You find a great condo in San Diego, the price is right, and you’re ready to make an offer. Then your insurance quote comes back — and it’s either far higher than expected, loaded with exclusions, or the carrier you were counting on simply won’t write the policy at all.
This isn’t a rare scenario anymore. It’s becoming routine. For buyers, owners, and small landlords in San Diego, understanding the insurance landscape before signing a contract could save thousands of dollars and weeks of lost time.
Thomas Nelson, a Realtor with Big Block LPT Realty and over 25 years in the San Diego market, says insurance has become one of the biggest deal-breakers he sees — and the problem is growing each year.
California’s wildfire risk has pushed major insurance carriers to scale back or exit the state entirely. State Farm has stopped writing new homeowner policies in California. Farmers Insurance is still operating but increasingly through third-party providers, which can double or triple the cost.
The result is that buyers and homeowners are turning to smaller, less established carriers to fill the gap. “We’re having to go to these cleverly named companies you never heard of two or three years ago,” Nelson says. “They’re coming in on the coattails of the majors that are leaving.”
These newer carriers are filling a real need, but shopping for coverage takes more effort than it used to. The days of calling one agent and getting a competitive quote in an afternoon are largely over in California.
Condos and townhomes face a separate but equally serious challenge. California now requires structural inspections of balconies and stairways in multi-unit buildings. Many homeowner associations missed the deadline or discovered problems they haven’t yet fixed. When that happens, the building can become what lenders call “unwarrantable” — meaning standard mortgage financing is no longer available.
On top of that, many condo communities are underinsured for wildfire risk. When a building’s master insurance policy doesn’t meet lender requirements, buyers either need to pay cash or take out a non-qualified mortgage, which carries a higher interest rate and additional fees.
Nelson says he has recently sold several of these properties, and none have been straightforward. “There’s no deal I’ve closed in the last five or six years that I’d call simple,” he says.
The most important step buyers skip is getting an insurance quote before making an offer. If the property is in a high-risk wildfire zone, or if it’s a condo in a building with unresolved inspection issues, you need to know that before you’re emotionally invested in the deal.
Ask your agent specifically whether the property is in a community with any pending HOA insurance or structural inspection problems. These details aren’t always visible in a listing, but they can derail a deal weeks into escrow.
If you’re buying a condo, request the HOA’s master insurance policy and find out whether the building has completed its required balcony and stairway inspections. If it hasn’t — or if problems were found and not yet repaired — factor that into your decision and your budget.
Shop your policy 30 to 60 days before your renewal date. Carriers are quietly reducing their exposure in California, and your current insurer may not offer the same terms at renewal. Getting quotes from multiple providers — including the newer specialty carriers now operating in the state — gives you leverage before you’re forced into a single option.
If you’ve made upgrades like a new roof, updated electrical systems, or fire-resistant landscaping, call your agent and ask for a re-quote. Those improvements can meaningfully lower your premium.
Some insurance policies have a 30-day waiting period before coverage takes effect. If you’re closing during fire season or in a high-risk area, you cannot wait until the last minute to secure a policy. Your lender will require proof of coverage before closing — and scrambling to find it in the final days of escrow is a problem you can avoid with a little planning.
Insurance in San Diego is no longer a background detail you sort out after the deal is done. It directly affects whether you can get a mortgage, how much you’ll pay each month, and whether a deal makes financial sense at all. As carriers continue to pull back from California and wildfire risk reshapes underwriting decisions, these pressures are likely to increase — particularly for condo owners in buildings that haven’t kept up with inspection and insurance requirements.
Get quotes early, ask about HOA insurance status on any condo purchase, and don’t assume the carrier you’ve used for years will still be available when you need them. The market has already changed, and staying ahead of it starts with asking the right questions before you commit to a property.
About the Expert: Thomas Nelson is a Realtor with Big Block LPT Realty and has more than 25 years of experience in the San Diego real estate market. He specializes in navigating complex transactions and has become a go-to resource for buyers and owners facing the region’s evolving insurance and financing challenges.
This article is intended for informational purposes only and does not constitute legal, financial, or investment advice. The views and opinions expressed herein reflect those of the individuals quoted and do not represent an endorsement of any company, product, or service mentioned. Readers should conduct their own due diligence and consult qualified professionals before making any investment decisions.
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