Danielle Hale Chief Economist | realtors.com
Dan Daniels and his wife faced a setback in their search for a home with acreage in Northern California when they found no insurance company willing to cover the property. Their experience is not unique, as many buyers in California are encountering similar challenges due to rising climate risks.
According to the California Association of Realtors (CAR), at least 13% of real estate agents in the state reported sales cancellations because clients couldn't find insurance in 2024. Insurance companies like Farmers Insurance, Allstate, USAA, and Hartford have paused issuing new policies for homeowners in California. State Farm stopped selling insurance for new homes last summer and is seeking rate increases of up to 52% on certain residential policies.
Daniels shared that he was initially assured they could "acquire full coverage insurance" before making an offer on their desired property above Yreka. However, they were later informed that no insurer would cover it. Daniels expressed disappointment: “We were heartbroken when we found out that no insurance company would cover the property.” He added that moving back to the Midwest seemed more feasible now.
The CAR purchase agreement includes a contingency allowing buyers to cancel if unsatisfied with available insurance options or costs. This situation has affected other potential buyers too. Jameson Tyler Drew from Anubis Properties noted that "rising home insurance prices tank about 5% to 10% of our deals currently."
Sam Fitz-Simon from Compass remarked that while high costs deter some buyers, most accept it as part of homeownership expenses.
Wildfires have significantly impacted over a million acres this year alone, complicating insurance availability further. Cara Ameer from Coldwell Banker highlighted difficulties obtaining coverage in fire-prone areas affecting home values there.
Drew explained how losing a policy due to fire or flood risks leaves homeowners unable to sell widely: "This is currently an issue in Palos Verdes." Despite these concerns, some choose risky areas for lifestyle reasons.
Daniels criticized real estate agents' role saying: “I believe the real estate agent should have told us that our property would not insure.” Drew countered stating agents often lack comprehensive risk maps but need familiarity with FEMA zones and burn areas instead.
As extreme weather alters insurance landscapes continuously—Cassie Sheets from Insurify stated insurers adjust rates based on weather risks—preventive measures like weatherproofing homes become crucial alongside evolving coverage offerings potentially involving greater homeowner participation during rebuilding efforts post-disaster scenarios predicted by NOAA data showing $92 billion damages across America last year alone underlining importance addressing environmental risks seen via platforms such as Realtor.com® featuring relevant details aiding informed decisions amidst challenging market conditions today amid increasing uncertainties ahead globally impacting local realities persistently ongoing contextually speaking presently hereabouts nonetheless therein thereby henceforth accordingly altogether subsequently consequently eventually ultimately eventually inevitably subsequently effectively comprehensively extensively fundamentally broadly intrinsically essentially primarily 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