Community Association Insurance in California

California at a glance

Governing act

Davis-Stirling Common Interest Development Act, Cal. Civ. Code 4000+

Requires annual insurance disclosure to owners.

Inspection mandate

SB 326 exterior elevated element inspections

Applies to condo buildings with 3+ multifamily units and wood-frame balconies/walkways.

Wildfire market condition

Reduced private capacity in WUI areas; FAIR Plan use increasing

Boards should budget extra renewal lead time in higher-risk zones.

Earthquake coverage

Not included in standard property forms; separate purchase decision

Disclosure of whether it's carried is required under Davis-Stirling.

Davis-Stirling Act insurance disclosure requirements

California Civil Code provisions within the Davis-Stirling Act (generally in the 4000+ series) require associations to provide owners with an annual disclosure summarizing the association's insurance policies, including property, general liability, and earthquake and flood coverage if carried, along with the applicable deductibles and whether the policy would be adequate to rebuild in the event of a total loss. Boards should treat this disclosure obligation as more than a compliance checkbox, since it is often the document unit owners and their lenders rely on to evaluate whether individual HO-6 coverage is adequately sized to fill the gap between the master policy and full replacement.

SB 326 balcony and exterior elevated element inspections

SB 326 requires condominium associations with buildings containing three or more multifamily units to have licensed inspectors evaluate exterior elevated elements — balconies, decks, walkways, and similar load-bearing structures with a wood or wood-based frame — on a periodic cycle, and to make repairs when an inspection finds a component poses an immediate threat to safety. Associations that skip or delay this inspection face not only code-enforcement exposure but a harder path to renewing property coverage, since carriers increasingly ask for elevated-element inspection records on older wood-frame condominium buildings, particularly in coastal and inland California markets with substantial 1970s-1990s-era condo stock.

Wildfire exposure and insurance availability

California HOAs in wildland-urban interface areas — foothill communities, hillside developments, and much of inland Southern California — face wildfire exposure that has materially reduced private-market property insurance availability in recent years, pushing some associations toward the California FAIR Plan or surplus lines carriers for all or part of their coverage. Boards in higher wildfire-risk zones should budget extra lead time for renewal marketing, document defensible-space and vegetation-management practices, and discuss with their agent whether a FAIR Plan policy needs to be supplemented with a difference-in-conditions policy to cover perils the FAIR Plan excludes.

Earthquake coverage decisions for California associations

Standard commercial property policies exclude earthquake damage, and California associations must affirmatively decide whether to purchase separate earthquake coverage, weighing the statewide seismic risk against the coverage's typically high deductibles and limited availability for older wood-frame or soft-story buildings. Because Davis-Stirling's insurance disclosure requires associations to tell owners whether earthquake coverage is carried, boards that choose to go without it should document that decision carefully and make sure owners understand what a major seismic event would mean for both the master policy and any HO-6 gap coverage.

Dense condominium stock and fidelity/D&O considerations

California's dense urban condominium markets in Los Angeles, San Francisco, and San Diego include a significant number of older high-rise and mid-rise buildings where embezzlement by a managing agent or treasurer remains a leading source of community association crime claims, and boards should size fidelity coverage to actual reserve and operating balances rather than assume a management contract's minimum is adequate. D&O coverage is equally important given California's active landscape of association governance litigation, including disputes over rental restrictions, short-term rental bans, and architectural review, and boards should confirm current disclosure and inspection obligations with association counsel as Davis-Stirling and SB 326 requirements continue to be refined.

Who we write this for in California

Community association FAQs for California