My California multiunit insurance will not be renewed, need help for new policy.
I have some properties in Oceanside, a multiunit west of the 5, and another in the small foothills. I was already informed by State Farm that they will not be renewing my multiunit policy. I'm sure several here has or will have the same issue in areas like mine, there are many multiunits out there. Does anyone have any success renewing their policy? Any recommendations of a broker or company that will insure these properties? Any other suggestions?
I'm guessing a considerable price hike will take place and will have to pass it on to the tenants.
Thanks for any help.
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#4 All Forums Contributor
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Why are they non-renewing? I think I heard something about this on another thread?
Just what I gather, bottom line it's about money. Certain properties are located in what insurance companies deem as high risk areas like flooding and fire. Over the years because of California insurance regulation policies, companies like State Farm were unable to raise premiums fast enough in these areas to meet the current insurance costs. Now rather than lose money, they are not insuring like 72000 policies in California, particularly in these risky areas.
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#4 General Real Estate Investing Contributor
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I don't have anymore Ca properties but the Santa Clara Farmer's office underwrites an apartment building in coastal wa. I got a letter jacking up my rate considerably and it went on to state that I would not be renewed for 2025. The property was close to the ocean and a forested area, so flood and fire hazard, they said.
So I went looking for a new company with no success. I then located the property with GPS and was able to demonstrate that the flood and fire risk was not valid. They said the building would need to be updated for plumbing and electrical as it was 65 years old.
They gave me a punch list of items which we completed and agreed to an inspection which only took place on paper.
Long story short, my rate was knocked back to 2023 and policy will be renewed. They never reviewed any plumbing issues, the electrical fixes were very sane and affected safety. All for fixing safety!
We spent 5-6k total. Key was getting them to the table and providing us a list of todos.
We are with Farmers, but I don't think that matters. All the best!