The Future of Apartment Building Insurance in California in 2025

Q: Why are apartment building insurance California premiums so high?

Mostly because of climate-related risks like wildfires and earthquakes. High claims payouts are forcing insurers to raise premiums or exit the market.

Q: Do I really need earthquake insurance for my apartment building?

If you’re in California, yes. While not legally required, lenders often mandate it, and the risk of earthquake damage is significant.

Q: Are there discounts for upgrading my building?

Yes! Fire-resistant materials, sprinkler systems, and eco-friendly improvements can sometimes lower your insurance premium.

Q: Can I still get coverage if my building is in a high wildfire zone?

It’s harder, but not impossible. Some specialty insurers and state-backed programs still provide coverage for high-risk properties.

Q: How can I lower my apartment building insurance costs in 2025?

Shop multiple carriers, bundle policies, invest in risk mitigation, and provide insurers with proof of building upgrades.

Q: Is liability coverage included in apartment building insurance California?

Typically, yes. Most policies include liability protection for injuries or damages occurring on the property.

By Infinite | August 27, 2025

If you own or manage multi-family housing in California, you already know the insurance landscape hasn’t exactly been “stable” lately. Premiums are rising, carriers are pulling out, and regulations are changing faster than a San Francisco rent hike.

So, what does apartment building insurance in California look like heading into 2025?

Let’s find out.

Why Apartment Building Insurance, California, is in the Spotlight

California is a unique market. Between wildfires, earthquakes, and an ongoing housing crunch, apartment building owners face risks that many states simply don’t deal with. Insurers, naturally, are pricing those risks into policies, sometimes aggressively.

Property insurers are grappling with staggering wildfire-related losses, projected between US$28 billion and US$40 billion from the 2025 Greater Los Angeles wildfires alone. This has prompted many insurers to reassess their exposure in the state. (Source)

What’s Changing in 2025?

1. Climate Risks Are Driving Premiums

Wildfires are no longer a seasonal risk; they’re practically year-round. Insurers are tightening underwriting standards, requiring more fire mitigation measures before offering policies. Expect inspections, building upgrades, and proof of defensible space around your property to become standard.

2. Earthquake Coverage Gets Renewed Attention

Only 10% of Californians currently carry earthquake insurance (Source), but for apartment building owners, the risk is amplified. In 2025, we’re seeing more lenders requiring earthquake riders on policies before financing or refinancing multi-family properties.

3. Regulatory Shifts May Offer Relief

The California Insurance Commissioner is pushing reforms to keep insurers in the state by allowing them to use forward-looking climate models (instead of relying solely on historical loss data). This could help stabilize rates in the long run, but in the short term, expect continued premium hikes.

4. Green Building Incentives Are Emerging

Insurers are starting to reward “resilient” buildings. Apartment complexes with solar panels, fire-resistant building materials, and water-efficient systems may qualify for premium discounts in 2025. Sustainable design isn’t just good for the planet; it’s becoming a smart insurance strategy.

How Apartment Building Owners Can Prepare

Shop Around, Aggressively – Don’t accept the first renewal notice. Work with an independent broker who can access multiple carriers.
Invest in Risk Mitigation – Fire-resistant roofing, sprinkler systems, and earthquake retrofits can lower premiums.
Bundle Policies – Combining property, liability, and umbrella coverage often saves money.

Quick Comparison: Key Risks for Apartment Building Insurance, California

Risk	Impact on Premiums	2025 Trend
Wildfires	Very High	Premiums rising; stricter underwriting
Earthquakes	Moderate to High	More lenders requiring coverage
Water Damage/Leaks	Moderate	Increasing claims in urban complexes
Liability Lawsuits	High	Rising settlements & tenant protections
Green Upgrades	Positive	Discounts available for sustainable features

Wrap-Up

The future of apartment building insurance, California, is challenging, but not hopeless. Yes, premiums are climbing, and coverage is getting trickier. But with the right strategy, mitigating risks, staying ahead of regulations, and working with a broker who knows the California market—you can protect your investment and avoid nasty surprises in 2025.

At e360 Insurance Services, we specialize in helping apartment owners find coverage that balances cost with protection. Think of us as your guide through California’s insurance jungle.