Contact: Yeraldin Deavila, Public Information Officer
Phone: (775) 687-0772
E-mail: ydeavila@doi.nv.gov  

FOR IMMEDIATE RELEASE– August 19, 2021

Carson City, NV – With the increased threat of wildfire in Nevada and the rise of construction costs around the country, it is important that consumers review and understand the type of home insurance coverage they have so that they know how their insurance company will pay a claim in the event of a loss.

“Consumers should consider how their home insurance policy is affected by the increase of building materials and construction costs which have increased significantly this past year,” said Insurance Commissioner Barbara Richardson. “A home insurance policy pays for the cost to rebuild or repair a structure. With the price of materials such as lumber and steel increasing, consumers are encouraged to meet with their insurance agent or company to make any necessary adjustments to ensure their assets are protected adequately, and that rising construction costs have not left them underinsured.” 

Consumers are encouraged to be proactive and take the following steps: 

Ask a licensed insurance professional if their policy coverage is replacement cost or actual cash value. These two coverages are not the same. Replacement cost is the amount it would take to replace or rebuild a home or repair damages with materials of similar kind and quality, without deducting for depreciation. Actual cash value is the amount it would take to repair or replace damage to a home after depreciation. Depreciation is the decrease in home or property value since the time it was built or purchased because of age or wear and tear. 

Given the construction cost increases, make sure their home is not underinsured. Ask an insurance professional if the policy limits are sufficient to fully replace their homes in the event of a total loss. It is encouraged to periodically review their policies and make any updates that are appropriate for their situation.  

Save money by asking a licensed insurance professional about policy discounts. Consumers are also encouraged to take advantage of Nevada’s competitive home insurance market and consider their options by shopping for insurance companies.

Lastly, consumers who live in wildfire-prone areas are encouraged to take mitigation efforts on their property, such as creating defensible space, using fire-resistive materials for the roof and other exterior parts of the home, and removing dead vegetation from the property. 

For this and other helpful tips, consumers are encouraged to visit the Division’s website where they can also read the Division’s Guide to Home Insurance at https://doi.nv.gov/Consumers/Homeowners-Insurance/.  

About the Nevada Division of Insurance

The State of Nevada Division of Insurance, a Division of the Nevada Department of Business and Industry, protects the rights of Nevada consumers and regulates Nevada’s $18 billion insurance industry. The Division of Insurance has offices in Carson City and Las Vegas. In 2020, the Division investigated more than 2,300 consumer complaints, answered over 10,000 inquiries, and recovered over $4.5 million on behalf of consumers. For more information about the Division of Insurance, visit DOI.NV.GOV.  

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