Excess and Surplus Lines Insurance in California: What Homeowners Need to Know
If you’ve been shopping for homeowners insurance in California, you may have come across a term you’re not familiar with: Excess and Surplus Lines Insurance—also known as E&S insurance. While it’s traditionally been used for high-risk or hard-to-insure properties, a growing number of California homeowners with standard homes are now ending up with E&S policies.
Why? It’s not because their homes necessarily carry a high risk, but because California’s admitted insurance market is volatile with the exit of many traditional insurers. In this blog, we’ll break down what E&S insurance is, why it’s becoming more common in California, and what you need to know as a homeowner navigating today’s evolving insurance market.
What is Excess and Surplus Lines (E&S) Insurance?
Excess and Surplus Lines Insurance is a category of property insurance for homes or risks that admitted insurance companies decline to cover. E&S carriers are considered non-admitted insurers, meaning they operate under specific regulations different from admitted insurers.
Historically, E&S was used to insure unique homes, high-risk properties, or special circumstances—like beachfront mansions, historic homes, or homes in wildfire zones. But now, many homeowners with relatively standard homes are turning to E&S coverage simply because fewer admitted carriers are writing policies in California.
Why Are So Many California Homeowners Being Moved to E&S Insurance?
Over the past few years, California’s home insurance market has been under stress. A combination of rising wildfire risks, climate-related disasters, and insurance regulation challenges has made it difficult for traditional insurance companies (admitted carriers) to offer new homeowners policies.
That’s left thousands of homeowners across the state—many of them with no unusual risks—with no choice but to secure a non-admitted E&S policy.
Common reasons include:
- Limited availability from admitted insurers in certain ZIP codes
- Insurance non-renewals due to wildfire exposure or rising reinsurance costs
- Restricted new business in high-risk or even moderate-risk regions
So even if your home is “standard,” you may still need an E&S policy due to California’s current insurance market conditions.
What’s the Difference Between Admitted and Non-Admitted (E&S) Insurance?
Understanding the difference between admitted vs. non-admitted insurance is key when choosing a policy.
A common misconception is that E&S insurance is “unregulated.” While it’s true that E&S carriers are not subject to the same filing and pricing restrictions, they are still regulated through surplus lines laws and must meet strict financial solvency requirements.
Why Choose an E&S Policy in California?
Given the lack of admitted insurance options, E&S coverage may be your only path to insuring your home—and that’s okay. Today’s E&S policies are often comparable to admitted ones in terms of coverage, especially when arranged by a knowledgeable insurance broker.
Here are some key benefits of E&S homeowners insurance:
- ✅ Access to insurance when admitted carriers are unavailable
- ✅ Customizable coverage for properties with specific needs or higher value
- ✅ Faster policy creation without the delays of state approval requirements
Common Concerns About E&S Home Insurance
If you’re new to the concept of E&S insurance, you might have concerns like:
- “Is E&S insurance safe?”
- Yes. While it’s not backed by a state guaranty fund, reputable E&S carriers must meet financial stability standards and are regulated under state surplus lines laws.
- “What if the E&S insurer goes bankrupt?”
- That’s why it’s important to work with brokers who only partner with financially secure carriers, typically those with strong AM Best ratings.
- “Will my policy be different from a standard one?”
- E&S policies can be very similar to admitted policies in coverage, but they also offer greater flexibility—which can be helpful for homes with unique features or values.
Is E&S Insurance Only for California?
While California is currently facing the most severe challenges in the homeowners insurance market, other states are also beginning to experience similar limitations. For example, Texas is seeing increased demand for E&S options, and future insurance offerings in that state may also be issued on an E&S basis.
That said, this blog is most relevant to California homeowners navigating the shift toward non-admitted coverage.
Need Help Navigating E&S Insurance in California?
Understanding your options can feel overwhelming—especially when you’re trying to protect your home and family. That’s why it’s important to stay informed and work with experts who know the ins and outs of California’s home insurance market. That’s where Bamboo comes in – we’re in California for good with both admitted and non-admitted capacity. Click here to start your California homeowners insurance quote now.