California E&S Insurance

Ugh.  We are selling--or trying to sell--or CA rental property.  It was on the market 3 days and we got a great offer and took it on Tuesday.  We've now fallen out of escrow.  Why? The buyer struggled to even find someone who would insure it, and when they did, it was... $6k.  We had a claim in 2020 that was about 40k.  It had nothing to do with natural risks.  A toilet supply line broke, ran all night, and flooded the floor below.  It's frustrating because that could happen in any home--and I'd even argue that it is more likely to occur in some other home than hours since ours now has new supply lines--but insurers just see a "water" claim and either walk away or offer ridiculous quotes.  Since many don't really want to be doing business in CA, it's a great excuse to not even offer a quote. Any suggestions on how to proceed?  Clearly, this is going to be an issue for any buyer, unless maybe they are a cash buyer (but even then, I'd think most people won't self-insure and would still shop insurance before they close).  We would have offered a sizable credit to this buyer, but didn't even get to that point. If worst comes to worst, we can keep renting it, but don't want to.  I'm ready to be done being a long-distance landlord, and we were hoping to use the equity to buy a residence when we move this fall.  It technically makes money, but only because our mortgage is on 2007 prices. One of the many reasons I wanted to sell was seeing an upcoming CA insurance disaster.  Looks like I was right, but also too late.

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