Steve Welty

Issue# 35

January 2025

Happy Saturday Housing Heroes,

We recently onboarded a new client, and getting landlord insurance for their property was a huge challenge. Most providers weren’t writing new policies in California, had sky-high deductibles, or refused to add their property management company as additionally insured. After a long search, we finally found coverage, but the process was frustrating and way harder than it should be.

Unfortunately, this isn’t just a one-off issue. The housing insurance market in California is collapsing, and many property owners are struggling to find affordable coverage—or any coverage at all.

Why Is This Happening?

The core issue? Overregulation plays a huge role in this. Strict state policies have made it nearly impossible for insurers to adjust rates based on actual risk, forcing many to pull out of California entirely. Those that remain either limit coverage or make it prohibitively expensive, leaving housing providers with few viable options.

Much like California’s housing market, the insurance industry is bogged down by outdated laws and government intervention that makes it harder for businesses to operate profitably. The biggest culprit? Proposition 103, a law passed in 1988 that was meant to protect consumers from skyrocketing rates but has had unintended consequences.
Insurers can’t adjust rates to match risk – With rising wildfire threats, increased reinsurance costs, and skyrocketing construction prices, insurance companies are losing money in California. The government controls how much they can charge, making it impossible to operate profitably.
Filing for rate increases is a bureaucratic nightmare – Unlike in other states, insurers in California can’t use wildfire modeling to calculate future risks and must rely on historical data. This means they can’t adequately price policies based on increasing climate threats.
Public intervention slows the market further – Prop 103 allows anyone to challenge rate increases, leading to endless delays and lawsuits that prevent insurers from making necessary adjustments.

Sound familiar? This is the same overregulation that has crippled California’s housing market, making it harder for developers to build and housing providers to operate profitably.

The result?

Insurance companies are leaving, and housing providers are left scrambling for coverage.

Who’s Still Writing Policies?

Many major insurers have stopped offering landlord insurance in California, including:

Liberty Mutual, Travelers, State Farm, American Family, and Geico – No new policies in CA.
Mercury Insurance – Requires bundling with auto coverage.
Obie & Honeycomb – No longer taking new business in CA.
Lightspeed Insurance – Limited to fire, wind, and vandalism coverage only.

If you’re still looking for options, here are some providers still writing policies in California:

Steadily – One of the better options we’ve found. Offers reasonable deductibles and allows property managers to be listed as additionally insured.
Bamboo Insurance – Recently secured a surplus line from Delos Insurance, allowing them to write new policies in California.
AIS & California Fair Plan – Requires property photos and has a longer application process, but they are still issuing policies.
Amica – Selectively insures properties based on their internal risk assessment map and requires insuring your primary residence with them.
Insurify – Will insure condos but has high deductibles (minimum $5,000) and mixed reviews.

Please note: We are not affiliated with any of these insurance providers—this is purely an educational update to keep you informed. Our goal is to help property owners stay ahead of the game and protect their investments in an increasingly unstable market.

What’s Been Your Experience?

If you’ve recently struggled to get landlord insurance in California, I’d love to hear your story.

Which providers have denied you coverage?
Which ones actually followed through?
How much have your premiums gone up?

Hit reply and let me know. Your insights will help other housing providers navigate this mess and hopefully avoid some of the same headaches.

🎥 Watch My Podcast with Erik Motsenbocker to Learn More

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