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If you’ve looked for homeowners insurance in California recently, you’ve probably noticed it’s become much more difficult—and much more expensive—to get coverage.
Many buyers are surprised to learn that the biggest challenge isn’t just higher premiums. In some parts of the state, it’s finding an insurance company that’s willing to write a new policy at all.
Here’s what’s happening and what it means if you’re buying a home in San Jose.
Why Is This Happening?
Over the past several years, California has experienced a series of devastating wildfires that resulted in billions of dollars in insurance claims.
As losses continued to grow, many insurance companies began rethinking how much risk they were willing to take in California. Some stopped writing new policies in certain areas, while others reduced the number of homes they insure or chose to leave the state altogether.
The result is a market where homeowners often have fewer choices than they did just a few years ago.
What Is the California FAIR Plan?
If you’ve been shopping for insurance, you’ve probably heard about the California FAIR Plan.
The FAIR Plan is designed to provide basic insurance coverage for homeowners who can’t find a policy through the traditional insurance market.
While it can be an important safety net, it’s important to know that it doesn’t offer the same level of coverage as many standard homeowners insurance policies. Many homeowners need to purchase an additional policy to cover things like liability, theft, or water damage.
That’s why it’s generally considered a last resort rather than a first choice.
Insurance Costs Have Increased
Even homeowners who have been able to keep their current insurance have seen premiums and deductibles increase over the past few years.
Insurance companies have adjusted pricing to reflect higher rebuilding costs, wildfire risk, and the increasing number of claims across California.
While every property is different, it’s become more important than ever to include insurance costs in your overall home-buying budget.
How Does This Affect San Jose?
The good news is that much of San Jose is considered lower wildfire risk than many mountain or rural communities throughout California.
However, that doesn’t mean local homeowners are completely insulated from what’s happening statewide.
If you’re buying in the foothills or hillside communities around Santa Clara County, you may have fewer insurance options or pay higher premiums because of increased wildfire risk.
Even homes in lower-risk neighborhoods may see higher insurance costs simply because the California insurance market has changed.
What Buyers Can Do
If you’re planning to buy a home, there are a few simple steps that can help avoid surprises later.
- Get an insurance quote before removing contingencies.
- Ask whether the property is located in a designated Fire Hazard Severity Zone.
- Compare quotes from multiple insurance companies.
- Ask about discounts for wildfire mitigation or home-hardening improvements.
- Budget for insurance alongside your mortgage, property taxes, and HOA dues.
Doing a little homework before closing can save you a lot of frustration later.
Don’t Let Insurance Be an Afterthought
Many buyers focus on the purchase price and monthly mortgage payment but don’t think about insurance until they’re just days away from closing.
Today, insurance deserves to be part of the conversation from the very beginning.
Understanding your options early helps you make a more informed buying decision and avoid unexpected costs.
Bottom Line
California’s homeowners insurance market has changed dramatically over the past few years, making coverage more expensive and, in some areas, harder to find.
Fortunately, many San Jose neighborhoods still have good insurance options, but it’s important to research coverage before making an offer—especially if you’re buying in hillside communities or areas with higher wildfire risk.
If you’re thinking about buying a home in San Jose, I’d be happy to help you understand how location can affect your overall cost of ownership. And when it comes to choosing the right insurance policy, be sure to work with a licensed insurance professional who can help you compare coverage options for your specific property.
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About the Author – Michelle Elliott
With over 20 years of experience navigating the fast-paced Silicon Valley market, I provide a strategic, results-driven approach to residential real estate. My career is built on a foundation of deep local expertise and a relentless commitment to my clients’ success, resulting in over $235 million in lifetime sales volume and a consistent ranking in the top 3% of agents in Santa Clara County and top 2% at Coldwell Banker. My expertise has been featured on KTVU Fox 2, Real Producers and the Willow Glen Resident. She is also the co-host of the San Jose Podcast “Say What You Want About Real Estate”
A Hyper-Local Expert with Global Reach
I specialize in San Jose, in the neighborhoods of Willow Glen (95125 & 95124) Cambrian Park and Almaden, Downtown San Jose/Japantown (95112) markets. As a certified Luxury Property Specialist with Coldwell Banker Realty, I combine high-end marketing strategies with granular neighborhood knowledge to help my clients achieve premium results.
The “Tiger” at the Negotiating Table
My clients have characterized me as a “tiger” at the negotiating table who remains “sweet and patient” with my clients throughout the process. I pride myself on being a fierce advocate for my buyers and sellers, ensuring the best possible terms in every transaction, and I strive to be the best Realtor in 95125! This balance, drive, and tenacity have earned me consistent 5-star ratings across Google, Zillow, Realtor.com, and Yelp.
Michelle Elliott
Michelle@michelleelliottrealtor.com
1712 Meridian Ave, Ste C, San Jose, CA
DRE 01777533
