Nevada, with a population of 3 million people, is mostly desert with a semi-arid climate and it is the driest state in the US. Nevada tends to have fewer weather related catastrophes, has no hurricane exposure and a minimal risk of tornadoes at an average of less than 2 tornadoes a year.
Nevada’s lack of precipitation, at only around 7 inches a year, creates a minimal risk of many of the types of issues that lead to homeowners insurance claims. Droughts are common in the state and are directly related to the lack of precipitation each year. While this can and often does lead to the dry conditions that cause wildfires, they are typically small, quickly contained and in sparsely populated areas. This means that, as opposed to some of its high risk neighbors, there are seldom widespread homeowners claim events. However, there have been some major events where, in 2018, Nevada experienced a wild fire that destroyed 22 homes and forced hundreds into evacuation and the Martin fire spanned 57 miles long and 31 miles wide, the wildfire lasted months.
Nevada is a state that is seldom thought of as being cold, but at certain times of the year, Nevada can have temperatures with lows below freezing. Many homeowners do not expect these colder temperatures and therefore are unprepared to deal with issues like frozen pipes. As long as temperatures remain warm, Nevada will never be one of the higher risk states for winter related issues.
While the natural causes of homeowners claims are less prevalent, many areas in Nevada have been deemed as high risk due to property crime. Annually there are 2587 property crimes per 100,000 inhabitants which are well above the national average. These risks can be mitigated by installing camera systems and monitored alarms which protect homes, but also give discounts by many homeowners insurance companies.
Homeowners in Nevada are more likely to be able to avoid many types of the high risk issues that other states face but some areas are risky due to the natural geography of the state. Nevada has not had the need to implement a state FAIR Plan due to the lack of these high risk factors as well as a competitive and thriving marketplace. Over time the insurance market will continue to respond to the events that cause homeowners insurance claims and mitigating the potential for homeowners losses will continue to become more important as advances in claim prevention become more prevalent.