Home insurance used to be an afterthought. Now it’s a dealmaker—or a dealbreaker. Whether you’re buying, selling, or already own in Northern California, this shift affects you. David Higgins, founder of Cush Real Estate, explains how to stay ahead of rising premiums, shrinking options, and what to do before your next offer or renewal.
What Every Homeowner—and Homebuyer—Needs to Know
By David Higgins, Founder, Cush Real Estate, Top-Producing Bay Area Realtor & Market Leader
If you live in Northern California—or plan to—home insurance is no longer something you review once a year and forget about. In today’s market, it’s a defining factor in everything from closing a purchase to preparing your home for sale.
Recent wildfires, skyrocketing premiums, and an exodus of traditional carriers have made insuring homes—especially in areas like our own Oakland and Berkeley Hills—a far more complex process. For buyers, it can delay or derail a transaction. For current homeowners, it can affect everything from resale value to long-term affordability.
In this post, we’ll walk through what’s driving the shift, how it impacts both sides of the real estate equation, and what you can do now to stay ahead of the curve—whether you’re staying put, prepping for sale, or looking to buy.
Why Insurance Has Become the New Dealbreaker
In recent years, wildfires and climate-related risks have prompted many insurers to pull back from what are now deemed Very High Fire Hazard Severity Zones. That includes beloved East Bay neighborhoods like Montclair, Upper Rockridge, the Berkeley Hill and Piedmont Pines, where steep terrain and dense vegetation create elevated fire exposure.
If you’re trying to buy in one of these areas, you may find traditional coverage is either unavailable—or comes with a sticker shock premium. Sellers, take note: that sticker shock can potentially kill a deal for some buyers, even if you have a great home.
In many cases, buyers have no choice but to turn to the California FAIR Plan, a last-resort state program that offers limited fire coverage. But it’s often not enough on its own. Most lenders require buyers to pair FAIR Plan coverage with a Difference in Conditions (DIC) policy that fills in gaps like liability, theft, and water damage.
Without proof of sufficient insurance, a lender won’t fund the mortgage—meaning the entire deal collapses, regardless of offer strength or home value.
Why Sellers Should Care About Buyer Contingencies
For homeowners preparing to sell, it’s essential to understand the new insurance landscape from the buyer’s perspective.
In uncertain markets, buyers often include an insurance contingency in their offer—giving them time to confirm whether they can secure affordable coverage. If they can’t, they have the right to walk away without losing their deposit.
This may sound like a minor clause—but it can have real consequences. We recently accepted an offer from buyers who said they just needed a few days to confirm insurance. Within 24 hours, they backed out, citing insurability—even after we sourced a very reasonable quote. In reality, the contingency was used more like a loophole than a legitimate concern.
For sellers, this means two things:
1. Prepare for insurance questions from buyers up front.
2. Consider providing quotes or third-party assessments before going to market to reduce surprises.
At Cush, we now proactively include preliminary insurance quotes in our disclosure packages whenever possible.
Homeowners: Is Your Property Still Insurable?
Even if you’re not actively buying or selling, this topic affects you.
Insurance companies are now re-evaluating entire portfolios—and some homeowners are receiving non-renewal notices due to changes in risk assessment. If your home is in a flagged zone or hasn’t had major systems updated, you could find yourself scrambling to replace coverage—or paying significantly more for less protection.
Carriers are now looking at:
• Electrical systems – Outdated wiring (like knob-and-tube) can trigger higher premiums or denials.
• Roof age and material – A worn roof, or one with flammable materials, is a red flag.
• Deferred maintenance – Overgrown vegetation, drainage issues, or visible wear can impact coverage.
• Defensible space – Especially in hillside zones, insurers want to see clear brush clearance and smart landscaping.
Even if you’re not listing your home, this is a strong case for a mid-year property checkup. Staying ahead of these issues can protect your premium—and your peace of mind.
Buyers: How to Stay Competitive Without Getting Burned
If you’re actively shopping for a home, insurance should be part of your strategy from the start—not an afterthought. Here’s how to prepare:
• Talk to multiple insurance agents early. Not all carriers evaluate properties the same way. Cast a wide net.
• Check the fire zone. Use Cal Fire maps and request a CLUE report to see past claims.
• Inspect systems. Review electrical, roofing, and drainage conditions—either yourself or through a trusted inspector.
• Request quotes before making an offer. An agent can often provide a ballpark estimate based on the address and specs.
• Budget for layered coverage. If you need the FAIR Plan + DIC combo, factor that into your monthly cost of ownership.
• Know your risk tolerance. Decide ahead of time if you’ll need an insurance contingency—or feel confident waiving it.
The Bottom Line: Be Proactive, Not Reactive
Whether you’re in your forever home or gearing up for your next move, insurance isn’t just paperwork—it’s a major financial lever. And in Northern California, it’s a moving target.
Buyers need to understand how insurance affects not just monthly costs but closing outcomes. Sellers need to anticipate these concerns and be ready with answers—or risk losing buyers, or potentially the deal. And homeowners should treat their insurance policy as a living document, not a dusty file folder.
At Cush, we don’t just prepare listings—we prepare our clients. If you’re buying, selling, or just want help understanding where you stand in this new landscape, We’re here to help.