The One Cost That’s Making Buying a Home in California Too Expensive & The Cities Where It’s Not An Issue
Written by
Cynthia Measom
Edited by
Zuri Anderson
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Home insurance is now a major expense in some areas of California. And with wildfires and other climate risks on the rise, insurers like State Farm and Allstate have made the decision to not offer renewals to some policyholders residing in high-risk areas.
Unfortunately, this change is already impacting the housing market. Nearly 13% of home sales in 2024 were canceled because buyers couldn’t secure affordable insurance — almost double the rate from last year, according to the California Association of Realtors.
But buyers don’t end up buying a property blindly. California requires home sellers to provide a Natural Hazard Disclosure Report that reveals known risks such as floods, wildfires and earthquakes to buyers.
Additionally, in high-risk areas, real estate agents are now advising sellers to make climate-related upgrades, like replacing wood shake roofs or to offer financial credits to offset insurance costs.
Further, some buyers are now including insurance contingencies in their offers, which allow them to back out of a sale if they can’t find an affordable policy.
In this article, GOBankingRates breaks down how you can find California cities with favorable insurance costs and reveals several cities where home insurance is more affordable.
How To Find Cities With Favorable Insurance Costs
Real estate marketplace Zillow recently began adding climate risk data to its listings, breaking down separate risk scores for flood, wildfire, wind, heat and air quality. This new feature is in partnership with the research company First Street.
Ashleigh C. Trent, personal lines director and co-founder of Tower Street Insurance, said that for potential California homeowners, finding cities with favorable insurance costs often hinges on local brush and wildfire scoring.
“Brush scoring assesses wildfire risk based on factors like vegetation, topography and climate, which significantly impact both insurability and premiums,” she explained. “In high-risk regions, insurance can be costly or limited as carriers increasingly rely on these scores to determine risk.
“When considering a move, potential buyers should research brush and wildfire scores for neighborhoods, as these scores directly impact insurance availability and affordability. Consulting with professionals on local risk assessments helps ensure insurability and manage long-term costs effectively.”
Search any property address in the U.S. for climate risk data from First Street. For more comprehensive data for a property, First Street offers a free seven-day trial.
California Counties and Cities With High Risks
“FEMA’s wildfire risk maps highlight 11 California counties — including Los Angeles, San Diego and Riverside — as areas at higher risk for wildfires, which affects both the availability and cost of insurance,” said Trent.
“Cities like San Diego, Rancho Santa Fe and Truckee carry particularly high wildfire hazard ratings, often resulting in more restrictive and expensive insurance options.”
California Cities Where Home Insurance Is Less of an Issue
“In contrast, some California cities offer more affordable insurance due to lower wildfire exposure,” Trent said.
“Coastal and well-developed areas such as Santa Monica, Redondo Beach, parts of Orange County, La Jolla, Dana Point, Corona Del Mar, and Palm Springs generally benefit from favorable brush scores, enabling more competitive insurance premiums.”
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