CALIFORNIA, USA — The California insurance crisis, which has seen a pause or a dramatic drop in homeowner insurance policies, is now impacting the state’s real estate industry.
The California Association of Realtors (CAR) purchase agreement now has a specific contingency for insurance, allowing the buyer to cancel the contract if they are not satisfied with the insurance options and cost available to them.
“The landscape for insurance in California has changed quite a bit,” said Erin Stumpf, a Sacramento Realtor with Coldwell Banker Reality. “Usually, it was almost an afterthought in our transactions, and now I am advising my clients on day one, start trying to shop for insurance.”
Stumpf has been a realtor for nearly 20 years. She is also on the board of directors for CAR.
Real estate officials have reported difficulties getting their clients an insurance policy, but Stumpf says Sacramento has not had too many issues when compared to other parts of California.
“Anywhere that is a moderate high fire hazard area," Stumpf said. "Those are the areas is where we start to see difficulty in obtaining policies. It is even becoming a little bit of a problem in our suburban and urban areas too. If a property is older, if a property has aging plumbing, electrical or maybe an older roof or trees that encroach on the structure, those things can all be problematic when trying to get an insurance policy.”
ABC10 has been reporting on California’s growing homeowner insurance crisis, which has seen companies like State Farm and Allstate stop accepting new applications. This is the latest ripple effect.
“You just have to be more proactive earlier in the process,” Stumpf said.
Stumpf recommends finding a good realtor and insurance agent to navigate the changing landscape.
For existing homeowners, it is recommended being proactive, doing repairs and trimming trees to prevent receiving a non-renewable notice from the insurance company.
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