Why insurance matters to renters, landlords and California

A year and a half after the Eaton Fire, Gil Barel is still waiting to move back into the Pasadena home she has rented for nearly a decade.

Her complex did not burn down, but smoke engulfed it for days during the January 2025 fire. Barel wants to make sure it’s safe for her and her two children, one who’s college-age and one who’s 12, to move back. A test she ordered found toxic materials; now she’s waiting for the result of more testing her landlord is required to do because of a new California law.

Her landlord got the unit cleaned in March, but then Barel found various belongings under the sofa and behind other furniture, which indicated to her the cleaning was superficial. She said it was also obvious the floors and walls were not properly cleaned.

“The issue is that I have no control,” Barel said. “It really depends on the conversation between my landlord and their insurance company. If the landlord does the minimum, or if they don’t feel the need to fight or be insistent on certain things, then it’s not going to happen.”

Her story is one of many that illustrate why the health of California’s property insurance market — availability of affordable policies, and insurers that pay claims promptly and fairly — matters not just to homeowners but also to renters, who make up about 44% of the state’s residents. Insurance affects the cost of rent, housing supply and the ability of communities to recover from disaster.

In November, Californians will elect the state’s next insurance commissioner, a position that will play an important role in the recovery from last year’s Los Angeles County fires and the state of the insurance market.

Barel has her own renters insurance, for which she pays $114 a year with a multi-policy discount, she said. So far, her insurer has paid her several thousand dollars since the fire: $6,000 for loss-of-use coverage, which helps for additional living expenses when a renter is displaced, and $2,100 for some of her personal belongings.

Items are boxed up in Gil Barel’s living room and bedroom in Pasadena on Aug. 2, 2026. Barel is currently not living in her apartment because of the Eaton Fire of January 2025.

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Ariana Drehsler

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CalMatters

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Items are boxed up in Gil Barel’s living room and bedroom in Pasadena on Aug. 2, 2026. Barel is currently not living in her apartment because of the Eaton Fire of January 2025.

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Ariana Drehsler

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CalMatters

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She just finished an inventory, which she will send to her insurer to claim more of her $35,000 maximum benefit for personal belongings.

“I was stuck for a long time,” Barel said. “It’s extremely overwhelming. There are a lot of personal things. These are our stories. This is our life.”

Her renters insurance did not cover the industrial hygienist testing that she ordered for her unit, which found high levels of lithium, chromium and other heavy metals, likely a byproduct of the smoke and fire residue, according to a report she shared with CalMatters. Because the blaze occurred in the wildland-urban interface, the “smoke frequently contains a broader and more toxic mixture of particulates and chemical by-products,” the report said. The industrial hygienist recommended additional testing and cleaning.

Now, after she got the city of Pasadena involved to help pressure her landlord to do more, she’s hoping she’ll soon be able to move out of the Altadena back house she has been living in since the fire. FEMA has paid for that, but the aid is set to expire in October so she’s getting worried. She has continued to pay rent for her apartment all this time, she said.

“It’s not a possibility for me to move elsewhere,” she said. “We have rent control. It was perfect for the kids when we moved in. It had a courtyard; it was near the schools; everything.”

Gil Barel at her apartment complex in Pasadena on Aug. 2, 2026.

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Ariana Drehsler

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CalMatters

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In Altadena, the area north of Pasadena that bore the brunt of the deadly Eaton Fire, 22% of households were tenants and more than one-third of the rental market was rent-controlled, according to research by the UCLA Latino Policy and Politics Institute. The researchers also noted that prior to the fire, Altadena tenant households had much lower incomes than homeowner households, and were more likely to have their short-term displacement turn into long-term housing instability.

Renters insurance

California does not require renters to have insurance, but some landlords require their tenants to have their own policies.

Emily Rogan, senior program officer for United Policyholders, a consumer advocacy group, recommends renters get insurance because of situations like Barel’s.

“Renters insurance buys you a deep breath as you think about where to go next,” Rogan said, adding that people often have a lot of difficult decisions to make after a fire or other disaster.

In addition, “in the current political climate, there’s a trend where FEMA declarations are not as frequent as they used to be,” Rogan said. A FEMA declaration unlocks federal funding after a disaster, so fewer declarations could mean less help available.

Rogan also said that because of inflation, almost everything costs more to replace. So she said it’s helpful to have renters coverage “even if you fall under the camp of ‘Oh, my stuff’s not worth much.’ ”

Insurance effects on rents, housing supply

An insurance broker, an affordable-housing operator and landlords who spoke with CalMatters painted a mixed picture about insurance availability and affordability as California continues to deal with a challenging insurance market. As the state has seen increased wildfire and other risks, such as litigation, some insurers have stopped writing policies for commercial properties.

Robert Guerrero, a broker in Madera County, said Mercury is offering new policies in several California counties, though not the ones where he has clients. There are also non-admitted insurance carriers — companies not licensed and regulated by the state, and not backed by the state if they go bankrupt — offering policies, he said. The state Insurance Department keeps a list of non-admitted, a.k.a. surplus, insurers on its website. Policyholders who agree to buy a policy from a non-admitted carrier will receive and be asked to sign a disclosure form.

“It’s still very dicey out there,” said Guerrero, whose agency offers homeowner, auto, commercial property and life insurance services.

Mike Placido, a landlord in Los Angeles County who owns four units in San Gabriel and a duplex in Alhambra, first spoke with CalMatters two years ago for an article about how insurance was affecting the rental market. Since then, he said insurance rates have increased more modestly, to the point where he feels like it’s more of a “normal” insurance market.

“It’s not causing me to raise rents as dramatically as I did before,” Placido said. “I guess the market has stabilized.”

He said he has a couple of insurance policies with State Farm, while his other policies are with non-admitted carriers, which worries him.

“There’s some aspect of safety when you’re going with a big company,” Placido said. “You don’t know if a smaller insurance company will be around (long term).”

Uwe Karbenk, co-owner of a 33-unit apartment building in San Bernardino, said he’s not very optimistic about insurance costs. They went down last year but are back at the same level as two years ago, he said. He raised rents in 2024, kept them the same last year, and now plans to raise them again this year, he said.

He said he has made upgrades worth hundreds of thousands of dollars for the building’s electrical system and a new roof, but that hasn’t lowered his insurance premiums.

Two people survey the damage of their home that was burned to the ground in an Altadena neighborhood affected by the Eaton Fire on Jan. 8, 2025

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Jules Hotz

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CalMatters

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For fire insurance, he said insurance companies now “really check the building and they will write you up for stuff they don’t like. They call it recommendations, but it’s a stipulation. You need to do it, otherwise you risk cancellation of insurance.”

Bottom line, Karbenk said: “Repairs are so much more expensive and replacement costs are so much higher. There’s no way around paying much more for insurance.”

Insurance woes are also affecting affordable housing developments.

Little Tokyo Service Center, a Los Angeles community development group that owns and operates more than 1,000 affordable housing units across different properties in the area, has seen its insurance costs skyrocket.

Between 2023 and 2024, the group’s annual insurance costs jumped from about $800,000 to $2.7 million, according to Erich Nakano, former executive director and now director of special projects of the group. The deductibles for those policies, which ranged from $10,000 to $50,000, increased to more than $100,000, he said.

That meant tapping the group’s reserves because it’s hard to raise rents on those who live in affordable housing, as well as looking for alternatives to reduce insurance costs. Last year, the group joined a so-called insurance captive — about 40 groups, including for-profit real estate firms, from around the country that have banded together to self-insure.

“it’s an existential crisis,” Nakano said. “We can’t sustain these levels of insurance premiums.”

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.