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Are you struggling with your real estate insurance? You might have heard from your insurance agents, friends, and others about the challenges of the California insurance industry, including the increase in insurance costs due to wildfires in California. Today, I want to share three takeaways, along with the obstacles and solutions, so you can have a smoother experience with your real estate insurance transactions.
1. Get insurance quotes. As a buyer, you want to have your insurance quote as quickly as possible, but there’s currently a backlog. This delay can be due to the California Fair Plan or simply because your insurance agent is busy with other clients, which means you have to wait a while to get it.
My solution is that once your offer is accepted, you should contact multiple insurance agents. This will allow you to get multiple quotes and make a decision as quickly as possible.
2. Home Inspections. Insurance underwriters and carriers are becoming more selective with their quotes. They may request a home inspection and ask about conditions like the roof or plumbing the seller needs to provide.
One major concern for insurance carriers is the condition of electrical panels. Older brands like Cisco and General Pacific are known to be faulty, and if insurance carriers see them, they may cancel the policy immediately. As a buyer, you need to understand these obstacles. Sellers should address any potential issues before listing their property to avoid delays in your transaction.
Insurance underwriters should not be underestimated. Additionally, after closing, your insurance company will send an inspector within a month to verify that all issues from the inspection report were resolved or to identify any new issues. If new issues are found, you may have only 30 days to fix them.
3. Claims. Sellers should be aware of how insurance claims can affect your situation. When insurance companies review quotes for buyers or current homeowners, they may consider claims history going back three, five, or even seven years.
In the past, particularly when fires are rampant, you might have felt you should file a claim, especially with adjusters reaching out to offer assistance, saying they could get you some money. However, this could have negative consequences for you now.
When it comes to claims, make sure you truly need to file one. If the expense is only a few hundred to a few thousand dollars, paying that out of pocket might make more sense rather than risking higher premiums or policy complications.
These are the biggest takeaways, obstacles, and solutions I’ve been seeing in the insurance industry right now. I make sure to always stay informed on these issues, as I believe the situation is likely to worsen before it improves.
If you have any questions, feel free to contact me at (818) 312-3351 or at andrew@randyplaice.com. I’m here for you during these challenges, to make tough conversations, and offer effective solutions.
