California’s insurance landscape has been anything but stable in recent years. Carriers have exited the state, new ones have entered, and regulations continue to shift at a pace that leaves many consumers feeling uncertain. Insurance companies are stricter than ever when underwriting an apartment owner’s or landlord’s risk. If you’ve wondered why your premiums are changing or why coverage options seem limited, you’re not alone. By specializing in the real estate industry, we are intimately tuned in to the market trends, proactive strategies to protect property from the highest risks, and are aware of all the many carrier updates and changes carriers are making to adapt to this volatile marketplace. Our goal is to shine a light on the process to help the real estate industry navigate the unexpected changes the insurance industry continues to make so that our clients have confidence that their most prized assets are protected.
Two major areas carriers are focusing on right now to ensure they are offering terms to insurable risks are updates to buildings:
- One Important Area is Electrical Updates
Scrutiny from insurance carriers today with electrical systems is well-placed, given the risks they pose, specifically outdated panels. Many panels manufactured in the 1950s through the 1970s have been deemed obsolete due to significant manufacturing deficiencies that pose fire and safety risks. As a result, carriers require buildings to have modern circuit breakers and are no longer accepting knob-and-tube wiring, aluminum wiring, or PushMatic panels. Commonly restricted brands include Federal Noark, Federal Pacific, Stab-Lok, Zinsco, Magnetrip, Sylvania-Zinsco, GTE Sylvania-Zinsco, Bulldog Electric, PushMatic, Challenger, and any fuse-based systems. These older systems have been linked to shorts, fires, and other hazards, and most carriers now expect upgrades to be completed before policy inception. Few allow changes during the policy term. Updating your electrical panels not only reduces risk but also makes your property far more marketable and simplifies the insurance process.
Insurers are cracking down on outdated electrical panels, and it’s one of the biggest reasons properties get declined or non-renewed. Most standard or preferred carriers require upgrades before policy inception – waiting could mean losing coverage altogether. Updating your electrical system not only reduces risk but also makes your property more marketable and simplifies the insurance process, saving apartment owners thousands in premium dollars.
- Another Hot Topic is Habitability Exposures and Lawsuits
This has become one of the most pressing issues in today’s insurance market and a term you’ve likely heard, but why has it become so important? Simply put, habitability refers to a tenant’s right to live in a space that is safe and suitable for occupancy. Proactive maintenance and habitability coverage are essential to protect your investment and avoid costly surprises. When deferred maintenance leads to conditions that violate this standard, tenants often pursue legal action against landlords. Over the past few years, California has seen a surge in habitability claims – some valid, others questionable attempts to collect a payout. Having habitability coverage is critical because these lawsuits are costly and frequently settled out of court; carriers often pay up to the policy’s sublimit rather than incur hefty legal fees. Common triggers for claims include mold, plumbing failures, pest infestations, and structural issues. Protecting your property with proper maintenance and coverage not only reduces risk but also safeguards your investment.
Habitability claims are skyrocketing in California. We are finding that many apartment owners don’t realize they do not have habitability coverage on their insurance policy and are left exposed with the potential of having significant financial loss without any recourse. This is why it’s so important to consult with a specialist about your coverage and policy limits to ensure every apartment owner is properly covered.
Proactive maintenance and habitability coverage are essential to protect your investment and avoid costly surprises.
There are misunderstandings regarding admitted (standard) and non-admitted (non-standard) insurance companies, which can result in landlords feeling anxious or uncertain about being properly protected.
Non-Admitted Carriers and the California FAIR Plan
When standard markets limit coverage or decline properties entirely, non-admitted carriers and the California FAIR Plan can provide critical alternatives. Non-admitted carriers are not domiciled in the state of California and operate without state approvals and do not adhere to state-specific insurance regulations. They are designed to offer flexible underwriting and coverages and can insure higher-risk properties – such as those with older roofs, outdated electrical systems, or in wildfire-prone areas – but they often come with higher premium surplus-lines fees. It’s important to consult with an insurance broker and to fully understand your policy and coverage so that you know what you are and are not covered for. The FAIR Plan serves as the insurer of last resort, offering fire-only coverage that must be paired with a separate policy from a different carrier called a Difference in Conditions (DIC) policy to fill coverage gaps like liability, water damage, and theft. Both options are valuable safety nets, but they are generally temporary solutions.
Pro-Active Planning and Meeting Expectations
Navigating California’s property insurance market in 2026 requires proactive planning and knowledge of carrier expectations. Our team of industry specialists helps property owners by guiding them through inspections, identifying electrical and habitability risks, and exploring alternative placement options that others are not aware of. From admitted carriers to non-admitted solutions that are viable options, it’s imperative to have a specialist servicing your risk management portfolio. By addressing these key factors early, owners can maintain coverage, reduce risk, and ensure their properties are protected even in the most challenging insurance environments.
Navigating California’s insurance market in 2026 requires more than luck – it takes planning and expertise. If you have any questions or concerns about your portfolio, or want to make sure that what you currently have in place is what you actually need, reach out to our team. As a member of the Apartment Owners Association of California, we provide a free risk analysis of your portfolio. Don’t passively renew your insurance policy – contact your AOA insurance team at GS Insurance Solutions today to protect your property, reduce risk, and receive superior solutions to California’s rapidly changing insurance challenges. With the AOA Insurance Program and our team of industry experts, our mission is to help all apartment owners and landlords stay informed of the most competitive products and solutions available in this rapidly changing marketplace.f
GS Insurance Solutions is the exclusive endorsed broker for the Apartment Owners Association of California, Inc. For more information on the full area of products and services they offer that are tailored to your specific needs, please call Anthony Miller or his team at 800-827-4262, email him at [email protected], or visit www.gsisol.com.