The exit of standard commercial property carriers from Florida and California hasn’t been quiet. It also hasn’t been complete. Both markets continue to function in 2026, but the buyer-side reality is different: most commercial property in coastal Florida, in California fire zones, and in older buildings in either state is now placed in the excess & surplus lines market. Pricing varies wildly; capacity is constrained; underwriting standards have tightened.
Here’s what’s actually available for commercial buyers in 2026.
Florida commercial property in 2026
Florida has had four years of compounding shocks: 2022’s Ian, the regional reinsurance hardening through 2023–2024, the legislative reforms aimed at curbing assignment-of-benefits and one-way attorney-fee statutes, the continued exits of admitted carriers, and the growth of Citizens Property Insurance as the de facto market of last resort.
For commercial buyers in 2026:
- Coastal commercial property (anything within several miles of the coast) is almost entirely E&S. Pricing has stabilised compared to 2023–2024 highs but remains 2–3x pre-2020 rates for hurricane-exposed risks.
- Inland Florida commercial (Orlando-area, central Florida) still has some admitted-market appetite but at meaningfully higher rates than other Southeast states.
- Habitational (apartments, condos, hotels) is the toughest class — many carriers won’t write it at all in Florida, and those that will require sprinklered, code-compliant, recent-roof properties.
- Citizens is available as a fallback but has restrictive eligibility, depopulation pressure, and rate structures that make it unattractive when private alternatives exist.
The bright spot: rates appear to have stabilised through 2025, and new specialty MGAs entered the Florida market in late 2025. Pricing increases at the 2026 renewal cycle have been more modest than in any of the preceding three years.
California commercial property in 2026
California’s story is parallel but driven by wildfire rather than hurricane. The 2024–2025 fire seasons compounded the exits of admitted carriers from wildfire-exposed zones. The state’s reforms allowing forward-looking catastrophe modelling in rate filings has slowed but not reversed the exits.
For commercial buyers in 2026:
- Wildland-urban interface (WUI) commercial is almost entirely E&S, with property in the highest-risk fire zones effectively unwriteable in the admitted market.
- Urban California commercial (LA Basin, Bay Area cores) remains writeable but at significant rate increases over 2020 levels.
- The FAIR Plan is available as a last resort but with property-type and limit restrictions that make it impractical for commercial use.
- Older buildings — pre-1980 construction in earthquake zones — face the additional issue of seismic underwriting overlaid on fire underwriting.
What’s actually buyable in 2026
Three categories of carrier are writing CAT-zone commercial property:
1. Dedicated specialty MGAs
A handful of MGAs have built dedicated capacity for hard-to-place commercial property in Florida and California. They’re not cheap, but they’re transactable. Submission quality matters: underwriters expect detailed COPE (construction, occupancy, protection, exposure) data, current valuations, and capex documentation for any updates.
2. London and Bermuda capacity
E&S layers in the towers for larger CAT-zone risks frequently include London and Bermuda capacity, especially above $25M. Pricing here is rationalising in 2026 after several harder years.
3. Parametric layers
For some CAT exposures, parametric cover — where payout is triggered by a measurable event (wind speed, fire-perimeter distance, ground shaking magnitude) rather than by traditional claim adjustment — fills the gap above traditional limits or under conditions that traditional cover declines. Adoption is growing.
What buyers should do at the next renewal
Three moves for any commercial buyer with material CAT-zone exposure:
- Run the submission early. 90 days before renewal isn’t early — 120–150 is appropriate. CAT-zone underwriting takes longer than admitted property; rushing it gets you worse pricing.
- Document the loss-prevention investments. Roof replacement, sprinkler upgrades, fire-resistant landscaping, hurricane shutters. Anything that materially reduces loss probability has to be in the submission.
- Consider a higher deductible with parametric backstop. A larger primary deductible reduces base premium; a parametric layer above can fill the gap for catastrophic events. The combined cost is often lower than a low-deductible traditional structure.
The CAT-zone market is functioning. It’s expensive, demanding and specialty-driven — but it’s not closed. Buyers who treat it as a specialty placement get materially better outcomes than buyers who treat it as a standard renewal.
