A question I get asked every day is what is going on with homeowners insurance in San Diego.  It’s a complex subject that has become a barrier or at least another obstacle to owning a home in California.  San Diego is already a very competitive market for buyers to purchase homes.  Having the added hurdle of finding a company to insure your new home has become a serious concern.

You have to go back to why this is happening specifically in California.  It’s no surprise to anyone at this point that California is a very expensive state to own a home in.  Aside from the high purchase price for homes, especially in major market areas like San Diego, Los Angeles, and the San Francisco Bay Area, we also have a rise in natural disasters. Specifically wildfires and more recently, flooding, have all been factors contributing to the mass exodus of insurance companies leaving homeowners high and dry in California. Insurance companies no longer find California a profitable state to insure in with the high costs to rebuild after a potential natural disaster. California’s largest insurer, State Farm stopped selling new policies in May (). State Farm accounted for 20% of the market in 2021 alone. Allstate another huge company stopped insuring new customers in June 2023 ().  Farmers insurance started capping the amount of insurance policies in November 2023 ().

So what can you do when you are buying a new home in California? Unless you are paying cash, your lender will require that you have homeowners insurance before you close on your new property. A good tip is to ask your lender who they recommend.  Lenders will need to have insurers available to close on their loans.  Your lender should be a good referral source for you as a buyer. There are some providers still insuring buyers in California, Liberty Mutual, Hippo, Nationwide, USAA, and Farmers (although limited as mentioned above).  This list is dynamic and most certainly will continue to change as more companies decide to move out of California. It is important as a buyer to stay on top of this as you pursue your home search.  As a current homeowner, you will almost certainly start seeing a rise in your insurance premiums as the companies left in California will need to raise prices to remain profitable. If you ever need advice or a referral for homeowners insurance in San Diego call your trusted local Realtor like Michael Willis!