We live in CA and own a 6 unit building that is under rent control in the city of LA. Our building insurance is now due for a renewal, which of course, they are not going to renew. We were originally paying around $3000 annually for the insurance, which then increased to over $5,000. We are shopping around for a new insurance, which looks like it’s going to be over $13,000…more then double!!! And since the building is already under a “Rent Control” ordinance, we are not making a ton on profit. Is there anything we can do? And we are not alone in this crisis, other Landlords are dealing with the same issue now. Please advise. Is this even legal that they can hike prices like this overnight?
Eliza Marashlian asked 8 months ago 1 Answers
Joel Laucher Expert answered 7 months ago Dear Eliza,
I’m sorry to say there is a high likelihood the premium increases that you are citing are legal.
An admitted insurer can only increase its rates with the approval of the California Department of Insurance (CDI). So if your coverage was with an admitted insurer you can contact the CDI to verify the premium increase was approved. Here is the list of admitted insurers in California: https://www.insurance.ca.gov/0250-insurers/0300-insurers/0100-applications/upload/AdmittedInsurers.pdf
If the insurer is a surplus lines insurer, then there rates/premiums are not subject to CDI approval. Their pricing is more aligned with whatever the market will bear.
The key to finding the best coverage and pricing is to contact multiple agents and brokers and to ask them to submit your application for coverage to as many insurers as they represent. In other words, “shopping around.”
It is definitely preferable to end up with an admitted insurer if you can. Premiums have climbed dramatically in the last 5 years across all markets so your experience is, unfortunately, a common one – so despite your best efforts, you may not find a lower premium.
Best of luck to you,
Joel Laucher
Please login or Register to submit your answer