OAKLAND, Calif. – The noose is ever tightening around homeowners, home buyers and home sellers as California’s homeowners’ insurance desert gets ever dryer with cancellations, non-renewals, sellers refusing to sell it and skyrocketing home and auto insurance rates for those who can get it. Despite lowered interest rates, the boom days of California healthy home sales and quick financing seem further and further away. 

A “sale pending” sign is posted in front of a home for sale, 2023 in San Anselmo, California. (Photo by Justin Sullivan/Getty Images)

According to the California Association of Realtors, California’s insurance drought has resulted in 13% of realtors losing a sale or sales this year, because insurance was unavailable or too expensive.  That’s about double that of last year. David Shaffer is a multi-line insurance broker. “Actually. I’m surprised that it’s not even a higher percentage,” said David Shaffer.

Though realtors and rebuffed buyers are reluctant to talk about it, the people many realtors absolutely depend on to seal the deals, mince no words. You cannot finance a house without insurance.

“This is the most challenging time ever trying to secure home insurance in California,” said Shaffer. “Between the combination of non-renewals and just carriers across the board limiting access to coverage, it’s becoming extremely difficult for, especially new buyers, to find options, said Acrisure multi-line insurance broker Allie Lopez. 

Without insurance, lenders cannot finance loans. “And now, you can’t sell it, let alone that someone else cannot by it,” said OriginPoint Home Loan Broker Fif Gabodian.

What insurance that can be found is super expensive. “Insurance that should normally or would normally cost $500 a year, the price of insurance comes to $14,000, $15,000, $20,000 if they can get it at all,” said Gabodian. “There’s a big delay, especially if they are up against a deadline if they’re being non-renewed or a deadline for purchases,” said Lopez.

Author of 36-year-old Proposition 103, Consumer Watchdog Founder Rosenfield says new rules from the Department of Insurance, due out by then of the year, do not guarantee a better market.

“Right now, the way the law is being applied by Insurance Commission Ricardo Lara, the answer is yes, they can cancel, they can non-renew, there are no protections for any or no reason,” said Rosenfield. “We may not know until 2026 or later, if these regulations get implemented the final impact of improving the insurance marketplace in California,” said Shaffer. “They won’t take effect for a long time. Insurance companies have years to put them in place,” added Rosenfield.

That’s just about the time that the Insurance Commissioner will be termed out of office. The Department says it continues to develop the new rules.