Among the documents that reach the buyer after the contract is signed, there is one that now weighs more than many others. Sammy Veicer describes it this way: "it will tell you whether your area has a flood zone, whether it is a fire risk area, what the level of fire risk is."

It is the Natural Hazard Disclosure, the NHD. And it is a legitimate reason to walk: if you learn from it that the house is in a flood zone and that changes your decision, you can cancel within the contingency and recover the deposit, which is sitting in escrow.

The six zones the law requires you to declare

Civil Code §1103 requires the seller of residential property to disclose whether it lies within one of six hazard areas mapped by state and federal agencies:

• Special flood hazard area — mapped by FEMA, the federal emergency agency.
• Dam inundation area.
• Very high fire hazard zone (Very High Fire Hazard Severity Zone).
• State responsibility area for wildland fire (wildland fire).
• Earthquake fault zone (Alquist-Priolo).
• Seismic hazard zone — soil liquefaction or earthquake-induced landslide.

In practice, the seller hires a specialized company that cross-references the address with the official maps and issues the report. The law does not set an exact delivery date; the requirement is to deliver it "as soon as practicable" — which means sitting on the document is not an option.

Sammy adds an item that is not on the statutory list but appears in these reports and affects daily life: proximity to an airport — approach path and noise.

Why this piece of paper became the insurance story

This is where the episode, recorded out of the experience of someone selling houses every month, runs into one of the biggest problems in today's California market. "We have had an issue here in recent years with insurance going up," says Sammy. The size of that increase is bigger than the sentence suggests.

The 2026 numbers:

• The average homeowners insurance premium in California rose 84% between the end of 2020 and March 2026. The average deductible went from $1,813 to $2,553 over the same period.
• The FAIR Plan — the state's insurer of last resort, for those who cannot get a policy on the private market — covered about 5% of California's single-family homes in March 2026, against 1.5% in December 2020.
• The Department of Insurance approved an average increase of 29,1%for the FAIR Plan, effective as of October 15, 2026. For part of the policyholders, the effective increase lands between 30% and 50%, depending on the address and the risk.
• The typical cost of the FAIR Plan in 2026 runs around $3,000 to $3,200 a year on the statewide average, reaching ranges of $5,000 to $12,000 in severe fire zones.

The root of the problem is the combination researchers have been describing: rising wildfire risk, an inflationary shock in rebuilding costs and a rate regulation framework that dates back to Proposition 103, from 1988. That is the tension Sammy describes when he talks about insurers being "uncomfortable" and negotiating with the state — several reduced or suspended the issuance of new policies in California. The regulatory answer, the so-called Sustainable Insurance Strategy, seeks to bring insurers back in exchange for more freedom to price risk.

Sammy's caveat in the episode is worth repeating, and it is an honest one: he is not an insurance specialist, and he recommends confirming every detail with a professional in the field.

The point that stops the purchase

There is a consequence many people discover too late in the process, and the episode states it clearly: if there is financing, the bank requires insurance in place. Without a policy, no funds are released. And if no insurer accepts that address, or if the amount breaks the budget, the purchase does not happen.

That is why the inability to get insurance is resolved, in practice, through the financing contingency: no insurance means no loan, and no loan means the buyer cancels within the deadline and recovers the deposit.

For flooding, the reasoning is similar and the bill is separate: an ordinary homeowners policy does not cover flood. In a special hazard zone, the lender requires separate flood insurance, generally through the federal program.

What to do before signing

• Get an insurance quote before the offer, by address. Not by city — the difference between neighboring streets can be thousands of dollars a year.
• Ask your insurance broker whether the address is accepted on the private market or whether it falls to the FAIR Plan. It changes the math and it changes the coverage.
• Read the level of fire risk, not just the "yes/no." There are tiers, and they price differently.
• Include the annual premium in the payment math. Where insurance costs $6,000 a year, that is $500 a month that does not show up in the mortgage simulation.
• Check the property's claims history in the seller's disclosures — prior claims affect the quote.

This text is informational and is not insurance advice. Amounts, zones and policy availability change by address and by carrier; consult a licensed broker.

Sources and verification

• California Civil Code §1103 and §1103.2 — obligation of the Natural Hazard Disclosure Statement and the six hazard zones to be declared.
• California Department of Insurance — approval of an average 29.1% increase for the FAIR Plan, effective as of October 15, 2026.
• Surveys on the California homeowners insurance crisis (2026) — 84% rise in the average premium between the end of 2020 and March 2026; average deductible from $1,813 to $2,553; FAIR Plan share at about 5% of single-family homes, against 1.5% in December 2020.
• Proposition 103 (1988) — regulatory framework for insurance rate approval in California, identified as one of the drivers of the current crisis.
• Sustainable Insurance Strategy of the California Department of Insurance — program to bring insurers back to the market in risk areas.
• Transcript of episode CM018 of the Cadê Moradia podcast, with Sammy Veicer.

Watch this part of the episode:

Hazard Report — starting at 19:10 · CADÊ BRAZIL