California E&S Insurance

Can't find insurance in order to close home due to undisclosed claim. Sellers threatening lawsuite if I walk. (California) Our offer was accepted on a home in town that we loved. We were the only offer and it was on the market for a month. The sellers disclosed they had a claim on the property for water damage which we were aware when making the offer. When I started shopping for homeowners insurance, I was getting quite a few denials for undisclosed reasons. Finally my local farmers agent disclosed that there was not one, but two water damage claims within the last 3 years, plus a third claim (perils) in the last 5 years. We were not aware of that. He sent me the auto-response that he got from Farmers which showed the claim numbers. Apparently what happened is that the two water loss claims were on back to back days. The first claim paid out "$0.00" and the second claim was paid out fully. I agree this looks like a clerical issue, but from the insurance agency's perspective, it's showing as two claims hence my many denials. Even their own insurance agent who they know personally and is insuring the house right now was unable to write a policy for me. Of the 25 insurance companies I've called, I've only managed to get two quotes and they are prohibitively expensive (\~$10k/yr for 1,600 sq ft. no fire zone no flood zone) because of the multiple claims. One of the quotes is an HO-1 policy which I don't think I'm comfortable with (and my lender might not approve). The other is from a non-admitted carrier which I also don't feel comfortable with (which my lender may also not approve). If I can't find reasonable insurance in price and coverage due to the system showing multiple water damage claims, I may be forced to walk. They have threatened to sue if I walk, so I'm in a bit of a bind here. Any advice? Do I have standing to walk? Had I known they had multiple claims, I would have approached my offer completely differently.

{
  "score": 0,
  "title": "Can't find insurance in order to close home due to undisclosed claim.  Sellers threatening lawsuite if I walk. (California)",
  "subreddit": "FirstTimeHomeBuyer",
  "num_comments": 13,
  "scrape_method": "apify_targeted"
}