Posted on 10/28/2024 10:07:07 PM PDT by KingofZion
About 1 in 7 California Realtors had a home sale fall through due to difficulty finding insurance in the past year, nearly double the figure from 2023, according to a new survey.
The California Association of Realtors is California’s largest industry group, with about 200,000 members. In a survey of those members conducted earlier this year, 13% reported a transaction falling out of escrow due to the buyer’s inability to find insurance, according to CAR’s Annual Housing Market Survey.
In 2023, the first year CAR asked the question, 6.9% of Realtors replied yes.
Over the summer, CAR added a specific insurance contingency to its home sales template, giving buyers the option to take back their offer or renegotiate if they aren’t able to find an “acceptable” insurance policy.
Experts have told the Chronicle the problem hasn’t become dire enough to have a measurable impact on home values, especially in high-demand markets like the Bay Area. But it can add other issues into the process — such as delays in escrow or costly renovations that must be done in order to make a home insurable. California Insurance Commissioner Ricardo Lara has called the effect devastating.
Insurance isn’t required to own a home, but it is typically mandated if you have a mortgage. Those who can’t find a policy on the private market most often end up having to purchase one from the California FAIR Plan, the state’s expensive “insurer of last resort.”
Though the FAIR Plan insures less than 5% of all homes in the state, a fifth of surveyed Realtors’ most recent buyers have ended up on the FAIR Plan, which doesn’t cover major types of damage such as burst pipes or winter storms. This is the first time CAR has specifically asked about the FAIR Plan.
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(Excerpt) Read more at sfchronicle.com ...
Happening in Florida also, insurance is becoming unaffordable.
Blame gov Ron Desantis.
Another factor is California real estate pricing is very high. Describing it as bloated would be an understatement.
Will the fat continue to find buyers like they always have, due to special circumstances unique to California.
Yes and no, it’ll be a mixed bag through the decade.
For what? It’s Desantis fault multiple hurricanes hit causing out of planned insurance expenses?
In Alabama I was hit with a major storm in March 2023 ($15K), then again in July 2023 ($22K). And I had 2 other major events since 2008, I’m kind of amazed my insurance company hasn’t dropped me. I would not blame the Governor (even if a Dem) for that.
Well, it is the global warming thing!😢
Why?
I can understand house insurance going up
Due to hurricanes.
Why my car insurance doubled in 18 months? I never had any claims or accidents.
You get to pay for illegal drivers with no insurance and electric vehicles that cost a fortune to fix.
Remember to send Biden a thank you note.
Lol.
The insurance problems in Florida predate when DeSantis first ran for office. We have a very unique geography (deep water on 3 sides and flatter than a pancake) in a semi-tropical zone which is prone to hurricanes. At least one hurricane usually hits Florida every year, and there is flooding, storm surge, loss of lives and property. Insurance down here is and always has been several times what it is in most of the country. My house here cost half of what my equivalent house in Seattle cost, but my insurance is 5x higher. Most insurance companies have left the market, but DeSantis administration has been doing things to help mitigate the risks and insurance companies are starting to come back, and prices are slowly dropping.
Due to prices doubling.
You have America’s best governor.
“hurricane...flooding, storm surge”
I live in the area struck dead on by Milton.
Most houses on my street escaped without damage to the main structures.
One neighbor had shingles torn off because the heat-based sealing on the shingles wasn’t set because of tree shade.
The other house damaged on the street had its porch roof insulation ripped off and its gable siding torn off.
Two huge pines were knocked down. One was my neighbors to the south and it fell because their backyard wasn’t drained properly. Another huge pine a few houses down is at a 40-degree angle and will have to be taken down.
I walked around the neighborhood and no solar panels were ripped off the roofs.
One couple had to plant 10 trees to get a certificate of occupancy. Their $7,500 investment in silver buttonwoods was blown down.
There was no flooding on my street because the rainfall in my area was about four inches in total. One neighbor used Flex-Seal(R) around his doors, but the water never came up to his doors. Other neighbors deployed sandbags. I might use spray foam insulation around my door frames (between the inner and outer door moldings) and under sills, concrete paint & duct tape (and concrete screws for the garage door) for the next hurricane.
Almost all low level property in many county neighborhoods got flooded. In evacuation zone A, this was due to storm surge from Helene and Milton. Away from the Gulf, the flooding was due to heavy rains from the two prior hurricanes, Debbie and Helene.
For coastal storm surge, I have suggested coastal lagoons be built that would get pumped out days in advance to contain storm surge water, preventing coastal flooding. These coastal lagoons could be financed by selling lagoon waterfront lots to rich people who might build modest houses with beautiful water views. Parks in Liverpool, England were financed by selling peripheral building lots.
Bingo. Adding to that, but without any data, I’d suspect that the number of accidents/claims is up relative to miles traveled as result of ‘distracted driving’ (texting). Beyond that, a collision repair on a 2024 vehicle of almost any type is far more complicated (time consuming) than what many of remember from days long since gone. For example, one doesn’t just put a new fender or bumper and grill on a car anymore. Simplicity and low cost of such a repair used to actually be something automakers advertised as a selling point. Overall operating cost used to be touted as well, but people just don’t think like that these days. Makes me want to sell my vehicles and go get me some Detroit Iron from the mid-sixties!
The new policy i got here in PA is about $400 less this year. They stopped writing new homeowners at the end of last year. but started again this year. nationwide.
Just pay cash for the house and don’t buy insurance.
I have 2 houses in a wildfire area in Acton,CA. I just got the renewal from State Farm for one of them and my Rate has NOT gone up even though we had a Fire Claim 3 years ago when my wife phucked up and set the house on fire.
My realtor friend told me recently she can get ANYONE Homeowners Insurance at a normal rate by Out of State companies, I would think all realtors know this.
I’ve considered going without Homeowners’ Insurance. Mine went up from $1,800/yr to nearly $6,000 this past year. Combined with my auto insurance nearly doubling, and virtually everything else up 25% over the past four years, my ‘fun’ money evaporated. Unfortunately, I don’t have confidence that the FD would protect my home in event of wildfire, even though I have a public street and a fire hydrant 25 feet from my front door, and I could not recover financially from that loss. This scenario, however, is not of any concern to CA politicians, who mostly want us all living in apartments in hell-hole cities. “Can’t afford to live near beautiful open spaces? Well maybe you shouldn’t be living there!” is their response.
Insurance covers rebuilding the property if there is a catastrophic loss. It’s reasonable to expect that with the massive gains in property value, anticipated losses have to be covered. 2X home values requires 2X insurance costs.
I am on the opposite side of the state (Daytona), and it sounds like we got it worse than you. Three of my customers went out of business because of the flooding. One who was planning to open next week is now delaying while they fix the damage. In Port Orange, they had a Town Hall to discuss the storm and the Mayor could not attend in person because of all the flooding around his house. The Daytona area got the winds coming back in from the East (we were north of the eye) and we had gusts in the 75-90 range and they say we got 26 inches of rain in 4 days. One of my employees was without power for 2 days and I know of several that went without internet for over a week.
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