Navigating the Apartment Insurance Crisis in Los Angeles & South Bay

The Insurance Crisis

Apartment owners across Los Angeles and the South Bay are facing an insurance crisis. With major carriers exiting California and premiums climbing as much as 30% year-over-year, many landlords are suddenly left without coverage. This guide helps multifamily owners in Los Angeles, Torrance, Redondo Beach, Gardena, Hawthorne, El Segundo, Manhattan Beach, Hermosa Beach, Lawndale, and Lomita find practical solutions.

Why Insurance Companies Are Dropping Landlords in Los Angeles & South Bay

In recent years, insurers have grown increasingly reluctant to cover California multifamily properties. Wildfire risk, rising claims costs, and market instability have pushed several top carriers out of the state. In 2024 alone, the California Department of Insurance reported that more than 345,000 policies were non-renewed statewide, leaving property owners scrambling to secure coverage.

Six Key Steps for Landlords After Being Dropped

1. Assess Your Risk Profile

Insurance carriers are looking closely at property age, maintenance, and tenant profile. A 1960s garden-style apartment in Gardena may be viewed differently than a 2005 building in Manhattan Beach. Knowing your building’s risk factors helps you negotiate better with underwriters.

2. Work With a Specialist Broker

Not all insurance brokers are created equal. Seek out brokers who specialize in multifamily in Los Angeles County and South Bay markets. They often have direct relationships with niche carriers willing to insure “hard-to-place” properties, even those with older plumbing or Section 8 tenants.

3. Explore the California FAIR Plan

The California FAIR Plan serves as a last-resort insurance option. While more expensive and limited in coverage, it ensures your building is never left completely uninsured. In cities like Hawthorne and Lawndale, many landlords rely on FAIR Plan fire coverage paired with supplemental liability policies.

4. Bundle and Layer Coverage

Sophisticated landlords are increasingly layering policies—combining FAIR Plan fire coverage with Difference in Conditions (DIC) and liability policies. For example, an El Segundo owner of a 12-unit building layered three policies together to secure $5M in total protection.

5. Leverage Risk Mitigation Upgrades

Carriers reward proactive landlords. Installing fire-resistant roofing, updated electrical panels, or modern plumbing can reduce premiums by 10-15%. In Hermosa Beach, a landlord who upgraded sprinklers across a 24-unit complex cut their annual premium from $58,000 to $49,500.

6. Review Your Coverage Annually

The market is shifting fast. Policies that were competitive in 2023 may be overpriced by 2025. Annual reviews help South Bay landlords adapt to changing premiums, market exits, and new carrier entrants.

Frequently Asked Questions

1. Why are apartment insurance premiums so high in Los Angeles and the South Bay?

Premiums are rising due to wildfire risk, high litigation costs, and carriers pulling out of the California market. The South Bay’s aging building stock—many properties built between 1950 and 1975—also increases risk factors.

2. What if no carrier will insure my multifamily property?

If private insurers decline coverage, the California FAIR Plan provides a last-resort policy. You can also “layer” coverage with supplemental liability and DIC policies to create comprehensive protection.

3. How much coverage should I carry for my apartment building?

It depends on building size, location, and lender requirements. Most South Bay multifamily owners maintain at least replacement cost coverage and $2M–$5M in liability. Lenders often require specific coverage minimums to maintain financing.

4. How can I reduce insurance costs for my apartment property?

Invest in upgrades—new roofs, fire-resistant materials, updated electrical, and plumbing systems. Partner with a broker specializing in multifamily insurance, and review your policy annually to adapt to market changes.

Take Aways

Being dropped by your insurance company is stressful, but it’s not the end of the road. With proactive steps, expert guidance, and knowledge of South Bay market dynamics, Los Angeles & South Bay landlords can still protect their multifamily investments. Stay vigilant, leverage local expertise, and explore all available insurance strategies to keep your properties covered.