Insurance issues now kill 1 in 7 California home purchases, often after buyers have already paid for inspections and appraisals. Here's what you need to know before making an offer.
The Hard Numbers
- 30,000 California homes losing State Farm coverage this year
- Up to 69% of properties in some ZIP codes losing coverage
- 7 major insurers restricting new business in California
- Insurance costs tripling in high-risk areas
Critical Insurance Checks Before Making an Offer
Location Risk Assessment
- Flood zone designation
- Fire hazard severity zone
- Seismic hazard zones
- Distance to fire stations
- Historical claim patterns in the area
Property-Specific Factors
- Construction type and materials
- Roof age and condition
- Electrical system updates
- Fire mitigation measures
- Distance to brush or wildland areas
Insurance Carrier Research
- Available insurance options
- Premium estimates
- Coverage limitations
- Alternative market options
- FAIR Plan eligibility
Protecting Your Deposit
Many buyers don't realize that earnest money deposits can be at risk if insurance isn't secured before closing. Protect yourself by:
- Making offers contingent on insurance availability
- Getting written insurance quotes before removing contingencies
- Understanding FAIR Plan limitations and costs
- Budgeting for higher insurance premiums
- Identifying backup insurance options
Most Affected Areas in Los Angeles County
- Pacific Palisades (90272): 69% non-renewal (1,626 homes)
- Bel Air (90077): 67% non-renewal (665 homes)
- Brentwood (90049): 62% non-renewal (1,301 homes)
- Calabasas (91302): 60% non-renewal (1,090 homes)
- Beverly Hills (90210): 46% non-renewal (698 homes)
Take Action
Before falling in love with a property, check its insurability with Henge's free assessment tool. Know the risks before you commit your earnest money deposit.