My family sold our home in California last year.
We're still in California, just closer to the people and places we love, but if you've ever moved or are contemplating doing so, there are certain things even ChatGPT can't tell you—so I'm here to set the record straight.
After all, never waste a good learning curve when there's a moral to the story.
First, selling a house is stressful.
Take it from my friend Daniel Morgan, who runs Marterra Real Estate in Orange County:
"Ninety-nine percent of the realtor's job is psychology."
There can be many reasons to sell or not sell a house. For us, we weren't in a situation where we had to sell, but with a growing family, our space was getting a bit tight. The economics of things and proximity to family factored in heavily, too.
Some people debate endlessly: Should we move? Shouldn't we move? Why are we moving again? Oh yeah, that's why. On repeat. For weeks. Others, like us, wonder out loud too, but have a firm understanding of their "why"—yet still have to manage the logistics. Still others wouldn't ever second-guess their breakfast cereal, and moving isn't a big deal. I envy them.
(For the record, I'm still not sure we made the exact right decision, but you only live once.)
Then throw in open houses, random showings on Father's Day and Fourth of July, Sunday evenings, and all the paperwork to review. Thankfully, our kids, or at least our two-year-old daughter, inherited some of our neat-and-tidy traits.
Second, insurance is a different animal when you're moving.
In most cases, folks get their monthly or annual insurance bill for home and auto and think, Could I do better? It's a more casual conversation to save a few bucks.
When you're moving in California, though, insurance is an obstacle for both the buyer and the seller. The closest I can relate it to is getting our first (yes, first) non-renewal letter for home insurance, but you don't have 60 days to find replacement coverage.
Now, you might think that figuring out insurance as an insurance broker would be easy. But your brain does this weird thing in moments of change that you haven't trained for—it freezes up. Sure, I know quite a few people at Falcon West (and you do too now) who can ultimately help me solve the problem, but I digress.
Insurance is more expensive than in years past, even if you pull all the levers like evaluating your limits and increasing deductibles, and it's slowing down home sales for this very reason. Go on Nextdoor and search "insurance," and you'll see people commenting about wanting and needing to move out of state.
The home we were selling was in a high wildfire zone, not to mention the many homes we looked at buying. Our first two buyers fell through when they got insurance quotes, despite being offered a credit for the first year's premium. The confidence just isn't there for year two.
Don't forget that you can re-shop your home and auto insurance after you close, too, when you have more time (even though a good broker should canvas things for you the first time).
How insurance became a barrier to closing
It used to be that securing home insurance was an afterthought in the home-buying process—a quick box to check a few days before closing. Today, in California, it has become a primary barrier to getting a deal done.
In a standard California real estate contract, there isn't a dedicated "insurance contingency" checkbox, unlike those for appraisals, inspections, or disclosures. However, if a buyer is financing the property, insurance is implicitly tied to the loan contingency.
Lenders require proof of insurance to protect their investment. They will not issue a "clear to close" status or grant full loan approval unless the buyer has an insurance company selected, a policy bound, and the lender named as the loss payee.
This creates a critical bottleneck. If a buyer removes their loan contingency within the standard 21-day window, it signals to the seller that the loan is secure, which means the buyer must have already secured insurance. But with carriers pulling out of the state, pausing new business, or drastically increasing premiums in wildfire-prone areas, finding that coverage within 21 days is no longer guaranteed.
When buyers discover that the only available policy costs $10,000 a year (or more), it completely changes their debt-to-income ratio. Suddenly, they may no longer qualify for the loan, forcing them to back out of the deal entirely. This is exactly why we saw buyers fall through on our own home, and why insurance is impacting real estate momentum everywhere.
How insurance became a barrier to closing
You can't rely on the current homeowner's insurance to be an indicator of what you'll get for the home yourself, but your real estate agent can get an idea from an insurance broker. That's exactly what we provided to our real estate agent, and it answered many questions for prospective buyers up front.
Third, home updates matter for the home you're buying or selling.
California's housing stock is older than most people realize: the median owner-occupied home here is roughly four to five decades old, which means many properties still have original roofs, wiring, and plumbing.
When insurers look at an older home, they are really asking one question: has the infrastructure been modernized enough to lower the risk of a big loss? Updates to the roof, electrical, plumbing, and HVAC within roughly the last 20–30 years are often the difference between "yes, we'll quote it" and "no, we're out," especially in higher-risk areas.
That matters in a real estate deal. If the seller can document recent work—re-roofed in 2015, copper or PEX plumbing, upgraded electrical panel, modern HVAC—it gives the buyer's insurance options a fighting chance and speeds up underwriting.
If those details are fuzzy or missing, underwriters tend to assume the worst, which can mean higher premiums, extra inspections, or a flat decline right when everyone thinks they're heading toward closing. Being specific and honest about updates on both the purchase offer and the disclosure side keeps the insurance conversation from blowing up the transaction at the eleventh hour.
Fourth, there's no centralized PPC rating.
The Insurance Services Offices (ISO), owned by Verisk, produces the Public Protection Classification (PPC) that insurance carriers use to rate property risk factors such as fire, flood, and wind/hail. You can call the local fire department to get it.
Our home checked all the risk boxes: a fire station less than one mile away, a fire hydrant right across the street, no brush or plants anywhere near the house, trees cut back, no cracks in the pavement, a roof in great condition, and everything well-maintained.
But our house was in a wildfire zone like you wouldn't believe, and you can imagine it had the insurance to go with it.
For context, a typical property report might show a Fire Risk Factor of 9 out of 10, with a high probability of wildfire exposure over the next 30 years. When insurance carriers see that, their answer is often a simple: Nope.
Official disclosures signed by the buyer and seller during a home sale often reveal a High or Very High Fire Hazard Severity Zone. This includes an AB 38 Notice, and we had to get a Defensible Space Inspection from Cal Fire.
So what's the moral of the story, Peter?
Moving is stressful, and home insurance in California has been a genuine drag on that process.
The great news is that the market is showing early signs of stabilizing as regulators approve new rate structures and more carriers signal renewed interest in writing business. The less-good news is that it's still a hard market: premiums are higher than a few years ago, coverage is tighter, and the underwriting questions come earlier in the transaction and cut a little deeper than they used to.
If you're moving homes—or even just got a non-renewal letter—the takeaway isn't to panic, but to recognize that you now have one more set of boxes to check. You need to start the insurance conversation early, be crystal-clear on the home's age and updates, and be ready to compare a few different structures (admitted carriers, the FAIR Plan plus wrap, surplus lines) before you land on the right fit. You likely have more options than it feels like in the moment, but you no longer have the luxury of treating insurance as a last-minute afterthought.
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