Why Commercial Property Insurance Is Changing in California
Commercial property insurance is becoming one of the biggest challenges facing California building owners.
Higher risks from wildfires and earthquakes, along with fewer insurance companies willing to write policies, are changing how buildings are insured across the state.
As a result, owners and managers are facing higher costs, more questions during renewals, and greater pressure to reduce risk.
What Is Changing?
Insurance carriers are taking a closer look at every commercial property before offering or renewing coverage.
Instead of simply reviewing a building's claims history, many insurers now want to understand how well a property is prepared for future disasters.
Some of the biggest trends include:
- Fewer insurance carriers competing for California commercial properties.
- More detailed underwriting and property inspections.
- Greater attention to seismic safety and wildfire exposure.
- Increased interest in building upgrades that improve resiliency.
- More owners turning to the California FAIR Plan when traditional coverage is difficult to obtain.
How it Impacts You
For commercial property owners, insurance is no longer just another operating expense. It can affect financing, leasing decisions, capital planning, and property values.
Buildings that have strong maintenance programs, updated life safety systems, and documented risk reduction measures may be in a better position during insurance renewals.
Owners who delay needed improvements could face higher premiums, reduced coverage options, or additional underwriting requirements.
Seismic Preparedness Is Becoming More Important
Earthquake risk remains a major concern across California. As insurers continue to evaluate long-term risk, seismic resiliency is becoming a larger part of the conversation.
Understanding your building's seismic vulnerabilities, planning for required retrofits, and staying informed about local regulations can help owners make smarter long-term decisions while strengthening their property's overall resilience.
What About the FAIR Plan?
Some commercial property owners who cannot obtain traditional insurance are turning to the California FAIR Plan.
While recent changes expanded the commercial coverage limits available through the program, it is still considered a last-resort option and often requires additional insurance policies to provide broader protection.
Upcoming BOMA/GLA Event to Help
Insurance, building codes, and seismic regulations are becoming more connected than ever. That's why BOMA/GLA's Codes & Regulations Committee continues to bring members together with building officials, engineers, and industry experts to discuss the latest requirements and best practices.
Our upcoming Managing Seismic Upgrades and Building Approvals educational event on August 4th will explore what owners and managers need to know about California's evolving seismic requirements, permitting processes, and strategies for preparing buildings for the future.
As insurance companies continue placing greater emphasis on building resilience, these conversations have never been more important.
Staying ahead of these changes today can help protect your property, reduce future risks, and better position your building for tomorrow's insurance market.
