Levi Sumagaysay at CalMatters:
Like single-family homeowners in California, landlords are facing higher insurance premiums, too. And they’re passing along some of those costs to their tenants.
Many insurance companies have stopped writing policies in the state because of increased wildfire risks, but that’s not the only reason. They say in the case of any catastrophe, the potential costs of replacing any residential or commercial property, from labor to material costs, is just plain more expensive now. So even owners of properties in areas that are not at high risk for wildfires have had their policies canceled because their buildings may need repairs or improvements. Landlords are having to find other insurers, or having to turn to the ever-growing and more expensive FAIR Plan, the insurance industry-run plan that is mandated under California law to be the insurer of last resort.
This is where the insurance crisis could worsen the housing crisis, according to some experts. Increased insurance costs for properties other than single-family homes are starting to affect the rental market — in a state where almost half of residents are renters — and could compound the state’s housing problems, they say.