Did You Know? Insurance Companies in California are Tightening Standards to Qualify for Coverage
Navigating the Changing Landscape of Property Insurance in California
In California, insurance remains challenging as property owners face dwindling and costly options, alongside other overlooked challenges. Keep reading to learn more…
Property insurance is one of the first things an owner will obtain for a new investment, and it is undergoing a significant transformation in California. As insurance companies confront increasingly stringent state regulations in California, the industry has reacted with the withdrawal of some insurance companies from offering coverage and with increased insurance premiums.
Another pivotal reaction to state regulations is the heightened requirements set by insurers. Owners discover that insurers have tightened eligibility criteria to mitigate risk, mandating specific upgrades and remediation measures. Consequently, qualifying for coverage becomes increasingly challenging for property owners unless they improve their properties.
For instance, property owners seeking coverage may be required to upgrade circuit breaker panels manufactured by Bulldog or Federal Pacific. These panels, known for their outdated designs and increased risk of electrical fires, pose a liability to insurers and are thus subject to scrutiny.
Moreover, insurers are increasingly demanding the remediation of slip hazards on insured properties. Whether it's uneven walkways, slippery surfaces, or other safety hazards, owners must address these issues to meet the insurers' standards and qualify for coverage.
Fire safety standards have also increased, particularly in San Francisco, where numerous insurance companies are now mandating property owners to upgrade their fire alarm systems. These upgrades are necessary to meet updated tests ensuring the audibility of alarms, a requirement commonly referred to as the pillow test.
LL CRE has experienced a notable rise in these requirements imposed by insurers, which has added complexity to the transaction process. Our expert commercial real estate team has the experience, leadership, and knowledge to guide you through these challenges and ensure a smooth transaction.
Count on LL CRE to lead you to success in an increasingly complex commercial real estate transaction environment. Contact us to discuss your goals and concerns:
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