Insurance law in Nevada is constantly changing. Much of it is due to the companies trying to limit exposure and reduce potential costs. Often, they are making dramatic changes to the policy and what is covered. Policyholders might be unaware of them until they file a claim and realize they were not covered as they thought they were.
At the start of the new year, state lawmakers put in effect a new insurance law – the first of its kind in the nation – to compel companies to continue operating in the state. A big challenge for companies have been wildfires and the subsequent payouts. However, even though the companies are staying in Nevada, there are fears that policyholders could face problems because of it. People negatively impacted must be aware of their legal rights.
Wildfire coverage can be carved out of Nevada insurance policies
With the new law, AB376, insurers can carve out wildfire coverage in homeowners’ policies. They can now offer it in a separate policy or formulate another way to provide that coverage. This can be problematic because of the prevalence of wildfires on the West Coast.
Nevada residents were increasingly losing their insurance coverage or finding themselves unable to get covered at all because of the danger of wildfires and the costs associated with them. According to lawmakers, this law is an attempt to find a solution to keep people covered.
Still, there are concerns that the policyholders could be vulnerable if there is a disaster like a wildfire. The number of people who saw their policies canceled from 2022 onward was rising substantially because of wildfire risk. Others saw applications for coverage denied. This was mostly in areas where wildfires were a significant risk. People were forced to get coverage from specialized insurers that are subject to different types of oversight.
This is being called a “regulatory sandbox” providing insurers with flexibility. It is an attempt to discover different business models that leave them at lower risk while still allowing them to give people coverage. The law does not allow insurance companies to offer policies solely to cover wildfires.
People need to scrutinize their policies and understand the law
There are few things worse than facing a disaster like a wildfire and wondering what the future holds. People who believe they are protected by their insurance policy are often stunned when they discover their claim was denied based on a technicality they were unaware of.
Since insurers are trying to minimize costs, people can be left at risk. When there are insurance law changes and a dispute over a policy or a claim, there are options available. Having help is crucial to reaching a positive outcome.
