Most sellers think about insurance after the buyer does. That order no longer works. An insurance quote before listing tells you what your buyer will learn anyway, only sooner and on your terms.
Why an Insurance Quote Before Listing Protects Your Price
Buyers now build insurance into their offers. A premium that jumps changes what they can afford to pay. In Altadena, buyers who find standard coverage pay 20 to 40% more than they would for a comparable Pasadena property. FAIR Plan premiums there average $3,089 a year. Those costs land on the buyer’s monthly budget, and the buyer adjusts the offer to match. If you know the number first, you can answer the question before it becomes a negotiation.
How Insurance Problems Pull Deals Out of Escrow
In the California Association of Realtors’ 2024 member survey, 13% of agents reported at least one sale falling out of escrow because the buyer couldn’t find insurance, roughly double the prior year’s 6.9%. That is nearly double the rate from the year before. Lenders require proof of coverage before closing. If the buyer cannot bind a policy, the loan stalls, and the deal often stalls with it. You lose weeks and restart the process.
What to Do Before You List
Start with three steps:
- Ask an independent insurance agent to run a new-business quote on your address. Your current policy tells you little, because a new buyer faces fresh underwriting.
- Find out whether standard carriers will write the property or only the FAIR Plan.
- Share the result with your listing agent before you set the price.
A seller who already holds these answers negotiates from a stronger position. A seller who learns them mid-escrow does not.
Next week, we will look at the same problem from the other side: what buyers should do about insurance before they write an offer.
Jeffrey Kam, MBA
Broker/Owner, Green Street Real Estate
Source: California FAIR Plan Announces 29.1% Rate Hike for Homeowners This Fall, KQED — https://www.kqed.org/news/12094860/california-fair-plan-announces-29-1-rate-hike-for-homeowners-this-fall