A San Francisco Chronicle article reports that price and availability of homeowners insurance in California are creating problems for home sellers and buyers.

In the article, David Russell, professor of insurance at CSU Northridge, observed, “Homeowners insurance used to be a rounding error, depending on where you lived. It’s not that way anymore.”

With the insurance market in turmoil, home sellers are finding that buyers are backing out of real estate deals because they can’t afford or can’t find homeowners insurance coverage. 

A person who is trying to sell her home in Lake County complained, “I feel like I’m at the mercy of the insurance industry. We thought that there wouldn’t be any issues when we went to sell.”   
A Berkeley realtor told the Chronicle, “I think we’re just beginning to understand that (insurance) might be an issue on almost every sale.”

The article notes high insurance premiums can affect a buyer’s ability to secure a loan. 

A Bay Area mortgage agent remarked that some buyers who are preapproved for a mortgage based on out-of-date insurance prices are finding they must pay double what they expected to pay for insurance coverage.

Some buyers are making their offers contingent on finding insurance, but that puts them at a disadvantage in the current tight real estate market.    

The article points out that insurance availability problems are not limited to wildfire areas. 

The article notes that 35% of FAIR Plan policies cover properties not located in wildfire-prone areas. 

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