First-time homebuyers struggle with absurd ultimatums from insurance companies: 'It's across the board everywhere right now'

First-time homebuyers are facing an ultimatum from insurance companies, making the already expensive process of purchasing a home an even bigger headache.

What's happening?

In the Pittsburgh area, insurance companies are denying coverage to homes with aging roofs, insisting they be replaced before issuing a policy, per the Pittsburgh Post-Gazette. Sellers are also running into issues. Kay Barchetti, a Compass Realty agent, told the outlet, "There's a lot of people if they don't put a new roof on, they can't sell their house."

Another real estate agent, Laurie Kiss, noted that 15-year-old roofs are where insurers start putting pressure on homeowners, despite advancements in materials.

"Most roofs now are made with 30-year shingles," she said. "But here we are at 15 years having issues."

Why is insurance denying coverage important?

Insurance companies have been denying coverage across the country as the number of extreme weather events has increased. In Pittsburgh, hail and winter weather are the big culprits. In Florida and California, they're hurricane damage and fire damage, respectively.

For example, in late December, Liberty Mutual announced plans to roll back and eventually eliminate coverage for California condo and apartment renters, prompting backlash.

"It's across the board everywhere right now," Etti Baranoff, a professor of insurance and finance at Virginia Commonwealth University, told the Pittsburgh Post-Gazette. "They are not just jacking up prices. You're talking about reduction in availability and affordability. It's both. It's not just the premiums. It's also the availability of it."

Unfortunately, the leading cause of extreme weather events is human activity. Dirty energy leads to excess pollution pumping greenhouse gases into the atmosphere, creating a vicious cycle of extremes damaging the environment and humans' way of life. And while people need to make changes, being unable to protect one's home and assets makes other positive changes harder to achieve.

What's being done about insurance coverage denials?

Kiss now has a contingency clause in her contracts that allows buyers to back out of a deal if they can't secure insurance coverage or the quoted premium is higher than expected.

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Some states have laws and policies to protect homeowners. For example, Idaho recently proposed the Idaho Wildfire Risk Mitigation and Stabilization Pool Act, meant to assist homeowners in securing funds to protect their homes and hopefully encourage insurers to continue coverage or lower premiums.

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