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A frustrated California landlord recently took to Reddit to vent about skyrocketing insurance costs, saying his premiums surged 340% while local rent control laws prevent him from raising rent more than 4% annually.
“Just got my insurance renewals and they increased about 340%,” the user wrote in the r/realestateinvesting subreddit. “The city where the properties are located has local rent control capping rental increases at 4% annually. I’m not a corporation or anything, just a mom and pop with a couple of units.”
The post tapped into a growing sentiment among small landlords who feel cornered by rising costs and strict regulations.
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While inflation has hit nearly every sector, insurance costs in parts of California are becoming especially difficult for property owners. Wildfire risk, stricter underwriting, and fewer insurers writing policies in high-risk areas are all contributing.
“Most of California and Florida are high-risk properties these days,” one commenter noted.
Another person chimed in with some insight: “Insurance can only go up that much if you have non-admitted insurance, which is not subject to rate regulation by the state… You’re looking for a risk-adjusted return in your business, so are they.”
The landlord later clarified that the policy is actually admitted, adding, “So that gives me another question to ask my agent tomorrow. How can they go up so much being an admitted insurance company?”
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Because the property falls under local rent control rules, the landlord can’t pass much of the cost increase onto tenants.
Some users asked whether breaking out rent components like insurance or taxes could allow landlords to bypass rent caps. “Can it be broken out as individual components?” one person asked. But others pushed back, saying tenants won’t go for that and that it’s not how rent is traditionally structured.
