Weighing Risk vs. Reward
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In case you missed it, home insurance plays a crucial role in the buying and selling process, especially in areas prone to natural disasters. We can help you understand the financial and other implications on both sides of the process, especially as insurance companies reconsider their policies in high-risk areas.
CHIC (Pearl)
Buyers should use risk assessment as their North Star. You might reconsider purchasing an otherwise wonderful home in an area frequently affected by natural disasters due to the high risk of damage or destruction in a constantly changing environment. A lot of the decision will come down to the cost and availability of insurance. Lenders typically require home insurance as a condition of your mortgage, and if you can’t get a policy, you may not get the loan. It’s a difficult balance, so you’ll need to be committed to the process if you want to make it work.
GEEK (Kevin)
Risk mitigation is the name of the game for sellers. Changes in insurance policies and regulations can have long-term effects on the desirability and value of properties in high-risk areas prone to disasters like wildfires and earthquakes. On top of that, you may be required to disclose past insurance claims related to natural disasters, which might sour buyers on the property. You can help tip the scales by bringing your home’s safety measures up to date, but that may not create the nexus point you need between buyer interest and selling challenges.
