Belmont Hills vs. Foster City Flats: Why Insurance is the New X-Factor in San Mateo County Real Estate

Location, Location… Insurability

For decades, the mantra in Bay Area real estate has been simple: location is everything. Proximity to top schools in Palo Alto, a short commute from San Mateo, or stunning views from the hills of Belmont commanded the highest prices. In 2026, that formula is incomplete. A new, critical factor now dictates value and viability: insurability.

As a broker with licenses in real estate, mortgage, and insurance, I see this daily. A home’s price tag is only the beginning of the story. The hidden, ongoing cost of homeowner’s insurance is now a primary driver of affordability and can make or break a deal in San Mateo County. The landscape is split between two major risks: fire in the hills and flooding near the bay.

The Hillside Dilemma: Fire Risk in Belmont, San Carlos, and Woodside

The beautiful, wooded canyons of neighborhoods like Belmont, San Carlos, Hillsborough, and Woodside are highly desirable for their privacy and views. However, they are also increasingly located in areas designated as Very High Fire Hazard Severity Zones (VHFHSZ).

• Carrier Retreat: Major insurance carriers have been reducing their exposure in California, non-renewing policies in these zones. This leaves homeowners with fewer, and far more expensive, options.
• The FAIR Plan: The California FAIR Plan is often the insurer of last resort, but it provides very basic coverage and is not cheap. Buyers often need a second, costly ‘difference in conditions’ policy to get the comprehensive coverage a mortgage lender requires.
• Mortgage Impact: Lenders will not fund a loan without adequate homeowners insurance. I’ve seen situations where a buyer qualifies for the loan on paper, only to find the $10,000+ annual insurance premium pushes their debt-to-income ratio too high, jeopardizing the entire transaction.

The Bayshore Gamble: Flood Risk in Foster City and Redwood Shores

On the other side of Highway 101, communities like Foster City and Redwood Shores face a different challenge: flood risk. While protected by an impressive levee system, their location at or below sea level places them in designated flood zones according to FEMA maps.

• Mandatory Flood Insurance: If you have a mortgage on a property in a special flood hazard area, your lender will mandate you carry a separate flood insurance policy, typically through the National Flood Insurance Program (NFIP) or a private carrier.
• A Separate, Significant Cost: This is not part of a standard homeowner’s policy. It is an additional, and often substantial, annual expense that must be factored into your total housing cost. The condition of the Foster City levee system is a constant topic of discussion and directly impacts these rates.
• Value Proposition: The question for buyers is whether the lifestyle benefits of these master-planned communities outweigh the added cost and long-term risk associated with potential sea-level rise.

Alan’s Pro Tip

Do not wait until you are in contract to investigate insurance. This is a critical mistake. When my clients are interested in a property in the hills of San Carlos or a waterfront home in Foster City, one of the first steps we take—before even considering an offer—is to get a comprehensive insurance quote. I leverage my insurance network to get a clear picture of the annual cost. This simple step provides leverage and prevents catastrophic surprises. We’ve walked away from deals where a seemingly attractive price was completely negated by a projected $15,000 annual insurance premium. Getting this data upfront is non-negotiable in today’s market.

Conclusion: A Three-Dimensional Approach is Required

In the current San Mateo County market, evaluating a property solely on its list price and location is a two-dimensional approach to a three-dimensional problem. The third dimension is risk, quantified by the cost of insurance. Understanding this interplay between the property (real estate), your loan (mortgage), and its protection (insurance) is the only way to make a sound investment. Whether you are drawn to the views from the hills or the lagoons of the bayside, a thorough analysis of your insurance liability is the first step toward a successful purchase.

Disclaimer:
The market trends, interest rate data, and policy interpretations provided in this article are for informational purposes only and do not constitute legal, tax, or investment advice. The real estate market and mortgage rates are subject to rapid change. Please contact us directly for the most current information and personalized advice.

Real Estate and Mortgage Services provided by:
Golden Gate Realty and Finance Inc.
CA DRE License #02361979 | NMLS #2776762
Principal Broker: Alan Wen | CA DRE #01812220 | NMLS #356521

Insurance Services provided by:
POM Peace of Mind Insurance Agency
CA DOI License #0N02495
GA Principal: Alan Wen | CA DOI License #0E21429