California’s home insurance crisis: real estate industry adjusts
California’s homeowners insurance desert is becoming increasingly tight due to cancellations, non-renewals, sellers refusing to sell, and soaring home and auto insurance premiums for those who qualify. The crackdown on home sellers and home sellers is becoming increasingly strict. Despite falling interest rates, California’s booming days of healthy home sales and quick financing seem increasingly distant.
OAKLAND, Calif. – California’s homeowners insurance desert is looming, with cancellations, non-renewals, sellers refusing to sell, and rising home and auto insurance premiums for those who qualify for coverage, homeowners and homebuyers face. The crackdown on buyers and home sellers is becoming increasingly strict. get it. Despite falling interest rates, California’s booming days of healthy home sales and quick financing seem increasingly distant.
A “sale pending” sign is posted in front of a home for sale in 2023 in San Anselmo, California. (Photo by Justin Sullivan/Getty Images)
California’s insurance drought has resulted in 13% of real estate agents losing sales or sales this year because insurance was either unavailable or too expensive, according to the California Association of Realtors. That’s about twice as much as last year. David Shaffer is an insurance broker who works with multiple insurance companies. “I’m actually surprised it’s not a higher percentage,” David Shafer said.
Real estate agents and rejected buyers don’t like to talk about it, but without saying a word, these are the people many real estate agents absolutely rely on to close the deal. You cannot get a mortgage without insurance.
“Right now is the most difficult time ever to secure home insurance in California,” Schaefer said. “The combination of non-renewal and carriers restricting access to coverage across the board makes it very difficult to find options, especially for new buyers,” said Aly Lopez, multiline insurance broker at Acrisure. ” he said.
Without insurance, lenders cannot make loans. “And now you can’t sell it, much less let anyone else use it to sell,” said Fif Gabodian, a mortgage broker at Origin Point.
The insurance you can find is super expensive. “Insurance normally costs $500 a year, but if you can get it, it’s $14,000, $15,000, $20,000,” Gabodian said. “There are significant delays, especially when contracts are not renewed or when purchase deadlines are met,” Lopez said.
Rosenfield, the founder of the consumer watchdog group that authored the 36-year-old Proposition 103, said the Department of Insurance’s new rules, expected to be released by this year, do not guarantee an improved market.
“The way the law is currently being applied by Insurance Commissioner Ricardo Lara, the answer is yes, cancellation is possible, non-renewal is possible and there is no protection for any reason or no reason.” said Rosenfield. “If these regulations are implemented, the ultimate impact of improving California’s insurance market may not be known until 2026 or later,” Schaefer said. “They won’t go into effect for a long time. It will take years for insurance companies to implement them,” Rosenfield added.
This is the time when the head of the insurance bureau will be fired. The ministry says it is continuing to develop new regulations.
