Navigating California’s Challenging Insurance Market: The Impact on Apartment Owners


California’s insurance market is currently facing significant challenges, marked by soaring premiums, limited coverage options, and increasing regulatory complexities. Some carriers have left California entirely, while others have stopped writing in specific sectors. Apartment insurance is one of those difficult sectors with carriers like State Farm set to non renew over 40,000 policies this year. Apartment owners are feeling the pinch as they struggle to secure affordable and comprehensive insurance for their properties. Over the next three weeks, we’ll look at what apartment owners can do when facing California’s hard insurance market. Today, in part one we’ll delve into the state of California’s apartment insurance market and find out what makes it so difficult.

The State of California’s Insurance Market

Increasing Natural Disasters

California’s susceptibility to natural disasters, such as wildfires, earthquakes, and floods, has been a major factor driving up insurance costs. Recent years have seen a rise in the frequency and severity of these events, resulting in substantial insurance claims. For apartment owners, this translates into higher premiums as insurers seek to cover their increased risk exposure.

Regulatory Environment

The California Department of Insurance enforces stringent regulations on insurance companies, including controls on premium increases and requirements to offer certain types of coverage. While these regulations aim to protect consumers, they also make it challenging for insurers to maintain profitability. As a result, many insurers have reduced their presence in the state, further tightening the market.

Market Withdrawals and Reduced Capacity 

Facing high risks and regulatory constraints, several insurers have either scaled back their operations or exited the market entirely. This exodus has led to a decrease in available options for apartment owners, forcing them to contend with fewer insurers and higher premiums. Additionally, some insurers that remain in the market have imposed stricter underwriting criteria, making it harder for property owners to secure adequate coverage.


Written by Agent/Broker Aryk Freeman, Caldwell Insurance Services. For questions, please email or call 209-532-5102