Committee forwards AB 13 39 to study rising insurance costs for affordable housing providers

The Assembly Insurance Committee voted to pass AB 13 39 and send it to the Assembly Appropriations Committee. Authored by Assemblymember Eduardo Gonzalez, the bill would direct the California Department of Insurance (CDI) to conduct a study on insurance availability, premium trends and underwriting practices affecting affordable housing providers and to report back with policy and budget recommendations by December 31, 2026.

Gonzales said affordable housing providers cannot pass premium increases to tenants and that recent spikes pose an existential threat to mission‑driven organizations. “Between 2020 and 2022, the cost of insurance for affordable housing providers increased by 56% on average, and some providers experienced rate hikes as high as 500% between 2022 and 2024,” Gonzalez said.

Cosponsors and witnesses including Araceli Palafox of Enterprise Community Partners and Natalie Spivak of Housing California described surveys and property analyses showing sharp premium increases—one example cited a 450% premium increase for a Los Angeles infill property with no prior claims. Witnesses said providers have used operating reserves, deferred maintenance, cut services and reduced insurance limits in response to rising costs, placing properties and residents at risk.

The bill would require CDI to collect and analyze data on policy availability, premium trends, claims history and underwriting factors (including resident populations and income sources) and to consult with insurers, risk‑sharing pools and affordable housing entities. Testimony emphasized the need for greater transparency to craft tailored policy responses.

The committee recorded the motion as “do pass as amended” and referred AB 13 39 to the Assembly Appropriations Committee.