Committee hears bill to create Nevada 'fair plan' for homeowners and habitational insurance amid rising nonrenewals

Assembly Member Jill Dickman presented Assembly Bill 437 to establish a Fair Access to Insurance Requirements Plan (a “fair plan”) to provide a residual market for property owners unable to obtain traditional homeowners or commercial habitational insurance.

Dickman told the Assembly Committee on Commerce and Labor that fair plans operate in other states and are pools in which authorized insurers share income, expenses and losses according to their participation. She said fair plans exist as a market‑of‑last‑resort, not as a state‑funded program, and cited nationwide precedent including a recently authorized Colorado law (HB23‑1288).

Why it matters: Insurance commissioner testimony referenced by the sponsor showed a sharp rise in policy nonrenewals and application declines tied to wildfire risk. Dickman quoted division figures showing 264 homeowner policies adversely affected by wildfire risk in 2022, 481 in 2023 and 2,700 in 2024; applications declined from 2,439 (2022) to 4,994 (2023). She and witnesses said those trends threaten local real estate and home‑sale markets because lenders require insurance.

Conceptual amendment: The sponsor described a conceptual amendment to limit the fair plan’s scope and add mitigation and eligibility guardrails. Key amendment components described at the hearing include requiring applicants to obtain wildfire risk assessments and to implement required mitigations; requiring applicants to show denial by three standard insurers before accessing the fair plan; requiring periodic re‑solicitation from standard insurers (every two years) while covered by the fair plan; and including fire chiefs on the plan’s governing board to prioritize mitigation.

Witnesses: Michael Brown (Nevada State Fire Chiefs Association) and multiple local fire chiefs testified in support, telling the committee they receive frequent calls from homeowners whose policies were nonrenewed and that mitigation and defensible‑space work are essential complements to any fair plan. Washoe County representatives said habitational policy limits in the bill (commercial habitational up to $5,000,000) are important for condominium and HOA markets that serve workforce housing near Lake Tahoe.

Fiscal and structural considerations: The sponsor said fair plans require an initial capital assessment paid by member insurers to purchase reinsurance and stabilize operations; she referenced the Colorado fair plan’s initial capital assessment described in testimony (amount referenced in the hearing record as approximately "45,406,500" as stated by the sponsor) and noted plans reported combined operational gains nationwide. Supporters stressed the amendment aims to keep the fair plan narrowly tailored as a last‑resort mechanism.

Opposition and alternatives: Trade witnesses asked the committee to prioritize market fixes such as streamlining rate review, improving regulatory processes and promoting mitigation rather than creating a fair plan that could become a large insurer over time, citing California’s experience where the fair plan’s market share grew significantly. The National Association of Mutual Insurance Companies urged reforms to the voluntary market rather than creating an insurer of last resort.

Ending: Sponsors asked the committee to adopt the conceptual amendment that emphasizes mitigation, board expertise and eligibility requirements. No formal vote was recorded in the transcript; sponsors and stakeholders said additional drafting and implementation details would be needed before the plan could be established.