Expert: Ray Beggs - 4/12/2007

Question
QUESTION: What are the California statutes on selling a house with a roof that no insurance company will insure?  I am in the process of buying a house, but have discovered that (1) my existing home insurance company, Farmers, will not insure a house with a shake roof at all, and (2) Allstate would, but when their inspector went to look at the roof, he said it was too old for them to insure me unless I had a signed contract with a date for replacing the roof, right after I move in May 5th.  NO ONE told me that this could be a problem and I'm wondering if it's even legal to sell a house that no reputable company will insure?  I am very disappointed in my real estate agent and the company he recommended for my home inspection for not realizing this was going to be a problem.
ANSWER: Hi Julia,

First off, there are many variables that can make an insurance company not want to insure a particular house. Being to close to a wildlife area, flood area, earthquake area, trampolines, pitbulls, aluminum wiring, etc.  Wood shake roofs are an item that might exclude your home from some insurance companies, but there are many that will accept the roof. Wood shakes roofs are very common in California and if you couldn't sell a house with a wood shake roof, then there would be a big problem. I would thoroughly disclose to the new buyer that the home has a wood shake roof and have them do their due diligence during escrow to make sure that they are comfortable with the insurance that they will be able to get.

Best of luck,

Ray

---------- FOLLOW-UP ----------

QUESTION: My point was that the roof was 21 years old, not that it was shake.  Even one of the best brokers here in town did not have one company that would insure the house.  I was just appalled that it became MY responsibility, when I feel that the seller and their agent should have been aware of the insurance problem BEFORE they put the house on the market.  Luckily, Allstate decided to give me some time to deal with getting a new roof on, as soon as I signed off on an estimate or I would be stuck with the only company we found who would insure it...Mercury, which I've never even heard of.

Answer
Hi Julia,

I'm sorry you're having trouble with this. I have a 25 year old wood shingle roof and I am insured through Mercury. Mercury is one of the biggest insurers in California, car and home. As far as the agent and owner knowing about this ahead of time, a lot of times it just isn't a problem so it's not discussed. The seller had almost assuredly had homeowners insurance when they owned the property so they would probably not anticipate it being a problem to a new owner. As I said before, all of the insurance companies have there own "we don't cover that" items ranging from roofs to plumbing, trampolines, electrical, fire areas, flood areas, earthquake areas, industrial areas, etc. You might consider keeping the roof and going with Mercury Insurance.  Mercurys rates are pretty competitive here in California. I would suggest that you keep shopping it around. You'll find a good company with a good rate and you'll never have to think about it again.

Best of luck,

Ray