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Imagine finding your dream home — the perfect location at just the right price — only to discover that no insurance company will cover it.
This is becoming increasingly common in California and other high-risk regions across the U.S. Wildfire exposure, aging homes, and shrinking insurance markets are leaving more buyers shocked to learn that traditional insurers simply won’t write a policy. In this episode of Insurance Hour, host Karl Susman tackled one of the toughest questions a buyer can face: What do you do when you can’t get insurance for the house you want to buy? His answer was both a reality check and a practical roadmap.
Why Insurance Companies Refuse to Cover Some Homes
The first step is understanding why coverage isn’t available. Insurance companies exist to sell policies. If they refuse a property, it’s a signal — not random bad luck.
Common reasons include:
- Location risk: Homes in wildfire, flood, or earthquake-prone areas.
- Property condition: Old roofs, outdated electrical systems, or poor maintenance.
- Market limitations: Even well-maintained homes may be declined if insurers have hit capacity in a region.
As Susman explained, sometimes the problem isn’t the house at all — it’s the market. In tight markets, even low-risk homes can be left uninsured when carriers pause new business to control exposure.
Why an Independent Broker Is Essential
If you’re struggling to find coverage, your next call should be to a licensed independent insurance broker. Unlike captive agents who represent one company, independent brokers work with multiple carriers and see exactly why insurers are declining your property.
That feedback is critical. If the issue is the roof, wiring, or proximity to hazards, you’ll know what needs to be fixed to make the home insurable again.
“If multiple carriers are saying no,” Susman warned, “there’s definitely something you should be aware of.”
Using Surplus and Non-Admitted Insurance Markets
When standard (“admitted”) insurers won’t write a policy, brokers may turn to the surplus or non-admitted market. These carriers aren’t licensed in your state but are legally allowed to operate with more underwriting flexibility.
Non-admitted doesn’t mean unsafe — it means fewer regulations and fewer consumer protections.
Advantages include:
- Willingness to insure high-risk homes
- Faster underwriting
- Flexible coverage options
Trade-offs include:
- No state guarantee fund protection
- Fewer regulatory safeguards
- Pricing that can change quickly
Buyers must sign disclosures acknowledging these risks. As Susman put it, these policies aren’t automatically bad — but they demand extra diligence.
Fixable Property Issues That Can Restore Insurability
If multiple insurers decline your home, revisit the property itself. Some red flags — like a 40-year-old roof or outdated wiring — can make insurers walk away even if the home appears sound.
The good news is that many issues are fixable:
- Roof replacement
- Electrical or plumbing upgrades
- Clearing defensible space in wildfire zones
Completing these improvements can often make a previously uninsurable property eligible for multiple competing carriers.
When a Property Is Truly Uninsurable
If no one — not even surplus carriers — will insure the home, that’s a major warning sign.
“If a carrier doesn’t want to insure it,” Susman said plainly, “maybe you don’t want it.”
This is often difficult advice to accept in tight housing markets, but ignoring it can lead to years of financial strain, escalating premiums, repeated non-renewals, or devastating uncovered losses.
How State Regulation Affects Insurance Availability
Susman tied the issue to the McCarran-Ferguson Act of 1945, which established that insurance is regulated at the state level. Every state sets its own rules, rate approval processes, and underwriting standards.
As a result, what’s insurable in one state may be impossible to insure in another. Some states prioritize strict consumer protection but discourage insurer participation through slow approvals. Others focus on market flexibility with lighter oversight. The outcome is a fragmented national market where availability can vary dramatically by ZIP code.
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How to Research Insurance Before You Buy
Before making an offer, Susman strongly recommends researching insurability just as carefully as price or location.
Key steps include:
- Asking the seller or realtor about past insurance problems
- Talking to local independent brokers
- Checking CAL FIRE wildfire maps and FEMA flood maps
- Requesting pre-underwriting before submitting an offer
Learning this information before you commit can prevent devastating surprises after escrow.
Last-Resort Coverage Options in California
When standard and surplus markets fail, Californians typically have two fallback options:
- The California FAIR Plan, which provides basic fire coverage
- Difference-in-Conditions (DIC) policies, which restore coverage for theft, liability, and water damage
These solutions can work in emergencies, but Susman cautioned that they were never designed as long-term replacements for private insurance.
Why Insurability Must Be Viewed Long-Term
Insurance availability can change rapidly. A property that’s uninsurable today may become acceptable when markets stabilize — and the reverse can also happen. Homeowners should regularly review coverage, stay in contact with their brokers, and track regulatory reforms that might reopen withdrawn markets.
California’s current reform efforts may soon allow carriers to return using forward-looking risk models and faster rate approvals, but timing remains uncertain.
Why Buying Without Insurance Is a Dangerous Gamble
Mortgage lenders will not fund a home without proof of insurance. Cash buyers technically could skip coverage — but doing so exposes them to total financial loss.
“That’s your safety net,” Susman said. “Without it, one disaster and you lose everything.”
If buyers must proceed, they should work with a broker to secure temporary or partial coverage and develop a plan to improve the property and transition into better insurance later.
Final Thoughts: When “No” Is a Risk Signal
In today’s high-risk insurance environment, repeated denials are not just obstacles — they are warnings. Insurers rely on deep data and advanced modeling. If multiple companies won’t touch a home, the risk is likely real.
The smart path forward is clear:
- Work with an experienced independent broker
- Investigate insurability before you buy
- Understand both market conditions and regulatory realities
In today’s environment, being insurable is no longer a formality — it’s a core part of financial safety.
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