After the housing market was first transformed by Record-Lage Mortgage Interest, then through inflation and cooling demand, real estate continues another transformation. This time it will be powered by rising premiums for home insurance.
In regions with a high risk of natural disaster, rates are up and the policy disappears as insurers fall for long and new customers to reduce their exposure. From 2019 to 2024, more than 100,000 homeowners lost in California, according to research by the Public Policy Institute of California.
The emotional whiplash of paying a policy for years, only to be refused the coverage when this is the most necessary, has disillusioned many homeowners. For Claire O'ConnorA broker in Los Angeles and homeowner, the destruction became deeply personal.
“I literally said to my husband when we were fallen [in November 2024]”She remembered in an interview with Realtor.com®.” “As if our house is going to burn down … So many houses should burn to get to our house …” We were so far from the hills. '
Then, only two months later, the unthinkable happened. O'Connor lost her house in the Palisades Fire, one of the more than 4,700 houses partially or completely destroyed.
The experience not only reformed her understanding of risk. It changed how she leads her customers, how she talks about homeowner and how she approaches home insurance.
(Mario Tama/Getty images)
The insurance shock: What nobody tells you about the claim process
After a disaster, many homeowners assume that their insurance starts automatically and offers the financial support that is necessary to rebuild and repair. But for O'Connor, and many of its customers, it turned out that submitting a claim almost as stressful as losing the house itself.
“The insurance process is terrible,” she says. “You get a check, and then you have to sign it with your bank if you have a mortgage, and it goes to an Escrow account.”
Instead of offering an immediate exemption, many insurance peryses are entangled in bureaucracy. Instead of a fixed amount, homeowners receive a process. One that often requires a lot of paperwork and documentation, and even quotes from contractors before they release funds to start working, she says.
For many, that has delays in reconstruction, navigating frustration that demand insurer, and confusion about what exactly is covered – and what is not.
Help customers navigating the same nightmare
As well as a homeowner who has been hit by a nature fire and a broker who helps others to pick up the pieces, O'Connor Has a rare window in all sides of the recovery process.
“Some insurance companies have been better than others,” she says, adding that all its customers have had different experiences.
In an ironic turn, those whose houses have survived the fire are not necessarily not necessary.
“People with houses that are still standing are actually told that they have to go back. They will not cover their costs of living.”
But those homeowners are wary to return. Persistent toxins and structural damage are real concerns, especially for families with young children. Yet insurance policies often offers little flexibility when a house is technically habitable.
“Especially people with small children, it's like,” of course, I'm not going to go back, “says O'Connor, who is also a mother.” So they are a bit on their own to cover their costs of living. “
Insurance nuisances even remain steep for those who want to move in the region.
“We have a customer … He said he will pay $ 3,000 a year in Arizona, and he received a quote [in Los Feliz] For $ 40,000 to $ 50,000. “
It is a grim illustration of how natural burn risk not only recovery reforms, but also the feasibility of life in certain parts of California.
What buyers need to know about house insurance
Premies rise throughout the country – and not just in California.
The average annual premium increased $ 648 from 2019 to 2024, an increase of 24%, which surpassed the 13% inflation rate during that time. And premiums rose in Utah (59%), Illinois (50%), Arizona (48%) and Pennsylvania (44%), according to a report of April 2025 by the Consumer Federation of America.
“Insurance is really high everywhere, because it can really reach you everywhere,” says O'Connor.
For buyers who navigate in this area, preparation and prevention are of crucial importance. That starts with understanding what insurers are looking for.
“We work with a great broker. … He helped us understand what insurance companies are looking for,” says O'Connor. She points to having a metal roof or fire -having around the house (such as a gravel belt) as steps that can lower your costs.
“Every proximity to brush, just forget,” she adds.
Yet many of Los Angeles and other vulnerable regions continue to classify in some insurers as 'very high fire zones'. This means that increased premiums are often a starting point, with risk -restricting efforts that only offer modest lighting.
The collection meals for buyers? The old way to think about home insurance, to adjust and forget, is no longer applicable. Prevention is now the pricing and understanding of the risk factors of your real estate before you buy, can make or break your long -term budget.
