The Housing Market Didn’t Need Another Problem
Now homeowners in California are having to deal with the lack of insurance carriers providing homeowners insurance.
There is another issue that is starting to have an effect upon the housing market and it has nothing to do with inventory, mortgage rates, or affordability.
There are certain specific markets in the United States that represent significant vulnerability to weather and natural events, including fire events. At the end of January, the Hartford Insurance Company made the decision to no longer issue new homeowner insurance policies in California beginning in February 2024.
The company will continue to honor those policies that were or are in effect but they are not going to be writing any new policies. They are not the only insurance company to walk away from writing new homeowner policies in the state of California; State Farm and Allstate also pulled out of California, citing the increased risk from wildfires, which make writing policies of greater risk than the company was willing to consider. According to an article, there were 1.265 million California homes at risk to extreme wildfires in 2022.
There are other insurance companies that have joined Allstate, Hartford and State Farm, but they are not in the same size as those three major companies.
And in Florida many homeowners have seen their homeowners insurance climb in one year alone by 40%. Homeowners insurance in Florida is more than three-and-a-half times the national average. The biggest reason for the cost is what has been known as hurricane alley. It’s not only the risk from storms but in some cases the sea level rise is also becoming a factor.
With the cost of construction climbing nearly 40% over the last 5 years or so, premiums are also beginning to rise. There are 5 new insurance companies that have been cleared to write homeowners policies in Florida, but that will take a little time before it takes effect.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single-family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.
Connect with Ralph on LinkedIn: https://www.linkedin.com/in/ralphaponte/