Fire insurance woes affecting businesses, homeowners throughout the Tri-state

LAUGHLIN — Struggles property owners throughout the Tri-state area are experiencing in finding fire insurance coverage have been brought to the forefront by the massive destruction caused over the past two weeks by the Southern California wildfires, which have displaced hundreds of thousands of people, destroyed an estimated 18,000 structures and resulted in at least 27 deaths in communities near Los Angeles.

The insured losses from the fires may exceed $20 billion and total economic losses could reach $50 billion, according to estimates published by JPMorgan recently. Last year, major carriers like State Farm, All State, Nationwide and USAA withdrew fire coverage or blocked policy renewals in fire-prone areas throughout the Southwestern U.S., including in California, Nevada and Arizona.

Other companies withdrew as recently as a week before the fires that wiped the entire communities of Alta Dena and Pacific Palisades, Calif., off the map. In fire-prone areas like the arid Mojave Desert, it's expected that fewer and fewer insurance options will be available and those that remain will be too expensive for many businesses and homeowners.

Property owners are experiencing policy cancellations and recently some businesses have been hit with steep increases in fire insurance rates, according to research by the Laughlin Economic Development Corporation, a local non-profit business think tank.

"As far as insurance coverage in the entire Tri-state area, we have already experienced somewhere between a 25% and 35% increase in fire insurance coverage on commercial properties. We can assume there's going to be very, very substantial fire insurance coverage issues facing our residents," Robert Bilbray, LEDC strategic development advisor, told the Laughlin Town Advisory Board last week. "On this side of the river, we are in a high-profile situation as far as our ongoing deficiencies as far as water storage for fire protection. I did want to let the board know we're looking into it, and we'll get more information on how it impacts our residents. There are going to be more carriers leaving the market."

Typically, properties with a mortgage or another type of secured financing are required to have fire insurance.

"When you're talking about fire insurance for homeowners, you're talking about every residential lender in town and all the brokers, too," Bilbray explained. "Obviously it's critical to every community in Nevada and throughout the Southwest right now, no one's ever seen damages like what we're looking at here in losses by the insurance companies (in Southern California)."

As 2025 began, some commercial properties in the area have seen even steeper increases in fire insurance premiums.

'As of right now, I think it's obvious we're going to see somewhere between a 35% and 45% increase across the board in fire insurance premiums, which is just atrocious," he reported. "Obviously Big Bend (Water District) is getting targeted with the condition of the water storage. The Laughlin Town Center's (fire insurance premium) already went up 45%."

In addition to the dry, fire-prone climate in the area, Laughlin's Big Bend Water District's infrastructure does not have as much water storage available as state law requires. While the town's water system met all applicable Nevada state codes when it was built in the 1980s, updates to these rules have resulted in the "grandfathered in" system facing a deficit of more than 4 million gallons of water storage capacity, according to district officials. BBWD – which initially was independent but was taken over by the Las Vegas Valley Water District in 2008 – has stopped allowing any new water connections, effectively creating a moratorium on new construction, until it can acquire an estimated $22 million to build new water tanks and connecting pipelines.

"I don't see any good news coming from Los Angeles County or from our insurance carrier," Bilbray said. "I'll look for a silver lining but as of right now I don't see one and we probably won't until we see what the real ramifications are in Los Angeles County."

LEDC officials have reached out to state insurance authorities in an effort to determine which carriers plan to leave the market and to provide details on the companies which will continue to offer fire insurance coverage throughout the Tri-state region. Another update from LEDC is expected at LTAB's February meeting.