Nevada homeowners are just some of the latest people to be left out in the cold by home insurance agencies.
What's happening?
Just before wildfire season ramped up in the Silver State, 8 News Now reported on the plight, which is becoming increasingly common in the West and elsewhere.
In August, Nevada Current dove deep on the issue, reporting that nearly 5,000 policies were set to be canceled by carriers this year. The rising risk of wildfires is partly to blame, but the associated costs these businesses incur may not outweigh the profits they rake in.
The Current noted one unnamed insurer with 584 policies in Incline Village makes $5 million to $10 million every year on that group alone. But the risks of payouts if that area were to experience a disaster could cost hundreds of millions.
"In spite of these profits for homeowner insurance companies, the increases in national catastrophic losses, especially from western state wildfires, is causing them to reduce exposures in Nevada," said Nevada Insurance Commissioner Scott Kipper, according to the Current.
The cancellation of contracts creates a vicious cycle. If you're trying to buy a home, lenders may not back you without finding a new insurance policy. And if you're trying to sell, almost no one will be able to buy from you without a mortgage. So you may be stuck in a home susceptible to natural disasters without the safety net that insurance provides.
California and other states in the region and across the nation offer plans for homeowners who aren't able to secure other coverage, but Nevada is not one of them, according to 8 News.
"Housing prices will go down is the bottom line," Incline Village Realtors president Denise Bremer told the channel. "If you can't get insurance, you won't buy, and if you put your house on the market the value will go way down because there are no buyers."
Why is this important?
This is wreaking havoc on people's finances. People who can retain insurance have been slammed by the expense, which has risen 21% since 2018, The Nevada Independent reported, citing one owner with fire insurance who said their rate skyrocketed from $14,000 to $136,000.
Even homeowners who live under homeowners associations are having trouble because those groups can lose their coverage, too. One Incline Village resident's monthly dues almost tripled from $600 to $1,700, according to The Nevada Globe.
This is mostly the result of global heating, which is increasing the frequency and intensity of wildfires and other extreme weather events, including droughts and floods, affecting the entire United States. In Nevada, where 500,000 acres go up in flames every year, there are twice as many wildfires as there were two decades ago, per the Independent.
California and Florida may be the states impacted the most by this problem, but millions of people could have to relocate.
What's being done about the loss of coverage?
Those who may lose coverage because of wildfire risk can take steps to counter that, as 8 News detailed.
Protecting your home and property by creating a defensible space around it is essential. This means removing vegetation and other potential fuels — brush, wooden fencing, mulch, and more — from the 30 feet around your house. This buffer zone prevents embers from igniting anything before the actual fire reaches the area.
Bremer said that bundled insurance policies can also help homeowners keep their coverage because the companies stand to make more money.
In the big picture, though, the solution is to stop using dirty energy — the root cause of this multifaceted issue — by electrifying homes and takingothersteps to cut back on pollution-producing choices.
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