Insuring a property in Visalia certainly isn’t without complications these days.
Costs are higher, and even finding a policy can be complex. This is due in part to general inflation and the rising cost of everything, and largely due to the California wildfires we have seen over the last few years and the extreme losses that homeowners have suffered and insurance companies have been called upon to pay for.
There’s also the exodus of insurers. Many property insurance companies left the state altogether or seriously cut back on the number of policies they were writing to insure California properties.
Where does this leave us, and how can you adequately protect your Visalia rental investment?
Let’s investigate.
Insurers Leaving California
Insurance premiums have jumped by more than 10 percent over the last two years, and while there are several reasons for this that we will discuss, one of the things that impacts insurance rates is the fact that more and more insurers are deciding not to write policies in California. State Farm announced in 2023 that they would no longer issue new insurance policies to California homeowners due to “historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure and a challenging reinsurance market.” (Source: Kiplingers, 2023). Allstate soon followed and since then, a number of additional insurers have stopped issuing new insurance policies for homes and properties in the state. In the last year alone, we’ve lost Liberty Mutual and Nationwide as well. Other companies have reduced the number of policies they’re writing or are refusing to renew their existing business.
The loss of insurers willing to do new business has also been blamed on California’s strict regulations.
California’s strict insurance regulations, including Proposition 103, which mandates that insurers obtain state approval before raising rates, has been blamed for slowing down the process of adjusting premiums to reflect increased risks. Insurers argue that these regulations prevent them from raising rates quickly enough to cover rising costs and potential losses.
You may have also heard insurers complain about the complicated reinsurance market in California. Reinsurance is insurance for insurance companies, helping them manage risk. In California, the reinsurance market made it harder and more expensive for insurers to protect themselves against potential losses. Many of the companies who have left cited the reinsurance market as a reason for limiting or ceasing new business in California.
That leaves us with a handful of insurers writing most of the insurance policies throughout California.
This concentration is only increasing the limits on the supply of coverage available to consumers, especially following large loss events like the wildfires we saw early in 2025 in Los Angeles.
There’s not much you can do about insurers who are leaving the state. Find a good insurance agent who can ensure you’re getting the best policy options and the best value for the price you’re paying.
Rising Costs for Building Materials
The loss of insurance companies is just one part of what you have to navigate.
As a Visalia rental property owner, you’re also paying more for insurance because of the rising cost of construction and building supplies.
Inflation is leaving a lot of properties in Visalia and throughout California under-insured. It’s also contributing to higher costs on everything from metal to wood to labor. Supply chain issues have not completely been solved and just like property owners, insurers are paying more for construction costs, repairs, and rebuilds.
Natural Disasters, Namely Wildfires
California experiences even more fires than those we hear about on the news. In fact, according to Cal Fire, this state sees an average of over 7,000 wildfires annually, burning millions of acres. In 2024, there were more than 8,000 wildfires. These wildfires have been increasingly severe and costly. Many people blame climate change and fossil fuels. Others blame the mismanagement of forests in the state.
It’s probably a little of both.
These wildfires and other extreme weather events lead to more claims and increased costs for insurers. The cost of rebuilding homes after such disasters has also risen dramatically, making it difficult for insurers to cover claims and maintain profitability.
How Can We Help You Protect Your Visalia Rental Investment?
Insurance will be a challenge for rental property owners. But, you still need it, and we still recommend you work with an excellent agent who can help you navigate the current market. We’re happy to make a referral if you’re not sure where to turn. The FAIR plan is in place for owners who cannot find insurance elsewhere on the private market, but this insurance is more expensive and doesn’t cover quite as much.
It’s a stressful scenario, but we can help you protect your property. If you’re not already working with a Visalia property manager, this is a good time to consider it. Gather as much professional expertise as you can so that your investment is protected.
- Make Sure You Not Only Have Insurance, but Adequate Insurance
When was the last time you had your property appraised? Your rental investment might be more valuable than you think. And while that’s good news, it also means that replacing it in the event of a catastrophe would be more expensive than you might realize. Make sure you have enough insurance coverage to ensure you’d be able to replace or repair the property and its features after filing a claim.
- Consider Earthquake Insurance
All eyes are on the damage that wildfires are doing, but that’s not the only threat to California properties. The state does not mandate earthquake insurance, and your property insurance will only cover the damage done by a fire that starts because of an earthquake. Look into protecting your asset against the potential of an earthquake. You don’t want to be left at a complete loss if the big one hits and impacts this area.
- Require Renters Insurance from Your Tenants
Require renters insurance from the tenants who rent homes from you. This can be difficult to enforce, but it helps to mitigate a lot of risk that comes with renting out a home. It also means that your insurance policy will not be the first place to turn if a tenant causes expensive damage to the property.
We believe that tenants should have their own protection and insurance. There is renters insurance and there’s also tenant liability insurance. These are not expensive policies, and they protect a tenant’s personal electronics, clothing, and other belongings that aren’t covered by your insurance.
Risk Management and Rental Properties in Visalia
Insurance is a critical component to protecting your property, and understanding how to navigate the tricky insurance market right now is important. However, it’s not only insurance that manages risk and avoids liability.
There are other ways to ensure you’re avoiding disaster.
Start with good tenant screening. A lot of risk rests in the residents you have in your property. Will they leave damage behind that exceeds the security deposit? Will they cause conflicts and disputes? Will they violate or respect the lease agreement?
You want to make sure you’re placing tenants who will pay rent on time and take good care of your Visalia property.
You want to make sure your residents are safe, too. There’s hardly anything more important than your resident’s safety. Keep tenants safe from any potential dangers inside or outside of the property. For example:
- Make sure the home is structurally sound. Conduct thorough inspections before move-in and make any necessary repairs before occupancy begins. Stay on top of preventative maintenance and respond right away to repair requests so you can avoid expensive emergency repairs and deferred maintenance.
- Correctly install and test smoke detectors and carbon monoxide detectors. There are legal requirements that dictate where they’re placed. Make sure you’re in compliance.
- Provide bolts on all exterior doors and make sure you’ve invested in as much security as possible at your property.
- Ensure there’s enough lighting outside of the home. This will deter thefts and break-ins.
All of these things mitigate risk and keep rental properties in good, safe, and functional condition.
Partner with Visalia Property Managers
There are many good reasons to work with a local property management company in Visalia, like The Equity Group.
One of the best reasons, perhaps, is that you’ll limit your risk and liability. When you partner with a management company, you don’t have to worry about staying up to date on the laws and rental requirements. You don’t have to stress about placing the wrong resident in your property or making a mistake with the security deposit. You don’t have to chase down late rent or hold your residents accountable.
Your property managers do all this for you, and we will do it expertly.
The insurance situation in California offers property owners a lot to worry about. However, we’re following it closely, and we’ll bring you any updates and information as it becomes available. This impacts all of us, and it’s requiring a bit of creativity and innovation when it comes to keeping your investments safe.
If you’d like to talk about this further, please contact us at The Equity Group.
