Nevada's New Homeowners Insurance Law Allows Wildfire Coverage Exclusions Starting 2026

Starting January 2026, Nevada will implement a four-year insurance 'sandbox' experiment allowing homeowners insurance policies to exclude coverage for certain risks, including wildfire damage. This change permits insurers to offer such exclusions as standard, with wildfire coverage available only as an add-on at an additional cost. Experts caution that this could leave homeowners financially vulnerable, especially in wildfire-prone areas such as Lake Tahoe and the Sierra Nevada Mountains, where wildfire-related policy cancellations and non-renewals have surged recently. The number of wildfire-related insurance policy cancellations and non-renewals in Nevada rose by 82% in 2025, indicating growing challenges in maintaining coverage. While the Nevada Insurance Commissioner and lawmakers view the reform as a necessary measure to keep insurers engaged in the market, the shift may result in homeowners facing higher costs or becoming underinsured if they forgo supplemental wildfire coverage. Mortgage agreements requiring fire insurance create additional compliance considerations for homeowners under the new rules. State officials will approve all new insurance products within the sandbox to regulate market changes and protect policyholders. The legislation reflects ongoing efforts to adapt the homeowners insurance market amid increasing wildfire risks and insurer withdrawal trends, emphasizing the importance for homeowners to carefully review policy details and endorsements in this evolving regulatory landscape.