Markets With Steady Growth That Still Offer Opportunities at Relative Bargains “They’re being forced into looking at surplus carriers or going through the California FAIR plan, the state’s insurer of last resort.” “If you look at the last two years and the catastrophic wildfires we’ve had, insurers are definitely raising rates, and some long-standing customers are having trouble getting insurance,” said Stephen Kotler, CEO of Brokerage, Western Region for Douglas Elliman. Real estate experts say that now, sky-high fire insurance rates are worrying buyers and killing or delaying some deals. Wildfire destruction in 20 cost insurers more than $24 billion, and in 2019, more than 350,000 homeowners saw their policies cancelled entirely, leaving them to struggle to find affordable new ones. Premiums for fire insurance were complicating real estate transactions before this year. But when buyers are being pressured with 200% fees over the average on fire insurance, it makes it closing deals a lot more difficult.” One of our state’s economic buoys to bounce back from a catastrophe like this has been the real estate industry.
“Our state economy has already been crippled by the coronavirus lockdown. “This has caused us to lose numerous deals,” Mr. The wildfires in California this year have destroyed more than 4 million acres and almost 8,000 buildings, and this unprecedented damage is raising complicated questions about what homeowners can do to mitigate risk and prepare for future wildfire seasons.Īnd as the August Complex blaze continues to impact the northern part of the state, it’s creating an additional hurdle for buyers and sellers: fire insurance rates.Ĭalifornia real estate has shown signs of recovery after the onset of coronavirus caused a decline in sales, but now brokers are concerned that this rebound will be hobbled.Īaron Kirman, founder/CEO of the Aaron Kirman Group at Compass and star of “Listing Impossible” on CNBC, said that he has seen annual fire insurance costs jump from $20,000 to $200,000 during this past quarter.
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