Should I Buy an Older Home in California? The Difficulty of Obtaining Homeowners Insurance

Introduction:
In recent years, the homeowners insurance market in California has seen significant changes, with many insurance carriers leaving the area due to profit and loss concerns. One challenge that homebuyers of older houses face is obtaining homeowners insurance for properties that are 30 years old or more. Insurance carriers are becoming increasingly selective, imposing strict conditions on older homes to mitigate risk and ensure property protection.

Red Flags for Purchasing a Previously Owned Home in California:
When considering purchasing a previously owned home in California that is over 30 years old, there are several red flags to be aware of, especially in relation to obtaining homeowners insurance.

1. Roofing: Insurance companies often require that homes with composition roofing older than 25 years have it replaced. And tile roof systems over 30 years old may require upgrades. The condition of the roof is critical for protection against weather-related damage, and carriers may deny coverage if the roof is deemed too old or in poor shape.

2. Plumbing and Electrical Systems: Aging plumbing and electrical systems pose potential risks in older homes. Insurance carriers may demand that these systems be updated if they are over 35 years old to reduce the likelihood of issues such as leaks, electrical fires, or other hazards. Many older homes built in the 50s and 60s will have cast-iron sewer and drain lines below the slab. These systems had a life expectancy of 50 years therefore, unless they have been upgraded, this would be yet another reason for the insurance company to deny coverage.

3. Heating and Air-Conditioning Systems: Similarly, heating and air-conditioning systems over 20 years old may be cause for insurance companies to deny coverage. Outdated systems can be inefficient, unreliable, and even pose safety risks, making them a concern for insurers.

4. Automatic Flow Control Valve: Some insurance companies now require an automatic flow control valve at the Watermain for older homes. This technology can detect abnormal water flow patterns and automatically shut off the water supply to prevent damage from leaks or bursts. Having this feature installed may be necessary to secure coverage.

5. Home Renovation Plans: Homebuyers often purchase older homes with the intention of renovating them themselves. However, it's crucial to consider the insurance implications of these plans. Without homeowners insurance, securing a mortgage and protecting your investment can be challenging.

Side Note:
Additionally, we have seen many individuals. Enter into contract for an older home and pay for numerous inspections totaling in excess of $1000 only to find out that the home could not be adequately insured.

Conclusion:
Purchasing a previously owned home that is over 30 years old in California comes with unique challenges, particularly when it comes to obtaining homeowners insurance. As insurance carriers become more stringent in their requirements for older properties, it's essential for homebuyers to be aware of potential red flags that may impact coverage eligibility. By understanding these considerations and addressing them proactively, buyers can navigate the insurance landscape more effectively and make informed decisions when investing in an older home.

David Salvato
California Inspection Authority.
1-949-981-8320 
​www.ciahomeinspection.com
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