordable, again to homeowners. 

Across the state line in California, residents who can’t get coverage have a safeguard in the FAIR Plan, the state’s backstop “available to California residents and businesses in urban and rural areas who cannot obtain insurance through........

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