Habitat For Humanity struggles to sell affordable homes amid California insurance crisis

SACRAMENTO — Habitat For Humanity is struggling to sell its affordable homes to low-income families in California due to the home insurance crisis in the state.

For Tiffany Timberman and her family, owning a home in Sacramento is a dream come true.

Having a place for her family wouldn't have been possible without the Habitat For Humanity nonprofit.

"I just burst into tears, like it was life-changing. Literally like winning the lottery," she said.

Timberman is just one of many Habitat For Humanity families who have home insurance. She was approved with no issue.

"We didn't have trouble, but I know it is a problem for other people whether it's an older home or if it's in a fire zone," she said.

Home insurance is an essential step in the home-buying process, but it's becoming increasingly difficult for people to obtain.

It's been a troublesome trend for the nonprofit, which works to get homes built for deserving families.

"This isn't isolated to just low-income families, Habitat homeowners," Habitat executive director Debbie Arakel said. "This is everybody that's getting hit with this."

Arakel explained that families face a number of obstacles, from not being able to find insurance to being dropped by insurance companies or the increased costs of premiums.

"It's kind of sad because you know people deserve to be able to move inside there, especially if it's for a program for people who can't afford homes," Timberman said. "So having another hurdle to get them in seems kind of like why."

Is there a solution?

Arakel said it comes down to the California Department of Insurance and its regulations.

"What can we do in the interim short of these expensive and noncomprehensive fair plans when there are no insurance providers offering homeowners insurance?" she asked.

CBS13 reached out to the office of Ricardo Lara, the state's insurance commissioner, about the home insurance crisis. His department issued the following statement:

"Making insurance more available is our top priority. Commissioner Lara continues to work on a multi-step approach to the insurance issues facing Californians, including California's affordable housing providers. Since taking office, he has met with affordable housing developers and other stakeholders to hear input as we work for solutions to the insurance availability issue many Californians are facing.

Expanding commercial coverage is an important step in ensuring more coverage options are available to consumers throughout the state. Last March the FAIR Plan agreed to increase its commercial coverage limits to $20 million which will help some HOAs and affordable housing providers and similar groups. We also recommend they continue to shop for insurance in the admitted market, and look into the surplus lines market for immediate needs, which the Department of Insurance can help them to navigate.  

With the reality that insurance companies are free to choose where they will write insurance here in California and nationwide, last September Commissioner Lara announced his Sustainable Insurance Strategy to overhaul our state's insurance market, ensuring it thrives for the benefit of all Californians while addressing the escalating climate crisis. The Commissioner's Sustainable Insurance Strategy will bring insurance companies back to wildfire distressed areas and give all Californians real options for insurance. He will be finalizing new regulations this year.

He also created new first-in-the-nation wildfire safety regulations and a Safer from Wildfires framework in partnership with Governor Newsom's administration, giving homeowners and businesses powerful new tools to protect our communities and create more insurance coverage."

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