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Are you struggling to buy or sell a home
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in California because of skyrocketing
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insurance costs? The return of five
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major insurance companies might finally
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change everything. Can the comeback of
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five big insurance companies revive
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California housing market? After years
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of turbulence in the insurance market,
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five major stepping back into
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California. Mercury Insurance, CSAA,
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USAA, Pacific Specialty, and California
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Casualty have all committed to staying
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in the state, potentially transforming
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the housing market, where high insurance
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costs have created significant barriers
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for homeowners in wildfire prone areas.
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The California Fair Plan has been both a
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lifeline and a massive obstacle. It's
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the insurance provider of last resort
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when private insurers withdraw. The
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catch? The Fair Plan only offers limited
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fire coverage. Homeowners need a second
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policy for standard protections like
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liability, theft, or water damage
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coverage. Two policies means double the
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cost. For many, this has meant paying
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twice as much as they would with a
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standard homeowners policy, says Alan
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Manser, a Los Angeles real estate
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expert. It's killing home sales,
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especially in high-risisk areas, because
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potential buyers see these insurance
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costs and walk away. The conversion
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process from standard policies to the
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fair plan creates additional
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complications. Home buyers face weeks of
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uncertainty waiting for preapprovals.
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Some even lose properties because they
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can't finalize escrow without
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confirmation of coverage. This
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uncertainty has severely impacted the
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real estate market. The five returning
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insurers promise expanded coverage even
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in regions previously deemed
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uninsurable. California's new reforms,
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including allowing catastrophe modeling,
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have made their return possible. The
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goal is to provide the broader coverage
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options and reduce reliance on the fair
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plan. However, this relief isn't
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immediate. All five companies have filed
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for new rates around 6.9%
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requiring a lengthy approval. Policies
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might not be available until early 2026,
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which isn't the quick fix desperate
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buyers and sellers need. The big
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question remains, will insurance giants
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like State Farm and All State follow
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suit? Both withdrew from California's
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high-risisk areas, citing unsustainable
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profits and strict regulations.
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California could learn from Florida's
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approach, where officials implemented a
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depopulation strategy to attract private
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insurers and reduce governmentrun plans
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for the real estate market. These
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developments offer a hope. Alan Manser
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sees expanded insurance options as
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crucial for stabilizing home sales.
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Without private insurers coming back to
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the table, we're stuck in this cycle of
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uncertainty. He explains, "When buyers
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don't know if they'll get coverage or
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what it's going to cost, it's impossible
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to move forward. Important questions
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remain. Will new policies be affordable
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enough to attract buyers? Will they
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cover high-risisk areas without major
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exclusions? Can California rebuild
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confidence in its real estate market?
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The process has begun, but it's moving
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slowly. These five insurers are just the
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start. If they succeed under
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California's new framework, others may
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follow. For now, homeowners, buyers, and
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sellers remain in limbo. Home sales and
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fireprone zones are stalled. Insurance
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costs remain high, and the fair plan
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handles more policies than it was
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designed for. California's real estate
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market recovery depends on one crucial
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factor, insurance stability.
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The only question is how long it will
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take to achieve it. Let's recap the key
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points about California's insurance
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Five major insurers, Mercury Insurance,
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CSAA, USA, Pacific Specialty, and
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California Casualty are returning to
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California, potentially transforming the
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housing market. The fair plan has been
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problematic because it only offers a
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limited coverage, forcing homeowners to
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buy a second policy at double the cost.
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While these insurers are returning,
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their new policies won't be available
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until early 2026, which isn't an
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immediate solution for the market. The
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success of these five insurers could
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encourage other major companies like
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State Farm and Allstate to return to
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California's market. Ultimately,
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California's real estate market recovery
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depends on one crucial factor, insurance
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stability. Thank you for watching this
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analysis of California's insurance
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market. We hope this information helps
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you understand the potential impact on
