Landlord Insurance is Disappearing and What You Should Know

Landlords across California are facing a growing insurance dilemma. Securing a policy that offers sufficient coverage without exorbitant deductibles has become an increasingly difficult task. Many of the top insurance providers have completely stopped issuing new policies, and those that remain are making it more challenging to secure coverage.

At Pivot Property Management, we recently assisted a new client in obtaining landlord insurance, but the process was far more complicated than it should have been. Many insurers had either stopped offering policies in California, had deductibles that rendered coverage unaffordable, or refused to add the property management company as an additional insured party.

If you’re struggling to secure insurance, reach out to us at 310-800-3064. At Pivot Property Management, we specialize in helping landlords navigate the current insurance market, protect their properties, and stay ahead of regulatory changes.

Key Points to Consider:

• Major insurers are leaving California as companies like State Farm, Liberty Mutual, and Travelers stop writing new landlord policies.
• Overregulation is driving insurers out, as laws like Proposition 103 prevent them from adjusting rates to reflect actual risks.
• Some insurers, such as Steadily, Bamboo Insurance, and Amica, are still offering policies, though with stricter requirements.
• The FAIR Plan offers basic fire coverage but comes with higher costs and limited protection, serving as a last resort for landlords.
• Landlords must act quickly as insurance availability continues to shrink and rates keep rising.

Table of Contents:

• Why Is Landlord Insurance So Hard to Find in California?
• How Proposition 103 Is Exacerbating the Problem
• Which Companies Have Stopped Offering Landlord Insurance?
• Which Companies Are Still Offering Landlord Policies?
• The FAIR Plan: A Last Resort for Landlords
• What Should Landlords Do Now?
• FAQs About Landlord Insurance in California

Why Is Landlord Insurance So Hard to Find in California?

The California insurance market is in turmoil, and landlords are bearing the brunt of the consequences. What was once a straightforward process—insuring a rental property—has now become a maze filled with rejections, sky-high deductibles, and non-renewals.

The root of the problem lies in California’s strict regulation of the insurance industry, which makes it difficult for companies to price policies based on actual risk. The primary factor? Proposition 103.

How Proposition 103 Is Exacerbating the Problem

Enacted in 1988, Proposition 103 was intended to protect consumers from steep rate hikes. However, it has had unintended consequences, worsening the current insurance crisis.

1. Insurers Can’t Adjust Rates Based on Risk
   In most states, insurers can set prices based on future risk models, which take into account factors like climate change, wildfire risks, and rising construction costs. In California, insurers are required to use historical data, which fails to reflect the increasing risks—forcing companies to operate at a loss.
2. Bureaucracy Slows the Rate Adjustment Process
   In California, the process of applying for a rate increase can take years, while in other states, insurers can adjust their rates in just a few months. With rising wildfire claims and other disasters, insurers are unable to raise premiums to compensate, pushing many out of the market.
3. Public Challenges Block Rate Adjustments
   Proposition 103 allows consumer groups to challenge rate increases, resulting in lengthy legal battles and delays. Faced with these challenges, many insurers are opting to leave the state entirely. The result? Fewer insurers, rising premiums, and more landlords left scrambling to find coverage.

Which Companies Have Stopped Offering Landlord Insurance?

Several major insurance companies have pulled out of the California market in recent years, including:

• State Farm – No longer writing new policies in California.
• Liberty Mutual – Has stopped offering home or landlord insurance in the state.
• Travelers, Geico, and American Family – Have ceased taking new business in California.
• Mercury Insurance – Requires bundling with auto insurance.
• Obie & Honeycomb – No longer providing policies for landlords.
• Lightspeed Insurance – Limited to offering fire, wind, and vandalism coverage only.

If your landlord insurance is nearing renewal, act quickly—these restrictions could tighten even further in the coming months.

Which Companies Are Still Offering Landlord Policies?

While fewer providers are offering policies, a handful are still writing landlord insurance, although with stricter requirements:

• Steadily – Offers reasonable deductibles and allows property managers to be listed as additionally insured.
• Bamboo Insurance – Recently teamed up with Delos Insurance to continue writing new policies.
• AIS & California FAIR Plan – Requires property photos and a longer application process.
• Amica – Selectively insures properties based on internal risk assessments and requires you to insure your primary residence with them.
• Insurify – Covers condos, but has high deductibles ($5,000 minimum) and mixed reviews.

For additional information, consult our guide to landlord insurance.

The FAIR Plan: A Last Resort for Landlords

If you’re unable to secure traditional insurance, the California FAIR Plan might be your only remaining option.

What is it? A state-run program that offers basic fire insurance for properties deemed high-risk.

Limitations:

• More expensive than standard policies.
• Offers less comprehensive coverage—often requiring you to purchase a separate liability policy.
• Has a lengthier application process compared to traditional insurers.

While the FAIR Plan is far from ideal, it may be necessary for landlords located in wildfire-prone areas.

What Should Landlords Do Now?

• Get Quotes from Multiple Providers – Don’t wait until your policy expires to start looking.
• Act Quickly – Insurance companies are constantly changing their offerings. A policy available today may not be available tomorrow.
• Explore the FAIR Plan if Necessary – While not the best option, it can provide temporary coverage while you search for better alternatives.
• Stay Informed – Keep up with state regulations and changes in the insurance market to avoid surprises.

We’re Here to Help You Secure Insurance Coverage

Finding landlord insurance in California is more difficult than ever, but options still exist. If you need assistance navigating this challenging market, schedule a call with one of our experts at Pivot Property Management.

We believe that life should be enjoyable, not spent worrying about the details. That’s why we are committed to making property management as easy as possible. We care about you, your property, and your tenants, and we handle it all—so you can focus on living your best life.

FAQs About Landlord Insurance in California

Why are major insurers reducing coverage in California?
Increased risks from natural disasters like wildfires and regulatory limitations on rate adjustments have caused some insurers to scale back their operations in the state.

What is the California FAIR Plan?
The California FAIR Plan is a state-run program that provides basic fire insurance for properties that can’t secure coverage from traditional insurers.

How can landlords improve their chances of obtaining insurance?
Implementing risk mitigation strategies, keeping open communication with insurers, and consulting with property management experts can improve your chances of securing coverage.

Are there still insurers offering landlord coverage in California?
Yes, companies like Steadily, Lemonade Home, Mercury Insurance, Farmers Insurance, Allstate, and Safeco Insurance continue to offer landlord insurance in California.

What should landlords consider when choosing an insurance provider?
When selecting an insurance provider, it’s essential to evaluate coverage options, premiums, deductibles, and the insurer’s financial stability.