Why Some Home Sales Are Delayed Right Now
Deals aren’t falling apart over credit or appraisals — they’re getting delayed over homeowner’s insurance, usually discovered late in escrow when everyone is trying to close quickly.
Over the past several months, we’ve noticed something changing in real estate transactions across California. Several major carriers have limited or stopped writing new policies in the state, and the insurers that remain are reviewing properties far more closely than they did even a year ago.
Because of this, securing acceptable coverage has quietly become one of the biggest risks to closing a transaction on time in California.
We’re even seeing this here in Long Beach — especially in neighborhoods like Bixby Knolls, California Heights, and Belmont Heights, where aging roofs or older construction can trigger additional insurance review.
Here’s what we’re seeing and how we help our clients stay ahead of it.
What Lenders Now Require
Most lenders now require insurance policies that meet strict standards before a loan can close. Typically this includes full replacement cost coverage, reasonable deductibles, and policies without exclusions that affect the habitability of the property.
When the California FAIR Plan is involved — which is becoming more common throughout the state — buyers often need a second “wrap” policy along with additional documentation. This can increase both the cost of insurance and the complexity of the transaction.
Homes That May Require Extra Attention
Across California, some properties receive additional scrutiny from insurance carriers. The most common factors include:
None of these automatically prevent insurance — but they can slow down escrow if they aren’t addressed early.
How We Help Protect Our Clients’ Timelines
Because of these changes, we’ve adjusted how we guide buyers and sellers through the process.
We encourage buyers to start exploring insurance options immediately after an offer is accepted, especially if a property has any potential risk factors.
We advise confirming insurance availability before removing contingencies. Discovering insurance issues late in escrow can delay or even jeopardize a closing.
When representing sellers, we try to identify potential insurance challenges early so buyers aren’t surprised halfway through the transaction.
We help buyers understand the reality of today’s insurance landscape in California — including when the FAIR Plan may be required and how it can affect monthly costs.
The Takeaway
In today’s California market, insurance underwriting is no longer a simple formality at the end of escrow. It has become a critical qualifying step — similar to credit approval or the appraisal process.
The smoothest closings right now are happening when insurance is addressed early in the transaction — not weeks after escrow opens.
If you’re thinking about buying or selling a home in Long Beach and want to understand how these changes could affect your timeline or costs, we’re always happy to help you plan ahead.
Let’s Talk — 562.243.5948
