3-2-1 Real Estate Ready: California's insurance shift and what it means for buyers

This week's three insights from me, two quotes from others, one question to carry with you...

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I.

Insurance used to be the last item on the checklist. Something you handled the week before closing, like changing your address. That changed. In California right now it belongs at the front of the process, next to your loan pre-approval, because it can decide whether a deal closes at all.

II.

Two numbers worth knowing. First, in the first quarter of this year, more than one in seventeen new California home loans used the FAIR Plan as primary coverage. The state's insurer of last resort is no longer a rare fallback. Second, the FAIR Plan has an average statewide rate increase of roughly thirty percent taking effect October 15th, though the impact varies enormously by ZIP code. If you're on the FAIR Plan today, that's your notice. If you're buying this fall, it's part of your math.

III.

There is better news underneath all this. Carriers are coming back. Mercury, CSAA, and Travelers have all expanded California homeowners coverage this year under the state's new pricing framework, and their capacity opens and fills quarterly. Which means a quote that wasn't available in March might be available in August and gone again by November. So: get a quote before you write an offer, not after. Ask an independent broker to check every carrier rather than calling one company. If you're already insured, have someone requote you sixty to ninety days ahead of renewal instead of letting it autopay. And if you're on the FAIR Plan, treat it as temporary and check the private market periodically, because the door that was closed to you may have reopened. I'm not an insurance broker and this isn't advice about your specific property. But I've watched enough deals wobble in the last stretch over this to know it belongs early in the conversation.

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"Risk comes from not knowing what you're doing."

— Warren Buffett

"The prudent see danger and take refuge, but the simple keep going and pay the penalty."

— Proverbs 27:12

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ONE QUESTION TO CARRY WITH YOU:

When did you last have someone actually shop your policy?

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Thanks for reading,

Samuel Vera

DRE #01911575

Vera Co Real Estate Team | Rapisarda Real Estate

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