What Homebuyers Really Ask About Insurance

—and How You Can Help Them Get Answers Fast

As a real estate agent or mortgage professional, you're often the first point of contact for clients navigating the complexities of purchasing a home. With recent changes in California's homeowners insurance market, it's important to stay informed and help your clients navigate their options confidently.

Recent Developments in California's Homeowners Insurance Market

In early 2025, California experienced significant wildfires, including the devastating Palisades Fire, which destroyed over 6,800 structures and resulted in substantial insurance claims. These events have intensified the challenges within the state's insurance market:

• Insurer Withdrawals: Major insurers, such as State Farm, have reduced their presence in California, citing increased wildfire risks and financial losses.
• FAIR Plan Strain: The California FAIR Plan, designed as a last-resort insurance option, has seen a surge in policyholders, doubling since 2020. This influx has strained its resources, leading to discussions about potential surcharges for homeowners.
• Regulatory Changes: The state has introduced reforms allowing insurers to use advanced catastrophe models for rate setting, aiming to stabilize the market and encourage insurer participation.

Common Insurance Questions from Homebuyers

When should I start shopping for homeowners insurance?

Advise clients to begin the insurance process early, ideally once they're in escrow. Early engagement helps identify potential issues, such as high-risk property designations, that could affect coverage availability or cost.

How much coverage do I need?

Emphasize the importance of insuring the replacement cost of the home, not just its market value. Given recent underinsurance issues highlighted by wildfire losses, accurate coverage is more important than ever.

Can I bundle home and auto insurance for savings?

Yes, bundling can lead to significant discounts. Encourage clients to explore bundling options, which can also streamline their insurance management.

What about flood or earthquake coverage?

Standard homeowners policies typically exclude flood and earthquake damage. Given California's susceptibility to these events, clients should consider additional policies to guarantee comprehensive protection.

How quickly can I get proof of insurance?

Working with responsive insurance providers can expedite the issuance of insurance binders, preventing delays in the closing process.

The Hidden Insurance Issues That Can Delay a Closing

Even if your buyer is pre-approved and ready, the property itself can trigger last-minute insurance issues. Here’s what we’re seeing regularly:

• Old Roofs = Higher Premiums or Denials

Insurers are flagging any roof over 10–20 years, especially in high-risk zones. Some refuse to write the policy altogether.

We’ll alert buyers early if the roof age is an issue—and explore options like higher deductibles or limited roof coverage.

• Mandatory Water Shut-Off Valves

Due to the rise in water damage claims, some carriers now require a whole-house automatic shut-off valve to bind coverage.

We tell buyers exactly what qualifies, connect them with licensed plumbers if needed, and make sure this doesn’t become a closing-day surprise.

• Missing Supplemental Coverage

Some buyers assume “homeowners insurance” means “everything insurance.” But if they’re in a floodplain or near a fault line, they’re exposed.

We quote supplemental flood and earthquake policies and explain real-world risks, clearly.

We Count On Our Referral Partners

As a referral partner, your job is to get deals across the finish line. We make sure insurance isn’t the thing that slows you—or your clients—down.

• We educate without overwhelming
• We move fast and communicate clearly
• We help clients feel confident, not confused
• We don’t delay your closing—we protect it

Enhancing Your Client Services

By staying informed about the current insurance climate and partnering with proactive insurance professionals, you can:

• Provide Timely Referrals: Connect clients with insurance agents who understand the nuances of the California market and can offer tailored advice.
• Facilitate Smooth Closings: Early insurance engagement helps prevent last-minute surprises that could derail transactions.
• Build Trust: Demonstrating knowledge of insurance considerations enhances your credibility and value to clients.

Partner with Us

We're committed to supporting real estate professionals by providing:

• Customized Insurance Solutions: Tailored policies that meet the unique needs of each client.
• Educational Resources: Up-to-date information on insurance trends and regulations.
• Collaborative Support: A partnership approach to guarantee your clients receive comprehensive coverage without complications.

See how we spotlight and support our partners to help grow their business.