Insurance agent

An insurance agent sets up coverage for the property. Vacant homes, rentals and homes under renovation often need a special policy.

When you need one

• Before you bid, ask the trustee or sheriff, your attorney and the insurer when the risk becomes yours under this sale’s terms, and have coverage ready by then. The sale becoming final, getting the deed and getting possession can happen on different days.
• A tax lien certificate isn’t ownership. You insure only if you later get the deed.
• In California, a trustee’s sale of a 1–4 unit home usually isn’t final until at least 15 days after the auction, unless an owner-occupant wins. Ask the trustee when the sale is final.
• Before renovation or renting it out.

How to find one

• Ask agents who write vacant-property, landlord or renovation policies, and compare quotes.

Questions to ask

• Do you cover vacant properties and renovations?
• Can coverage start the day this sale’s risk becomes mine, even before I have the deed or possession?
• What isn’t covered?

An insurance agent or broker helps you buy property and liability coverage. For investors the key decision is the type of policy. A standard homeowners policy is written for a home you live in. A rental (dwelling or landlord) policy is written for a home you rent out. Tell your agent how the home will actually be used.

Vacant homes are a special risk. Many property policies limit coverage for some losses, such as water damage, once a building has been vacant for more than 60 straight days. A California appeals court ruled in 2020 that this count can include days before you owned the home. That matters for anyone buying an empty foreclosure or bank-owned house.

In California’s wildfire areas, many owners can’t find private coverage. In California, they end up on the FAIR Plan, the state’s insurer of last resort. California’s FAIR Plan mainly covers fire, so most owners add a separate “wrap-around” policy for theft, water damage and liability. In California, compare the total of both quotes with any private offer before you bid.

Most homeowners and renters policies don’t cover flood damage, so you usually need a separate flood policy.

How they’re paid

• Ask how your agent is paid and whether they can quote several carriers. (We found no sourced typical commission figure. Ask the agent directly.)
• In California, if a claim is delayed or underpaid, you can file a free complaint with the Department of Insurance. The department says it has recovered more than $280 million for Eaton and Palisades fire survivors through direct intervention.

Check before you hire

• Tell the agent exactly how the property will be used: owner-occupied, rental, or vacant during rehab. Get the right policy type in writing.
• Ask how the policy handles vacancy and whether days before you bought the home count toward a vacancy limit.
• Ask whether the policy pays replacement cost or actual cash value, and what dwelling limit it would take to rebuild.
• Ask about flood coverage even if the home is outside a mapped flood zone.
• In California wildfire areas, compare private carriers, the FAIR Plan and wrap-around policies. Check whether an old roof limits your options.
• Confirm liability coverage for tenants and visitors on a rental.

Real stories

Private policy paid quickly after the Eaton Fire (2025)

Her house burned in the Eaton Fire. She had a standard private policy with Mercury Insurance that cost $1,264 a year. It offered up to $1.5 million for her home, other structures and belongings. That included up to $303,000 for living expenses. Within days the insurer wired tens of thousands of dollars to get her started.

Lesson: Full replacement-cost coverage from a private carrier made rebuilding far easier. Review your limits before a disaster, not after.

State regulator recovered $280 million for policyholders (2026)

After consumer complaints about wildfire claims, the California Department of Insurance stepped in directly. It said it had recovered more than $280 million from insurers for Eaton and Palisades fire survivors that way. It also brought an enforcement action against State Farm General after an exam found mishandled claims.

Lesson: If an insurer stalls or underpays, filing a complaint with the state insurance regulator is free and can work.

Non-renewed, moved to the FAIR Plan, underinsured (2025)

His private insurer declined to renew in 2024, so he moved to the California FAIR Plan. He paid $2,000 a year for a $686,000 maximum payout and $1,500 a year for wrap-around coverage. Because his roof was too old, he could only get “actual cash value” coverage. After the Eaton Fire, he expected to need loans to rebuild.

Lesson: Before you buy in a California fire zone, check what the FAIR Plan really pays: replacement cost or actual cash value. Also check what the property will cost to insure.

Water damage 57 days after closing; vacancy clause applied (2015 (ruling 2020))

A church bought a vacant house and was insured through its broker under a commercial policy. Water damage struck 57 days after escrow closed. The insurer denied the claim under a 60-day vacancy clause. The church and insurer settled with a loan of about $461,000 for repairs. A California appeals court later ruled the 60-day count includes time before the buyer owned the house.

Lesson: If you buy an empty foreclosure or REO home, tell your agent it is vacant. Get coverage written for that from day one.

Let flood policy lapse, then $100,000 in damage (2021)

When his mother owned the home, it carried flood insurance that cost about $650 a year. The couple let it lapse after being told the area wasn’t a flood zone. Then came Tropical Storm Henri and the remnants of Hurricane Ida. They estimated $100,000 to make the house livable and replace their car. Their homeowners policy paid nothing for the flood.

Lesson: Most homeowners policies don’t cover floods, so price flood coverage even outside a mapped flood zone.