CALIFORNIA – The California Association of Realtors (CAR) released their 2024 Annual Housing Market Survey and found that 31% of realtors worked with homebuyers who had difficulties obtaining insurance.
CAR says homeowners insurance is the leading issue impacting housing and homeownership.
The realtors surveyed said some of the insurance difficulties buyers encountered were:
- lack of options;
- insurance companies not writing new policies;
- not a lot of insurance companies will provide coverage in high fire areas;
- expensive and Cal Fair Plan took so long.
“With insurance rates skyrocketing, large carriers leaving the state and major legislative changes underway, homeowners insurance was far and away the biggest issue in the housing sector this year,” said CAR.
Photo credit: CARSeven of California’s largest insurers limited new policies
Seven of California’s largest property insurers – State Farm, Allstate, Farmers, USAA, Travelers, Nationwide and Chubb recently limited new homeowners policies. They made up just under 35 percent of the state’s home insurance market in 2023.
Several other insurance companies also stopped writing new home insurance policies in California.
Although the California FAIR Plan is available to homeowners, it typically offers limited coverage at higher premiums than standard policies. It is intended only as a last-resort option for those unable to obtain insurance on the regular market.
The FAIR Plan has almost tripled in size over six years from 126,709 policies in 2018 to 365,694 policies in 2024.
13.4% of realtors said they had transactions fall out of escrow due to insurance
According to CAR, one-fifth of homebuyers ended up buying from FAIR.
When asked whether any transactions fell out of escrow due to failure to secure affordable insurance, 13.4 % of the realtors said they had as compared to last year – 6.9%.
74.7% of the realtors who had a transaction fall out of escrow said it was because insurance was not available to the client. 17.8% said that the premium was too expensive.
“While Insurance Commissioner Ricardo Lara shared his commitment to delivering major insurance reforms around rate change rules by the end of the year to help bring carriers back to the state, relief will not be immediate,” said the CAR news release.
They go on to say that insurers need more expedited processing and approval by the California Department of Insurance, and time to implement the changes.
 released their 2024 Annual Housing Market Survey and found that 31% of realtors worked with homebuyers who had difficulties obtaining insurance.){kind=link}