Calif. insurance woes sunk twice as many home sales this year, realtors say

By Camille von Kaenel | 10/30/2024 06:12 AM EDT

The annual market survey from the California Association of Realtors shows that problems with property insurance are worsening.

Flames consume a house near Old Oregon Trail.

Insurers are still skittish after record-breaking wildfire losses in California. Ethan Swope/AP

SACRAMENTO, California — More and more California homebuyers are having to drop out of their purchases because they can’t find affordable insurance, according to a new survey from the California Association of Realtors.

Thirteen percent of realtors surveyed said they had at least one transaction fall out of escrow because of insurance problems in 2024 — double the share in 2023. The association’s research arm, the Center for California Real Estate, released the survey to POLITICO on Monday ahead of a Wednesday conference in Los Angeles.

Major property insurers like State Farm and Allstate remain skittish on California after high wildfire losses despite efforts by Insurance Commissioner Ricardo Lara to entice them back. That’s left few options for homeowners, who increasingly are looking for insurance from unregulated companies or from the state’s insurer of last resort.

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Twenty-one percent of realtors surveyed said their most recent client as of midyear ended up buying from California’s insurer of last resort, the FAIR Plan. That’s an alarmingly high share, given that FAIR Plan policies made up only about 3 percent of the total market as of 2021, the last time the Insurance Department made the data public.

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