The state of California is in a severe homeowner’s insurance crisis due to the wildfires that have occurred throughout the state over the last several years. Many of the luxury carriers such as Chubb, AIG, and First Nationwide private client, are no longer writing policies in the state; especially, if the property is in a high-risk fire zone, such as Shady Canyon, Crystal Cove, Laguna Beach, and other areas that abut to open lands or canyons. Companies such as State Farm, Farmers Insurance, and Allstate are limiting the number of homes that they will write insurance for based upon how many properties they currently have covered in that neighborhood; for example, State Farm will not write in Crystal Cove because they already have 25% of those homes insured.
It is imperative that a buyer pursue obtaining homeowners insurance from the onset of their contingency period. Do not remove your insurability contingency‘s without knowing you have some some sort of policy available. There is a recent article in the Los Angeles Times about a buyer that lost their initial deposit of $300,000 because they removed their inspection contingencies, then were unable to get homeowners insurance and subsequently lost their loan commitment.
Good reason to use a local realtor.