CA Home Sales Are Failing Due To Insurance Crisis

CALIFORNIA — The number of California Realtors who had a sale fall through due to lack of insurance availability nearly doubled year over year, according to a recent survey.

The amount of Realtors who had a transaction fall out of escrow because of failure to obtain affordable insurance jumped from 6.9 percent in 2023 to 13.4 percent in 2024, according to the California Association of Realtors’ 2024 Housing Market Survey, the results of which were posted online by Politico.

The association received responses from 3,000 Realtors statewide, according to NBC Bay Area.

Of the 13.4 percent of transactions affected by insurance issues, in 74.7 percent of cases insurance was not available for the property and in 17.8 percent of cases the premium was too expensive, according to the survey, which added that 31 percent of buyers in 2024 struggled to get insurance, up from 16 percent in 2023.

Insurers have been pulling back in the Golden State, where they have paid out $1.13 for every dollar taken in over the last decade, Mark Sektnan of the American Property Casualty Insurance Association told Newsweek.

Allstate hiked its homeowners premiums by 34.1 percent on average in August, according to Newsweek, which added that the burden of such increases is expected to be felt by those who own and buy homes.

California Insurance Commissioner Ricardo Lara promised rate change reforms by the end of the year, Newsweek reported Tuesday, adding new rules will require that insurers commit to writing more policies in areas that are underserved.

“We are actively addressing risk reduction, and it's time for insurance companies to recognize these efforts and step up for California” the state Department of Insurance told Newsweek in a statement.