A new insurance law will take effect in January, and experts are already warning that people might be “exposed to serious financial risk,” once this happens, the new legislation of 2026 will affect people’s finances.
In Nevada, a “sandbox” experiment of home insurance will be launched; and it will last 4 years.
From January 1, insurances might be offering policies that won’t cover certain events anymore. Which adds up to the fact that many people in the U.S. are already struggling to find a coverage that’s convenient for them.
What’s going to change with the new experiment?
The “sandbox” trial, will allow insurance companies modify what home policies cover.
They could eliminate completely eliminate wildfire coverages from standard policies or transform it into a “extra” service, which will of course, be more expensive.
This is the first time something like this could happen, and people in risky areas are getting nervous because although is supposed to be a trial; it will last for 4 years.
“Some consumers may not realize that wildfire coverage is no longer included in their standard policies,” said Michele Steinberg and Christina Rust from the National Fire Protection Association tp the Reno Gazette Journal. “Others may be unwilling or unable to pay for an additional policy. In the most extreme case, wildfire insurance could disappear from the market altogether, exposing thousands of homeowners to serious financial risk.” They added
Why was the insurance “sandbox” part of the the new legislation of 2026?
Nevada Insurance Commissioner, Ned Gaines, believe that this new law would help owner stayed covered and protected by insurances. According to him, this will stop insurances from abandoning high risk zones in Washoe and Douglas counties. “There’s also the risk that without this bill, carriers could stop writing (policies) entirely within those areas,” he said.
P.K. O’Neill, proposed the law, to the RGJ after a public meeting in Incline Village highlighted difficulties when it came to the subject of coverage. “Some were under threat of losing their houses because their insurance was part of their mortgage,” he said. “I had Realtors say they couldn’t sell homes.”
Locals also talked about the gap between insurances, where some premium options could go up to 1,000%, while other couldn’t even get insurance on the first place.
“The message was, ‘We have to do something, we have to try something,’” “This bill covers that. If we kept doing what we were doing and we did nothing, that was going to be catastrophic.” O’Neill added.
According to The Cool Down, in 2025, policy withdrawals and non-renewals related to forest fires increased by 82%. The number of applications for home insurance that were denied because of wildfire risk went from 2,439 to 4,994, in the same period.
Authorities say that all proposed policies in the “sandbox” will be approved. Zones with high risks of wildfires, like Lake Tahoe and the east side of the Sierra Nevada, are the ones who will suffer the most with this experiment.
What the experts suggest in this situation
Wildfires keep increasing year after year, and protecting your house for it’s not an option when this happens. Fire insurance is part of the basic needs for certain areas, and with the “sandbox”, you better be on top of the rules.
Experts recommend to:
- Read even the slightest detail on your actual policies and new offers, so you understand what they are covering, and what not.
- Check mortgage contracts too, sometimes they require fire insurance.
- Have everything on record; questions or confirmations about your policies are better in writing, email, or any written support.
Owners will have to be more careful than ever to avoid financial issues while this 4 years trials is on, and policies modify to a new “normal.”