Oversaturation Can Impact Closings
Consumers all over the state are aware of the complexity of the insurance market in terms of location eligibility, specifically wildfire, flood and earthquake.
What about the areas that are not prone to wildfire, flood or earthquake?
Can there be challenges obtaining coverage?
Short answer is Yes. The climate in the insurance industry has impacted even areas that are not “high risk” due to
oversaturation.
What does oversaturation mean?
In regards to property insurance, oversaturation means an excessive amount of policies being written in a concentrated area.
If a catastrophic event were to take place and only one company had policy holders in that specific neighborhood, the amount of total losses could be detrimental to the financial strength of the company. For example, ABC Insurance insures five homes on the same street, they could potentially decline the sixth home due to oversaturation.
Take Pro-Active Steps to Getting Coverage
1. Contact the Client’s Insurance Broker
Request “Location Checks” and “Indication” Insurance Quotes before clients make an offer on a home.
2. Do Not Assume
If a seller or neighbor has their home with a standard insurance company, it is not a guarantee that the same company would offer coverage for the new buyer.
3. Obtain Options
If possible, have one or two insurance options handy.
Contact Premier Homes & Country Estates’ associate Alie Lopez, ProCo Personal Insurance Consultant, for more information.
