Home insurance preventing property sales close to wildfires
Published: July 17, 2017
Updated: July 24, 2018
Author: Luke Jones
CATEGORY: Home Insurance
Homes located within a defined distance of wildfires that are for sale cannot be closed because of restrictive insurance rules. If a property is located near enough to wildfire activity, insurance providers can withhold policies, leaving the home unprotected.
This presents a problem because many lenders refuse to give funds to prospective homeowners if there is no insurance in place. Speaking to CBC, Kristine Newell, a Prince George-based real estate agent, says this presents issues:
“When that happens, the lender won’t issue the funds, because they won’t release funds on a home that’s uninsured,” Prince George-based real estate agent Kristine Newell told CBC.
Newell adds buyers involved in a recent sale could not get home insurance because the property lay within 50km of a current wildfire. In this instance, the buyers postponed the insurance cancellation and could find another lender to write them a policy. However, it may not always work out like this.
Steve Kee, spokesperson for the Insurance Bureau of Canada (IBC), echoes the concerns:
“They’re going to look at how far away are you from a fire department or a hydrant … they’re going to look at how your property was built … the location, that kind of thing. This will all go into how they determine the risk factor for your property,” Kee stated.
Newell says buyers should ensure their insurance provider will give protection that is not affected by close wildfires.
“If the fire were any closer to somebody, they couldn’t get somebody to insure it. That could leave some buyers homeless and some sellers without any funds to complete on their next sale,” she concludes.