As if mortgage rates and high listing prices weren’t enough, homebuyers – and sellers – are facing rapidly rising home insurance costs, if they’re able to get insurance at all.
Early in 2023 both Allstate and State Farm announced they wee no longer writing new homeowner’s policies, primarily due to wildfire risks throughout the state.
In some cases, buyers only alternative is the FAIR Plan which often features higher premiums and more limited coverage.
Home insurance premiums keep rising – up 33.8% from 2018 to 2023 and up 11.3% in 2023 alone – which is causing a great strain on homebuyers, as well as homeowners, but could also have a long-term effect on home values as well.
Given the increase in climate risks throughout the country and given the skyrocketing increase in premiums – or agencies discontinuing coverage in certain areas entirely – this is clearly a problem that is only going to get worse.
It is estimated that nearly half of the homes in the United States are at severe risk from environmental damage that affects nearly $22 trillion in real estate.