10/03/2024
PSA to our Realtor friends and home buyers out there. Make sure you are not only checking home insurance prices on pending purchases, you are making sure the property can actually be insured for a reasonable price or at all within the inspection period. We have had two clients call us past the inspection period and find out coverage couldn’t be purchased or be purchased for an affordable price. One of the two lost their earnest deposit… Due to the hard market, many properties are uninsurable in standard markets and require the buyer to purchase a policy via surplus markets. Surplus markets can charge $1000’s or even $10,000 more than the standard market would be.
Things that make insurance hard to place or unaffordable in this market include:
- Properties in northern Arizona. Payson, Flagstaff, Pinetop or Showlow. This is because of the brush score/wildfire issues in these areas.
- Properties surrounded by desert with moderate brush in the desert. (Villago has caused issues recently with this one)
- The buyer has one or more claims on a past property in the last 3-5 years
- Asphalt shingle roofs that are older than 15 years.
- Older homes
- Homes in poor condition
The more of these factors you have the harder or more unaffordable things become.
We have seen homes in certain areas in Showlow running $26k- 40k per year for insurance.
The hard market is starting to get better but the brush scores are a long term issue. If your home is located in high country you may have an issue insuring it in 2024.
The key is to get a quote asap when you make an offer on the home. If you can, include language in the contract that allows for the buyer to back out in case of no available coverage in the standard markets.
If you are worried about a pending purchase you can call my office at 520-836-3244 or DM us and we can check availability/affordability pretty quickly. We can always find coverage, but it could be subject to a higher premium or limited coverage on extreme situations.
