02/12/2026
I wanted to share a current situation I’m navigating on a refinance so you can see what’s happening in today’s insurance environment here in Southern California. I recently went to IVAR to hear Gov Hutchinson talk about legal updates with CAR/NAR. He brought up Homeowners insurance and laws that will go into effect in 2027 but stated that the insurance companies won't wait before they start enforcing them. One was a new Fire Zone, Zone 0, that is the highest risk category.
Here is an example of what Homeowners insurance companies are doing,
This is not a purchase — my client inherited her father’s home and we’re simply refinancing to put the property into her name. The home is currently insured with Mercury Insurance. No upgrades were represented — just a straightforward refinance.
Here’s what Mercury is requiring before approval:
A detailed property inspection report dated within the last 3 years
If not included in that report:
Documentation (invoices/permits/licensed contractor verification) confirming roof replacement
Confirmation the entire home has been re-piped (hot and cold pressurized lines)
Documentation that the electrical panel has been replaced
If not included in the report:
Exterior photos (front, back, roof from ground view)
Yard and additional structures
Photos of all electrical panels
Photos of water heater
Photos under all kitchen and bathroom sinks
Zinsco (including Magnetrip, Sylvania, Challenger) and Stab-Lok panels are ineligible and must be replaced
This is on a home that already had coverage in place.
Insurance underwriting has clearly tightened. Roof age, plumbing, panel brands, and fire zones are all under much closer review.
You can check Fire Hazard Severity Zones through the California Office of the State Fire Marshal here:
https://osfm.fire.ca.gov/what-we-do/community-wildfire-preparedness-and-mitigation/fire-hazard-severity-zones
And this interactive map allows you to check specific properties:
https://experience.arcgis.com/experience/5065c998b4b0462f9ec3c6c226c610a9
As agents, you can add tremendous value by:
Checking the fire zone designation early
Asking about roof age, repipe status, and electrical panel brand during your initial conversations
Encouraging buyers to get insurance quotes — even before writing an offer if they’re serious about a property
Advising your sellers on potential insurance concerns when you’re taking the listing, before going active
My goal in sharing this isn’t to create concern — it’s to help all of us stay ahead of surprises. Insurance is becoming just as important to the transaction timeline as the appraisal and inspections.
I’m here to support you. If you ever want to run an address before listing, or if you have a buyer you’re concerned about, I’m happy to help. I also work closely with an insurance broker who understands today’s underwriting guidelines and has been extremely resourceful when challenges come up.
Have a great day!!
Craig
