Due Diligence on your New Home – Insurability

Having insurance on your home is pretty darn important, with natural disasters and all sorts of other things that may happen to damage your property.

One of the essentials in your due diligence is to check on the INSURABILITY of the property during the due diligence phase as outlined in our California residential purchase contract (it may differ from state to state).

If you are a cash buyer, you can make the choice to not pay for insurance but that is a huge risk.

If you are getting a loan your lender will require appropriate insurance to cover your home (i.e., their collateral) with specific coverage limits. You will need to provide proof of insurance and payment for one year in advance at or before the time you close.

Getting home owners insurance can be tricky with certain properties, and some companies will simply decline to insure certain properties. Here are some potential threats to getting coverage, or which result in higher costs

  • High risk fire zone
  • Earthquake zone
  • Wooden shingle roofing
  • Prior claims
  • Waterfront Property
  • Bluff Property
  • Difficult access by fire trucks
  • Properties in an identified flood zone


Chances are there won’t be a problem, but you certainly want to confirm INSURABILITY before proceeding with the purchase, so look into this right away once you have an acceptance, either with your current provider or other recommended vendors.