Home insurance is an essential part of purchasing a home. “What we’re hearing is that now, when buyers present an offer on a property we’re not only asking them for pre-approval for a lender, we’re also asking them if they’ve spoken to their insurance agent if they’ll insure the property,” said Joske Thompson, a broker at Compass Inc. Regulation directs insurance companies to reward consumers who take wildfire mitigation actions under the state’s Safer from Wildfires framework. In San Francisco, real estate agents say they have seen deals fall through because would-be buyers couldn’t get insured.Ĭalifornia California to require insurance discounts for property owners who reduce wildfire risk The insurance crunch is affecting buyers across the state already, even in areas where the wildfire risk is low. Before State Farm’s announcement, the company requested a 28% rate hike on homeowners’ insurance Allstate has filed for a 39.6% increase. The average California homeowner’s annual insurance premium is $1,300, compared with more than $2,000 in other states with wildfire risk and $4,000 in hurricane-prone Florida, according to the Insurance Information Institute.īut new home buyers could be forced to pay more, regardless of their home’s proximity to wildfire dangers. The FAIR Plan, which offers minimal coverage at high rates, is meant to be a provider of last resort, but enrollments have surged 70% since 2019 to 272,846 homes in 2022.Ī series of catastrophic wildfires in recent years has increased calls from insurers to weaken the state’s consumer-friendly policies that have held down rates for decades.
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