As more insurance companies scale back or drop coverage in California, the ability to secure insurance is now impacting escrows here on the Central Coast.
“It’s just become one more challenge in getting a transaction closed, securing that insurance,” said Dale Kaiser, Dale Kaiser Real Estate owner & broker.
Dale Kaiser has served the North Coast real estate area for 42 years. He says that with fires becoming more frequent in the state, buyers are facing even more challenges getting insured.
“If there is a loan involved in a transaction, it will not close unless it is secured by a policy of insurance,” Kaiser said.
He says in today’s market, securing insurance needs to be done right away.
“It used to be that at the last minute, you’d call an insurance company and get a policy within the last day or two of closing. In today’s world, you need to search out your insurance literally 30 days out. When you open the escrow, you need to start looking for insurance,” Kaiser said.
Cambria resident Linda Logan held the same home insurance policy for 25 years and says she never filed a claim.
“In May, I got a letter, and it basically gave me three months to find new insurance because it was going to be canceled,” said Linda Logan, Cambria resident.
She settled on the California Fair Plan. She says it was her last resort after numerous companies would not insure her home. “The last amount that I paid was $2,500 a year. The California Fair Plan with the supplement was $6,000 a year,” Logan said.
Assemblymember Dawn Addis says she hears from people daily about their home insurance struggles. Addis says the recently created Sustainable Insurance Strategy is meant to bring insurers back into the state.
“We will likely see an increase in rates, I hate to say that, but that’s the reality, and it is what the commissioner has said is likely to happen, but that is in exchange for the guarantee that insurers will come back to the state and stay here,” said Assemblymember Dawn Addis.
Addis says she is seeing a multifaceted problem with homeowners’ insurance: those having to pay higher rates, those who have been denied insurance, and those who are underinsured.
“I was on the phone today with a homeowner who said when they moved into their home in 2018, they paid $2,200 a year for insurance. It’s going up to $9,600 a year,” Addis said.
Addis is having a virtual town hall meeting on homeowners’ insurance on Wednesday, August 13 at 5:30 pm. Addis says the insurance commissioner, a nonprofit consumer advocate, and a fire marshal will be attending the town hall.
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