Nevada's Insurance Sandbox to Test Wildfire Coverage Changes in 2026

Nevada is launching a four-year experimental insurance "sandbox" starting January 2026, allowing insurers to trial policy variations, including excluding wildfire damage or offering wildfire-only coverage as an add-on. The initiative aims to stabilize the market and prevent insurers from abandoning high-risk wildfire areas, a growing concern given the 82% rise in wildfire-related policy cancellations and non-renewals last year. However, there is concern that this could increase homeowners' risk of inadequate coverage, especially as many may not realize wildfire protection is no longer standard. The experimental policies require state approval, and no insurer has yet proposed removing wildfire coverage entirely. The move could foster innovation among insurers, but effective regulatory oversight is crucial to avoid widening the insurance protection gap. The context of intensifying wildfire seasons in the West, driven by higher temperatures, underscores the urgency of addressing insurance availability and affordability. Future solutions will likely require a combination of consumer protections and wildfire risk mitigation strategies, including technology and environmental measures.