Image Credit: CFJC Today

By Amandalina Letterio

WILDFIRES AFFECT NEW HOME BUYERS

Insurance companies refusing to insure homes, boats, motorcycles near active wildfires

Aug 9, 2021 | 3:44 PM

KAMLOOPS — Many insurance companies are refusing to insure residential homes near active wildfires right now and it might be a struggle to get insured until the season is over.

“Nobody wants to insure something that’s going to be destroyed,” Brenda Colman, Mortgage Specialist at Invis, told CFJC News.

The Kamloops housing market is going strong, but the wildfires might be the reason you can’t close the deal on your new home.

“They could be approved for financing, the house is approved, but just because of the vicinity it is in within to the fires, the homeowners cannot get homeowners insurance to protect their investment,” Colman explained.

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People looking to take out new insurance policies are being refused by many insurance companies if there is a wildfire 25 to 50 kilometres away.

In some cases, new home buyers grapple to close the deal.

“So the people who are currently residing in the property will have to stay there until the new owners are able to get their financing, which part of it is due to the insurance,” Colman continued.

Many insurance companies feel the risk is too high to insure Kamloops homes right now, and your home is not only thing you’ll have trouble getting insured.

“Same thing goes with anything recreational; people buying boats, ATVs, motorcycles. They cannot get insurance right now just because we’re in the middle of three or four different forest fires approaching Kamloops at a fast pace,” said Jatin Jain, Advisor at Sussex Insurance Kamloops.

Residential housing sales dipped in July, but realtors say that’s normal for this time of year. Despite the insurance hurdle, now might actually be a good time to buy.

“Right now, a lot of people are holding off. So you may have a chance of actually getting into something maybe with a little less competition right now if you don’t hold off. As where it’s going to get a lot busier again come September and October,” said Chelsea Mann, President of the Kamloops and District Real Estate Association.

To protect yourself from losing a deposit, realtors and mortgage brokers recommend adding a clause to your contract that protects both the buyer and seller from being in breach and extends the contract until the insurance can be purchased.

Colman said this is a smart idea to ensure no one loses a deposit.

It’s not impossible to get insurance right now, but it is more difficult and might even be more expensive.

“This wildfire situation is probably going to continue until at least the middle of September, so we’re just moving all the closing dates out,” Colman said.