CA Insurance woes when selling

[Villanelle]

Ugh.  We are selling--or trying to sell--or CA rental property.  It was on the market 3 days and we got a great offer and took it on Tuesday.  We've now fallen out of escrow.  Why? 

The buyer struggled to even find someone who would insure it, and when they did, it was... $6k.  We had a claim in 2020 that was about 40k.  It had nothing to do with natural risks.  A toilet supply line broke, ran all night, and flooded the floor below.  It's frustrating because that could happen in any home--and I'd even argue that it is more likely to occur in some other home than hours since ours now has new supply lines--but insurers just see a "water" claim and either walk away or offer ridiculous quotes.  Since many don't really want to be doing business in CA, it's a great excuse to not even offer a quote.

Any suggestions on how to proceed?  Clearly, this is going to be an issue for any buyer, unless maybe they are a cash buyer (but even then, I'd think most people won't self-insure and would still shop insurance before they close).  We would have offered a sizable credit to this buyer, but didn't even get to that point. 

If worst comes to worst, we can keep renting it, but don't want to.  I'm ready to be done being a long-distance landlord, and we were hoping to use the equity to buy a residence when we move this fall.  It technically makes money, but only because our mortgage is on 2007 prices. 

One of the many reasons I wanted to sell was seeing an upcoming CA insurance disaster.  Looks like I was right, but also too late. 

[bacchi]

Lower the price until it becomes a deal. Estate sales sell because, even though the house is a disaster, the deal is too hard to pass up.

[GilesMM]

Talk to a local independent insurer and have them find you a deal. State Farm is a good place to start, if they are still in CA.  Include the quote in the sales info or disclosures.

[reeshau]

If this is a surprise, what is your insurance?  How would your company price a new policy on your place?

And yeah, talking with an independent agent may be helpful, and save you from having to price in this headache.

[Villanelle]

Talk to a local independent insurer and have them find you a deal. State Farm is a good place to start, if they are still in CA.  Include the quote in the sales info or disclosures.

State Farm was the one insurer even willing to write.

[Villanelle]

If this is a surprise, what is your insurance?  How would your company price a new policy on your place?

And yeah, talking with an independent agent may be helpful, and save you from having to price in this headache.

We have USAA which isn't open to everyone.

But, I have potentially semi-good news.

It seems the centralized insurance database is wrong.  It's showing 2 claims one day apart, totaling almost $75k.  I spent a while online with my insurer.  They show one claim, but there is apparently no way to correct or dispute the database.  But there's a thing called a Claims Experience Letter, which serves the same purpose as correcting the database.  They issued me a letter saying I have one claim only, for about $30k.  I don't yet know it this is something other insurers will accept, but my insurer said it's standard practice to do so. So I guess I give this to buyers when they are shopping for insurance.  I think my agent is going to reach out to his insurance broker contracts and see what they say about the letter.  Hopefully, one smaller claim is a much less dire picture than 2. 

[reeshau]

We have USAA which isn't open to everyone.

You could also offer a "veteran's discount" on the price, to do a fellow vet a favor, while also knowing this is an avenue they could pursue.

[Catbert]

Is the high cost of insurance because of the claim(s) or because of geography?  One of my rentals in a suburban area is within 2000 feet of a canyon and is deemed an unacceptable fire risk.  I ended up in CA's FAIR* scheme and a second policy for other things.  Cost twice as much for less coverage.  That is unfortunately the state of CA insurance today. 

*CA state high-risk pool if you can't get insurance elsewhere.

[MaybeBabyMustache]

We're very casually looking at properties & I noticed one (in Santa Rosa) where the seller had listed that they would pay fire insurance for the first 5 years, up to x$ amount. Maybe calling something like that out in your listing would help? It's obviously just a repackaging of a credit you may have given anyway, but may help buyers get over the sticker shock of insurance.

[merula]

I work in P&C insurance, although not specifically in personal lines or CA.

Generally speaking, you shouldn't have a problem with that experience letter. Your buyers might run into trouble if they get a weird agent or something, but it is pretty standard.

However, State Farm is not an "independent" insurance company. "Independent" insurance agents work with multiple carriers, and because of that can find coverage for more hard-to-place risks. If you talked to, say, an Allstate or Farmers agent, they're going to tell you "sorry, nothing I can do, [Allstate/Farmers] isn't writing new in CA." BUT if you talk to a local independent agent, they might say "Yeah, some of our carriers have pulled out, but we still have available markets" because they work with many different insurance carriers.

My suggestion would be to google "independent insurance agency [city]", and then look at some of their websites to see if they list multiple carriers, like Chubb, CNA, Hartford, Liberty Mutual, Progressive, Travelers, etc., and make some calls.

[Villanelle]

I work in P&C insurance, although not specifically in personal lines or CA.

Generally speaking, you shouldn't have a problem with that experience letter. Your buyers might run into trouble if they get a weird agent or something, but it is pretty standard.

However, State Farm is not an "independent" insurance company. "Independent" insurance agents work with multiple carriers, and because of that can find coverage for more hard-to-place risks. If you talked to, say, an Allstate or Farmers agent, they're going to tell you "sorry, nothing I can do, [Allstate/Farmers] isn't writing new in CA." BUT if you talk to a local independent agent, they might say "Yeah, some of our carriers have pulled out, but we still have available markets" because they work with many different insurance carriers.

My suggestion would be to google "independent insurance agency [city]", and then look at some of their websites to see if they list multiple carriers, like Chubb, CNA, Hartford, Liberty Mutual, Progressive, Travelers, etc., and make some calls.

Thanks, this is super helpful, and your comment on the letter is very encouraging as well.  I mentioned State Farm because that's who the buyers (who are now no longer buyers) finally got a quote from.  I'm up to my eyeballs in prep for the most stressful move evah (moving out due to lease ending; don't yet know where we are moving to--not even what city or state--among other complications) and my plate is massively full.  I'm hoping our RE agent will do some of this.  If not, I guess I will find some space on my plate next week and dig in on this. 

[merula]

One strategy would be to find 20 minutes or so to write up an email asking "Do you have any carriers willing to write homeowners at [address]?" and fire it off to the top 5-10 independent agents you were able to find on Google, and then you can sort through responses when you finally have the space on your plate.

Best of luck! This is a crappy situation to be in, and I'm not sure it was really anyone's fault other than humankind's collective fault for climate change. The CA Department of Insurance has long seen their role as protecting the little guy from big bad insurance companies (admirably). The problem is, there's now no way to comply with DOI requirements AND make money, so carriers as for-profit entities are opting out (which is also rational on their parts).

[Sibley]

Lower the price.

[Villanelle]

Lower the price.

LOL.  Thanks?  The issue is the *INCORRECT* information in the insurance database and whether there is any way to address that.  So we don't have to lower the price, which is otherwise quite fair, if not slightly low.

If it's not selling on its actual merits (and flaws), then yes, we will lower the price.  But when the issue is incorrect information, don't you think it first makes sense to try to address that in some way that makes the market value of the house match... the actual market value of the house?  It's not like I'm saying, "it would be worth $950k with a new roof, so why can't I sell it for $950k?" 

We are back in escrow (after 2 days back on the market, due in part, to... it being very well-priced). Mostly, I'm holding my breath that this "claims experience letter" works its magic like my insurance company says it will, and with that, the place is insurable and for rates not much worse than any other CA property. 

[spartana]

Mostly PTF as Im likely to be in a similar situation. Plan to put house on the market in July and it seems there are no insurers that will write new policies - or maybe write then at exorbitant prices - and won't write wild fire or flood insurance at all. This is a mountain town in Calif that is impacted by both those things and it seems no banks will loan the money without them. I bought with cash and just have a regular HO policy plus an earthquake policy (which thru the state and not insurance companies). Really not sure how much of an issue this will be but want to be prepared.  Any advice? I don't want to do seller financing so think only a cash buyer willing to self-insure is the only way I can get a buyer.

[couponvan]

I came here to say what @MaybeBabyMustache said. Find an insurer and offer a credit to get them to the 5 year claim free point where the insurers won’t have that ding on the record.

[GilesMM]

Mostly PTF as Im likely to be in a similar situation. Plan to put house on the market in July and it seems there are no insurers that will write new policies - or maybe write then at exorbitant prices - and won't write wild fire or flood insurance at all. This is a mountain town in Calif that is impacted by both those things and it seems no banks will loan the money without them. I bought with cash and just have a regular HO policy plus an earthquake policy (which thru the state and not insurance companies). Really not sure how much of an issue this will be but want to be prepared.  Any advice? I don't want to do seller financing so think only a cash buyer willing to self-insure is the only way I can get a buyer.

How do you know that no insurers will write new policies?  Is it something you read or overheard or have you had an agent check with every company in Calif?  It could be that it is difficult but that there are still a few insurers out there writing policies at reasonable rates.  It's getting harder in Calif but not yet impossible in most areas.


Good news is that cash only sales are getting more common all the time, especially in California.

[Dicey]

Y'all know there's no inventory in most parts of CA, right? Lowering the price is NOT the best answer, IMO.

Villanelle, ping me if you want the name of our insurance broker.

Last week my friend told me their home and car insurance had been dropped after 28 years with AAA. A week later, my broker has hooked her up with [another well-known company, only available through brokers] for a substantial savings.

[FINate]

I would try to get a reasonable insurance quote and include this with the documents provided to prospective buyers. The goal is to remove the surprise and prevent buyers from backing out.

I did something similar once with a house that needed a new roof. People would assume it's super expensive to replace and/or get quotes from the most expensive contractor in town, so we provided a quote from a more reasonable contractor which made it a non-issue.

[spartana]

Mostly PTF as Im likely to be in a similar situation. Plan to put house on the market in July and it seems there are no insurers that will write new policies - or maybe write then at exorbitant prices - and won't write wild fire or flood insurance at all. This is a mountain town in Calif that is impacted by both those things and it seems no banks will loan the money without them. I bought with cash and just have a regular HO policy plus an earthquake policy (which thru the state and not insurance companies). Really not sure how much of an issue this will be but want to be prepared.  Any advice? I don't want to do seller financing so think only a cash buyer willing to self-insure is the only way I can get a buyer.

How do you know that no insurers will write new policies?  Is it something you read or overheard or have you had an agent check with every company in Calif?  It could be that it is difficult but that there are still a few insurers out there writing policies at reasonable rates.  It's getting harder in Calif but not yet impossible in most areas.


Good news is that cash only sales are getting more common all the time, especially in California.

Lots of stories from various media sources, including insurance companies themselves, about not offering new HO policies or pulling out of the CA market altogether. But mainly wildfire insurance when living in a very high risk area (risk levels are accessed by Calfire) has been impossible to get even at very high prices. There's a state program FAIR that offers it, like they do earthquake insurance, but again expensive.

[merula]

Hard to insure and impossible to insure are miles apart. It's hard to insure a bar, but there are tens of thousands of bars across the country and all of them have insurance.

Independent insurance agents and brokers know how to place coverage for a variety of exposures; that's a huge chunk of their job. (The only bigger part would be schmoozing, IMHO, but of course I'm going to say that as a carrier person.) @spartana , if you're anywhere near Dicey I would get that broker referral, or otherwise put it out to your network that you're looking for referrals.

Insurance is expensive if the risk is expensive. Insurance is just a financial mechanism, like mortgages. The insurance companies are assessing the overall risk to homeowners in California, dividing the expected costs by the number of policyholders, adding in their profit and charging accordingly. The CA-specific problems are that the overall risks have increased dramatically in a fairly short time primarily as a result of climate change, and the CA department of insurance has (in their efforts to protect the little guy) made it nearly impossible to achieve the profit demanded by insurers as publicly-traded capitalist entities, leading to a lot of market exits. That in itself is kind of remarkable; most industries bow to CA regulations.

I know that's cold comfort to anyone going through it, and I'm sorry. There's not really an insurance fix until someone fixes either the climate problem or capitalism. (Or preferably both, IMHO.)

[Villanelle]

I'm pretty frustrated with our RE agent, but we are getting close on this sale, though not of the woods yet.  They got a quote from Lemonade insurance.  Somehow, Lemonade got a copy of the home inspection--maybe they required it?  Anyway, they have asked that some very small things get fixed before they will write an official policy, so we are doing about $1000 in repairs.  Could still fall through, but all other contingencies have been removed. 

[Dicey]

That's good progress. There several never-heard-of-'em companies stepping the breach besides Lemonade. Amica and Bamboo are two others that come to mind. This is a solvable probem.

[Villanelle]

That's good progress. There several never-heard-of-'em companies stepping the breach besides Lemonade. Amica and Bamboo are two others that come to mind. This is a solvable probem.

It is.  I just which my RE agent was more proactive.  It was in our contract with our property management company that if we sell, we have to use them.  He was a great PM (overseeing a minion who did most of the grunt work, in part because the PM spend his time on selling), so we felt comfortable when we signed the contract.  But it really seems like he's just sort of letting shit happen, rather than being proactive.

Life is a massive ball of stress, and I really, really need this sale off my plate.

[spartana]

Hard to insure and impossible to insure are miles apart. It's hard to insure a bar, but there are tens of thousands of bars across the country and all of them have insurance.

Independent insurance agents and brokers know how to place coverage for a variety of exposures; that's a huge chunk of their job. (The only bigger part would be schmoozing, IMHO, but of course I'm going to say that as a carrier person.) @spartana , if you're anywhere near Dicey I would get that broker referral, or otherwise put it out to your network that you're looking for referrals.

Insurance is expensive if the risk is expensive. Insurance is just a financial mechanism, like mortgages. The insurance companies are assessing the overall risk to homeowners in California, dividing the expected costs by the number of policyholders, adding in their profit and charging accordingly. The CA-specific problems are that the overall risks have increased dramatically in a fairly short time primarily as a result of climate change, and the CA department of insurance has (in their efforts to protect the little guy) made it nearly impossible to achieve the profit demanded by insurers as publicly-traded capitalist entities, leading to a lot of market exits. That in itself is kind of remarkable; most industries bow to CA regulations.

I know that's cold comfort to anyone going through it, and I'm sorry. There's not really an insurance fix until someone fixes either the climate problem or capitalism. (Or preferably both, IMHO.)

TBH I never really thought it would be a problem when trying to sell until this thread and another from @Dicey about insurance Co. pulling out of the Calif market. I have State Farm and don't pay much so just assumed they do a new policy for a new owner if I sold. I hadn't even realized that could be an issue! I hadn't planned to sell now but several things have lead to making the decision to do it now and trying to get the ducks in a row.

[Villanelle]

Hard to insure and impossible to insure are miles apart. It's hard to insure a bar, but there are tens of thousands of bars across the country and all of them have insurance.

Independent insurance agents and brokers know how to place coverage for a variety of exposures; that's a huge chunk of their job. (The only bigger part would be schmoozing, IMHO, but of course I'm going to say that as a carrier person.) @spartana , if you're anywhere near Dicey I would get that broker referral, or otherwise put it out to your network that you're looking for referrals.

Insurance is expensive if the risk is expensive. Insurance is just a financial mechanism, like mortgages. The insurance companies are assessing the overall risk to homeowners in California, dividing the expected costs by the number of policyholders, adding in their profit and charging accordingly. The CA-specific problems are that the overall risks have increased dramatically in a fairly short time primarily as a result of climate change, and the CA department of insurance has (in their efforts to protect the little guy) made it nearly impossible to achieve the profit demanded by insurers as publicly-traded capitalist entities, leading to a lot of market exits. That in itself is kind of remarkable; most industries bow to CA regulations.

I know that's cold comfort to anyone going through it, and I'm sorry. There's not really an insurance fix until someone fixes either the climate problem or capitalism. (Or preferably both, IMHO.)

TBH I never really thought it would be a problem when trying to sell until this thread and another from @Dicey about insurance Co. pulling out of the Calif market. I have State Farm and don't pay much so just assumed they do a new policy for a new owner if I sold. I hadn't even realized that could be an issue! I hadn't planned to sell now but several things have lead to making the decision to do it now and trying to get the ducks in a row.

My problem is 100% based on the incorrect in an insurance database.  Otherwise, we'd be fine.  (We aren't in a huge "danger zone" for any issues, though it's probably more fire-friendly than some areas.  But it's not Malibu.)  One insurer asked the current buyers to get records of the repairs, and when the repairs receipts we provided were only about $30k and the database says $80k, the insurer wanted "the rest of the receipts", which don't exist.  Because there was no $80k claim(s).  The letter from my insurance company saying  there was only 1 claim and that claim was only about $25k (our receipts were $30, because we did some upgrades outside the insurance, like replacing the damaged linoleum floor with tile), wasn't sufficient.  So I wouldn't be too worried about selling if you don't have a claims history and aren't in a high-fire area.

That said, insurance concerns were one of the tipping points for our decision to sell.  The property made money as a rental (though the return was shitty if you consider all the equity, since we only have about $150k left on the loan, and it's selling for >$900k.  But I wanted to be done being a landlord, we wanted to get the equity to buy a residence, and I feel like CA insurance and other climate issues aren't getting better. OUr agent did mention that in his years of experience, insurance has never come up, and now we are the second in less than a year.  The other one was just a lender saying they needed proof that the buyers could get a sufficient policy, before they'd write the loan, or something like that.  So insurance in regard to buying does seem to be heating up.  But again, it's the fact that we have a semi-large claim, and really the fact that the database insurance companies use makes that claim look like 2 claims and much, much worse.  Or we'd be fine. 

I could use all the good vibes that we make it through this and close escrow in a couple weeks! 

[spartana]

^^^ No previous claims but in what Cal Fire designates as "A Very High Fire Severity Zone" and it seems difficult to get insurance coverage (at least wildfire coverage which is separate from HO coverage) so may end up being a problem. I do have to submit some documents from Cal Fire showing fire risks and that I have defensible space but that's all I could find. Guess I'll call my insurer to see if they'd insure a new owner so I don't get caught like you guys did. My value is in the land rather than the old house so maybe that'll be a factor.

[Villanelle]

^^^ No previous claims but in what Cal Fire designates as "A Very High Fire Severity Zone" and it seems difficult to get insurance coverage (at least wildfire coverage which is separate from HO coverage) so may end up being a problem. I do have to submit some documents from Cal Fire showing fire risks and that I have defensible space but that's all I could find. Guess I'll call my insurer to see if they'd insure a new owner so I don't get caught like you guys did. My value is in the land rather than the old house so maybe that'll be a factor.

I assume it would likely be a developer who'd buy for the land.  (Or someone intending to build a home.)  Either way, the ability--or inability--to get insurance, would potentially matter.  Calling around to see if insurers would write on the property today might ease your mind (or push you to sell ASAP, since it's likely only getting worse).   

You can also consider offering insurance pay downs, or similar.  But my quick research suggests that this could just as easily be a red-flag for potential buyers, since it says, "this place is hard to insure", if it's in the listing. 

[spartana]

^^^ No previous claims but in what Cal Fire designates as "A Very High Fire Severity Zone" and it seems difficult to get insurance coverage (at least wildfire coverage which is separate from HO coverage) so may end up being a problem. I do have to submit some documents from Cal Fire showing fire risks and that I have defensible space but that's all I could find. Guess I'll call my insurer to see if they'd insure a new owner so I don't get caught like you guys did. My value is in the land rather than the old house so maybe that'll be a factor.

I assume it would likely be a developer who'd buy for the land.  (Or someone intending to build a home.)  Either way, the ability--or inability--to get insurance, would potentially matter.  Calling around to see if insurers would write on the property today might ease your mind (or push you to sell ASAP, since it's likely only getting worse).   

You can also consider offering insurance pay downs, or similar.  But my quick research suggests that this could just as easily be a red-flag for potential buyers, since it says, "this place is hard to insure", if it's in the listing.

My neighbors may know as a couple of places across from me have been mcmansionized and added 2 ADUs to each house to turn into Airbnbs (yet another reason to leave asap!) so may know more. Most owners don't live here full time (resort area) so maybe their set up is different. I'm willing to sell at a lower price to make a fast sale (hopefully cash). Your situation sounds tough though as it seems the wrong info is likely going to hold up your sale and nothing you can do to (yet) to change it to the correct info. Good to have back up offers but they may have the same problem.

[tj]

Mostly PTF as Im likely to be in a similar situation. Plan to put house on the market in July and it seems there are no insurers that will write new policies - or maybe write then at exorbitant prices - and won't write wild fire or flood insurance at all. This is a mountain town in Calif that is impacted by both those things and it seems no banks will loan the money without them. I bought with cash and just have a regular HO policy plus an earthquake policy (which thru the state and not insurance companies). Really not sure how much of an issue this will be but want to be prepared.  Any advice? I don't want to do seller financing so think only a cash buyer willing to self-insure is the only way I can get a buyer.

Didn't you just buy that place? Why are you bailing already?

[spartana]

Mostly PTF as Im likely to be in a similar situation. Plan to put house on the market in July and it seems there are no insurers that will write new policies - or maybe write then at exorbitant prices - and won't write wild fire or flood insurance at all. This is a mountain town in Calif that is impacted by both those things and it seems no banks will loan the money without them. I bought with cash and just have a regular HO policy plus an earthquake policy (which thru the state and not insurance companies). Really not sure how much of an issue this will be but want to be prepared.  Any advice? I don't want to do seller financing so think only a cash buyer willing to self-insure is the only way I can get a buyer.

Didn't you just buy that place? Why are you bailing already?

I bought it a year ago after about 2 or 3 years of renting and travelling. Didn't want to rent any longer for various reasons  so I bought. Had planned to stay there longer - at least 2 years - but BF and I decided to buy a place together elsewhere (had separate homes but mostly lived together and he just sold his place which he airbnbed) so selling now.

ETA: Also 2 houses across the street from me have been mcmansionized and have had 2 ADUs each added on and the whole place will to do short term rentals. Ones been operating since winter and the sleepily little street is now a crazy place. The second house directly across from me is almost done (main house done and ADUs almost complete) to add to the STR market. Movers brought the furniture for the now-ginoramus main house yesterday in 2 huge trucks. I counted 10 beds plus at least 4 or 5 fold up beds like hotel have and 2 full living room sets etc. So things have changed fast and I wouldn't want to continue to live here anymore anyway. Plus BF isn't too fond of the cold and like ya know dude, lack of gnarly surfing ;-)

[tj]

Mostly PTF as Im likely to be in a similar situation. Plan to put house on the market in July and it seems there are no insurers that will write new policies - or maybe write then at exorbitant prices - and won't write wild fire or flood insurance at all. This is a mountain town in Calif that is impacted by both those things and it seems no banks will loan the money without them. I bought with cash and just have a regular HO policy plus an earthquake policy (which thru the state and not insurance companies). Really not sure how much of an issue this will be but want to be prepared.  Any advice? I don't want to do seller financing so think only a cash buyer willing to self-insure is the only way I can get a buyer.

Didn't you just buy that place? Why are you bailing already?

I bought it a year ago after about 2 or 3 years of renting and travelling. Didn't want to rent any longer for various reasons  so I bought. Had planned to stay there longer - at least 2 years - but BF and I decided to buy a place together elsewhere (had separate homes but mostly lived together and he just sold his place which he airbnbed) so selling now.

ETA: Also 2 houses across the street from me have been mcmansionized and have had 2 ADUs each added on and the whole place will to do short term rentals. Ones been operating since winter and the sleepily little street is now a crazy place. The second house directly across from me is almost done (main house done and ADUs almost complete) to add to the STR market. Movers brought the furniture for the now-ginoramus main house yesterday in 2 huge trucks. I counted 10 beds plus at least 4 or 5 fold up beds like hotel have and 2 full living room sets etc. So things have changed fast and I wouldn't want to continue to live here anymore anyway. Plus BF isn't too fond of the cold and like ya know dude, lack of gnarly surfing ;-)

Yikes, that doesn't fun at all. Are you headed back to a beach?

[spartana]

Mostly PTF as Im likely to be in a similar situation. Plan to put house on the market in July and it seems there are no insurers that will write new policies - or maybe write then at exorbitant prices - and won't write wild fire or flood insurance at all. This is a mountain town in Calif that is impacted by both those things and it seems no banks will loan the money without them. I bought with cash and just have a regular HO policy plus an earthquake policy (which thru the state and not insurance companies). Really not sure how much of an issue this will be but want to be prepared.  Any advice? I don't want to do seller financing so think only a cash buyer willing to self-insure is the only way I can get a buyer.

Didn't you just buy that place? Why are you bailing already?

I bought it a year ago after about 2 or 3 years of renting and travelling. Didn't want to rent any longer for various reasons  so I bought. Had planned to stay there longer - at least 2 years - but BF and I decided to buy a place together elsewhere (had separate homes but mostly lived together and he just sold his place which he airbnbed) so selling now.

ETA: Also 2 houses across the street from me have been mcmansionized and have had 2 ADUs each added on and the whole place will to do short term rentals. Ones been operating since winter and the sleepily little street is now a crazy place. The second house directly across from me is almost done (main house done and ADUs almost complete) to add to the STR market. Movers brought the furniture for the now-ginoramus main house yesterday in 2 huge trucks. I counted 10 beds plus at least 4 or 5 fold up beds like hotel have and 2 full living room sets etc. So things have changed fast and I wouldn't want to continue to live here anymore anyway. Plus BF isn't too fond of the cold and like ya know dude, lack of gnarly surfing ;-)

Yikes, that doesn't fun at all. Are you headed back to a beach?

Yeah but not sure where yet. Not OC again but here now looking anyways. Both have family and friends here. No rush to buy again (and the prices - ACK!) But maybe central coast area.  This thread has motivated me to make we can actually get insurance in CA on a new place.

[tj]

Mostly PTF as Im likely to be in a similar situation. Plan to put house on the market in July and it seems there are no insurers that will write new policies - or maybe write then at exorbitant prices - and won't write wild fire or flood insurance at all. This is a mountain town in Calif that is impacted by both those things and it seems no banks will loan the money without them. I bought with cash and just have a regular HO policy plus an earthquake policy (which thru the state and not insurance companies). Really not sure how much of an issue this will be but want to be prepared.  Any advice? I don't want to do seller financing so think only a cash buyer willing to self-insure is the only way I can get a buyer.

Didn't you just buy that place? Why are you bailing already?

I bought it a year ago after about 2 or 3 years of renting and travelling. Didn't want to rent any longer for various reasons  so I bought. Had planned to stay there longer - at least 2 years - but BF and I decided to buy a place together elsewhere (had separate homes but mostly lived together and he just sold his place which he airbnbed) so selling now.

ETA: Also 2 houses across the street from me have been mcmansionized and have had 2 ADUs each added on and the whole place will to do short term rentals. Ones been operating since winter and the sleepily little street is now a crazy place. The second house directly across from me is almost done (main house done and ADUs almost complete) to add to the STR market. Movers brought the furniture for the now-ginoramus main house yesterday in 2 huge trucks. I counted 10 beds plus at least 4 or 5 fold up beds like hotel have and 2 full living room sets etc. So things have changed fast and I wouldn't want to continue to live here anymore anyway. Plus BF isn't too fond of the cold and like ya know dude, lack of gnarly surfing ;-)

Yikes, that doesn't fun at all. Are you headed back to a beach?

Yeah but not sure where yet. Not OC again but here now looking anyways. Both have family and friends here. No rush to buy again (and the prices - ACK!) But maybe central coast area.  This thread has motivated me to make we can actually get insurance in CA on a new place.

No kidding on the insurance. Good luck!

[Villanelle]

I probably should keep my mouth shut (and my fingers off the keyboard), but the final contingency--that they get insurance--has been removed.  So, their deposit is now non-refundable, and presumably, they also just want to get this over with and own a home. Original closing date was supposed to be the 29th, and it looks like, with some luck, we will either hit that, or be close. (please please please please please)

My life is STRESS right now, with a million balls in the air, and it will be so, so, so nice to have that only be 999,999 balls, once/is/when this place is sold.

[RWD]

Congrats! Selling a house is stressful enough without a major hiccup like this.

[tj]

I probably should keep my mouth shut (and my fingers off the keyboard), but the final contingency--that they get insurance--has been removed.  So, their deposit is now non-refundable, and presumably, they also just want to get this over with and own a home. Original closing date was supposed to be the 29th, and it looks like, with some luck, we will either hit that, or be close. (please please please please please)

My life is STRESS right now, with a million balls in the air, and it will be so, so, so nice to have that only be 999,999 balls, once/is/when this place is sold.

Congrats. Hopefully the $$$ lets you invest in some stress relief! :)

[spartana]

Congrats also. Does that kean their mortgage company didn't insist they be able to get insurance,  or they are willing to pay a large amount for coverage, or paying cash, or just that weird inconsistency on the claims was lifted?  Either way it will likely close asap.

Meanwhile in Spartanaville I'm watching a giant dump truck being filled with the remaining construction debris from the last of the 2 ADU and main house being built across from me and more furniture coming in for the future airbnbers. UGH. We should meet on a beach for drinks to de-stress! Fortunately there's no hurry and we already moved everything out we'll take with us so can go up for sale now.

[Villanelle]

Congrats also. Does that kean their mortgage company didn't insist they be able to get insurance,  or they are willing to pay a large amount for coverage, or paying cash, or just that weird inconsistency on the claims was lifted?  Either way it will likely close asap.

Meanwhile in Spartanaville I'm watching a giant dump truck being filled with the remaining construction debris from the last of the 2 ADU and main house being built across from me and more furniture coming in for the future airbnbers. UGH. We should meet on a beach for drinks to de-stress! Fortunately there's no hurry and we already moved everything out we'll take with us so can go up for sale now.

They are getting insurance.  IDK if the Claims Experience Letter helped, or if they are paying a boatload, or if this insurer is just cheaper/less concerned about the history for some reason.  So I don't really have an answer.

I will not be sad to no longer be a landlord or CA property owner.

[spartana]

Congrats also. Does that kean their mortgage company didn't insist they be able to get insurance,  or they are willing to pay a large amount for coverage, or paying cash, or just that weird inconsistency on the claims was lifted?  Either way it will likely close asap.

Meanwhile in Spartanaville I'm watching a giant dump truck being filled with the remaining construction debris from the last of the 2 ADU and main house being built across from me and more furniture coming in for the future airbnbers. UGH. We should meet on a beach for drinks to de-stress! Fortunately there's no hurry and we already moved everything out we'll take with us so can go up for sale now.

They are getting insurance.  IDK if the Claims Experience Letter helped, or if they are paying a boatload, or if this insurer is just cheaper/less concerned about the history for some reason.  So I don't really have an answer.

I will not be sad to no longer be a landlord or CA property owner.

I hear ya! Thinking of going the rental route ourselves (even if it scares me a bit) instead of buying right away but would never be a landlord anywhere - especially not in CA.

[spartana]

Just saw this in the news: https://ktla.com/news/california/state-farm-seeks-major-increase-in-home-insurance-rates-sparks-concerns/

This will like make it harder and more expensive to get a new policy in Calif.:

State Farm (my insurer) has asked for big increases. I heard that besides HO and renters insurance they are asking for major auto insurance increases too. My house is going up for sale this week so won't have to worry but it's a sign they might be in financial trouble too. I have HO, non-car owners liability, umbrella, and earthquake thru them. Will be glad once I can dump all that! At least for awhile.

ETA that they also said housing prices are at an all time high with the median price in Calif at arou d $910k. Lose a bunch of properties to fires and floods and I'd be bailing out of the Calif insurance market too if I was an insurance Co.

[tj]

Just saw this in the news: https://ktla.com/news/california/state-farm-seeks-major-increase-in-home-insurance-rates-sparks-concerns/

This will like make it harder and more expensive to get a new policy in Calif.:

State Farm (my insurer) has asked for big increases. I heard that besides HO and renters insurance they are asking for major auto insurance increases too. My house is going up for sale this week so won't have to worry but it's a sign they might be in financial trouble too. I have HO, non-car owners liability, umbrella, and earthquake thru them. Will be glad once I can dump all that! At least for awhile.

ETA that they also said housing prices are at an all time high with the median price in Calif at arou d $910k. Lose a bunch of properties to fires and floods and I'd be bailing out of the Calif insurance market too if I was an insurance Co.

Yup. Makes me hesitate to buy property in CA. USAA is still by far the cheapest option for me in this state though. Nobody else even comes close. Not sure why.

[Villanelle]

Final update:
We closed on Friday.  In retrospect, I think the combination it skittish buyers (likely first-timers) and our barely mediocre agent probably meant the first sale fell through when it could have worked out.  It's fine--we got the same price and were back in escrow in about 3 days.  And the second buyers (who made it to close) did have some insurance complications, but nothing drastic.  We had to do about $900 in repairs.  Okay, cool.  And we made it contingent on the removal of all contingencies, so basically, we didn't pay them back for them until they were done and their deposit was locked in.  They said that was required by the insurer (Lemonade).  I'm not convinced that was true, but for >$1000, I didn't care if it was. 

So the terror from the first time (fed by our not-great agent), was perhaps overblown. 

[Catbert]

Yay on getting it closed.

[spartana]

Congrats! Glad it's (almost) over. Hope no fires happen before escrow closes with the big heat right now. Your OP sent me down the insurance worm hole and I learned a lot. it's not pretty.

[Villanelle]

Congrats! Glad it's (almost) over. Hope no fires happen before escrow closes with the big heat right now. Your OP sent me down the insurance worm hole and I learned a lot. it's not pretty.

We are closed.  Fires are officially someone else's problem.  I canceled our insurance on the house yesterday, effective the day after closing (so through last Saturday). 

I definitely agree on the "not pretty" assessment though. We were somewhat on the fence about selling or continuing to rent.  I suspect we'd have sold anyway, but threads here about insurance got my brain going in that direction, and like you, as I learned more, I saw trouble down the road. I figure escalating insurance costs, increasingly uninsurable homes, and more climate-based home destruction would all lead to plummeting house values and I wanted to be out before we were racing to the bottom. It is a weight lifted to not only no longer be a landlord, but also to be out of the CA RE market.  I love so many things about SoCal and San Diego, but it was time to stage left, before I was doing so chased by a bear. 

[spartana]

Congrats! Glad it's (almost) over. Hope no fires happen before escrow closes with the big heat right now. Your OP sent me down the insurance worm hole and I learned a lot. it's not pretty.

We are closed.  Fires are officially someone else's problem.  I canceled our insurance on the house yesterday, effective the day after closing (so through last Saturday). 

I definitely agree on the "not pretty" assessment though. We were somewhat on the fence about selling or continuing to rent.  I suspect we'd have sold anyway, but threads here about insurance got my brain going in that direction, and like you, as I learned more, I saw trouble down the road. I figure escalating insurance costs, increasingly uninsurable homes, and more climate-based home destruction would all lead to plummeting house values and I wanted to be out before we were racing to the bottom. It is a weight lifted to not only no longer be a landlord, but also to be out of the CA RE market.  I love so many things about SoCal and San Diego, but it was time to stage left, before I was doing so chased by a bear.

Oh I hear you! Owning in an extreme fire risk zone (not to mention other natural disaster zone) is pretty worrisome right now. My place is on the market now (and BFs place sold in May) so I'm in that agitated state where I just want to be done. The high heat and dry brush right now is scary! I love the little place but it was only suppose to be for a couple of years then I'd move elsewhere anyways. My insurance did go up by quite a bit but because I don't have wildfire insurance - just regular HOs insurance which doesn't cover wildfires  - I'd lose it all. Down on the coast now and will start looking for a rental "somewhere" rather then buy again at this time. I've had problems renting solo in the past due to a lower FIRE income but pooling our incomes will eliminate that problem.

[GilesMM]

A lightning fire 50 meters from our barn last August was the final straw for us. It could have ignited many acres of 60 foot firs along with our home. Tens of millions of people live in western fire zones but we don’t want the extra risk of a forest in our yard, no hydrant, and a fire station 25 minutes away.