Here's just a snippit of what Brooke is about.
Because of the Waldo Canyon fire (and others in Colorado), we want to know what is going to happen with real estate and how it will affect things. My opinion is that it will continue to be one of the greatest places to live, and values will remain stable. As families buckle down to re-build, the rental market will continue to see low inventory. Some loan underwriters may not provide loans in the area, insurance might be a challenge, etc. Well, I hope to answer a couple of those questions. As the fire is now 70% contained and expecting 100% containment by mid-July.... hopefully this is all good news. Most residents of unaffected homes have returned home; residents of fire damaged homes will be returning this Thursday with their insurance adjusters. As nice as it is that the air is returning to normal, life will not be "normal" along the west side of town for months and even years. Because Colorado Springs is one of the most beautiful places to live, I am fairly certain most residents will rebuild. But for those that want to buy homes in the area soon, what are they in for?
I received a message from my State Farm agent that they are operating business as usual, handling claims and State Farm planning to re-assess insurance policies in 2013 following a busy hail, and now fire, year in 2012 in Colorado.
I am awaiting a statement from another agent I work with at Farmer's As far as I know they are also business as usual with restricted policies in certain zip codes.
I understand USAA is not writing new insurance policies in Colorado at all at this time. This WILL affect us locally, with military presence, but we have great local agents and buyers can consider switching back to USAA sometime after their home purchase and after the dust settles.
There is a recommendation out there to possible invest in flood insurance in burn areas and potential high water run-off areas.
My understanding is that loan underwriters may see some red flags in evacuated zip codes, but I just had lunch with a lender-friend and they have 5 of 6 investors that are reviewing those areas and still offering loans. Restrictions will be lifted even more once the fire is 100% contained, obviously lenders & insurance agents don't want to provide a loan or insurance in areas still in the potential fire danger area.
Bottom line - check with your real estate professional, lender and insurance agent. Life is still happening in Colorado Springs and it is in my opinion still one of the greatest places in the world to live!!!
We received the following email statement from the Colorado Association of Realtors:
Insurance Binding Restricted Due to Colorado Wildfires
All insurance binding authority is automatically suspended by insurance companies during times of an impending disaster and during times of disaster. The suspension occurs at the time an impending disaster warning for a geographical area is announced by local, state or federal government concerning any weather related event which is announced as a potential disaster. Binding Authority is also immediately suspended at the time of disaster, when disaster occurs without warning. Examples of disasters that cause automatic suspension are: wildfire, hail, tornado, hurricane, riot, civil commotion, or earthquake.
In this instance, the burning of wildfires located throughout Colorado has been determined as a cause to immediately suspend binding of insurance for the affected areas.
The suspension of binding authority applies to all real estate transactions, (new business, reinstatements, increased coverage and additional coverage). Insurance companies restrict this authority so that they do not bind a risk where insurance is being purchased through fear of loss, due to any increase in normal hazard from any source. Limitation is applied to help the insurance companies control their exposure to high-risk conditions and allow them to focus on the needs of, and obligations to, their existing customers during the time of disaster. No insurance coverage shall be bound, no applications accepted, or no coverage increased in any areas determined by the insurance company at risk for damage by fire or smoke.
After any other disaster event, binding authority is restored when notification is received from the Service Center. Zip codes are evaluated (both restricted and released) individually. Insurance companies will continue to evaluate the situation and once an area has been deemed safe from further damage from the specific fire (including potential smoke damage), authority will be reinstated and real estate transactions may resume.
This is expected any day now in Colorado Springs. (Source Colorado Association of Realtors)
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