Insurance Code section 13850
(a)
Hundreds of thousands of affordable homes have been built across California to meet the needs of low-income households and people experiencing homelessness. The state has invested billions of dollars in these homes through programs administered by the Department of Housing and Community Development and the California Tax Credit Allocation Committee.(b)
The United States is facing an industrywide insurance crisis, especially in the property insurance sector. According to Marsh’s Global Insurance Market Index, property insurance rates have increased for 27 consecutive quarters, continuing the longest run of increases since the inception of the index in 2012.(c)
Affordable housing entities in urban, suburban, and rural communities across California are facing limited availability of insurance coverage, significant premium and deductible cost increases, and reductions in the scope and quality of coverage. These issues are present in property, liability, and builder’s risk insurance.(d)
Affordable housing entities have limited options to manage increased insurance costs due to their mission and legal requirements to keep rents at affordable levels for low-income households. As a result, affordable housing entities are particularly vulnerable to insurance cost increases, which now present an urgent threat to the fiscal solvency and stability of affordable housing across California.(e)
While long-term structural reforms to the insurance market may be necessary, there is an immediate need for transparency and data-driven decisionmaking. Currently, there is limited publicly available information regarding how insurance market dynamics uniquely affect multifamily affordable housing. In particular, data on premium and deductible levels and trends and their relationship to claims types and amounts, resident composition, and property characteristics remain unanswered.(f)
Efforts at a nationwide level, such as the 2024 voluntary data call by the National Association of Insurance Commissioners, have primarily focused on single-family homeowners’ insurance, leaving multifamily and affordable housing insurance trends largely unexamined.(g)
The lack of reliable and comprehensive data impairs the state’s ability to respond effectively to the insurance crisis affecting its affordable housing investments. Granting the Department of Insurance the authority to request, collect, and analyze insurance-related data specific to affordable housing would enhance transparency and inform future policy and budget decisions.(h)
Collecting this data will help preserve state investments, protect low-income residents from housing instability, and enable California to develop targeted strategies to address systemic insurance challenges in the affordable housing sector.(i)
There is a compelling state interest in understanding how the insurance market’s current dynamics affect the availability and sustainability of affordable housing, and in exploring targeted solutions to reduce risks and ensure the long-term viability of publicly funded affordable housing developments.
Source:
Section 13850, https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=INS§ionNum=13850. (updated Jan. 1, 2026; accessed Dec. 22, 2025).
