Palomar Specialty and catastrophe insurance
Palomar Specialty Insurance was founded in 2005 with a specific thesis: the insurance market systematically underserves property owners with catastrophe-exposed risks because most insurers treat catastrophe as an anomaly rather than a core business. Standard carriers — those writing auto, homeowners, commercial lines — typically have limited appetite for earthquake, flood, and wind because these perils can produce correlated losses across their entire portfolio simultaneously. The result is either blanket declinations or very conservative pricing that doesn't reflect the actual risk profile of individual properties.
Palomar went public on the NASDAQ in 2019 as PLMR, bringing public market transparency to a specialty insurer that had quietly built a strong catastrophe book. Their IPO prospectus and subsequent investor disclosures provide unusual clarity into the size and composition of their earthquake book, their reinsurance structure, and their catastrophe model assumptions — information that is valuable context for policyholders as well as investors. California residential earthquake is one of Palomar's largest product lines, and their earthquake underwriters have accumulated meaningful experience pricing the full range of California residential construction.
The AM Best A- (Excellent) rating reflects Palomar's financial strength and their disciplined approach to catastrophe risk management. AM Best A- is a strong rating that indicates Palomar has adequate capital to pay claims following a significant earthquake event. Palomar's reinsurance program is central to their business model — they purchase significant reinsurance protection that limits their net retained loss in any single catastrophe, which is part of how a relatively young insurer maintains financial strength ratings even with significant catastrophe exposure.
As a publicly traded company, Palomar's earthquake underwriting strategy, pricing, and loss experience are disclosed in SEC filings — a level of transparency that private carriers and mutual companies don't provide. This transparency is useful: it provides evidence that Palomar has paid earthquake claims, maintained financial strength through prior events, and continued investing in their California earthquake book as a strategic priority rather than a legacy position they'd prefer to exit.
Palomar coverage types
Palomar's wide catastrophe appetite extends to property categories that standard residential programs often decline. Their coverage types reflect this broader mandate.
Primary Residential
Owner-occupied single-family homes. Palomar's core California earthquake product across standard and non-standard construction. Their catastrophe model approach enables them to price risks that simpler programs decline.
Secondary / Vacation
Secondary residences and vacation homes. An area where admitted markets often have limited appetite. Palomar's specialty focus means they approach secondary home earthquake the same way they approach primary — as a priced risk, not an automatic exception.
Rental Property
Investment residential properties — single-family rentals, small multifamily. Landlord earthquake coverage where many standard markets decline. Palomar's earthquake-specific underwriting extends to investment property as well as owner-occupied.
Manufactured Homes
Manufactured and mobilehome earthquake coverage. A specialty segment that most carriers don't write. Palomar's broad catastrophe appetite includes manufactured housing, subject to the usual underwriting criteria.
Why Palomar's appetite is wider
The core reason Palomar has wider appetite than standard programs is that they use probabilistic catastrophe models to price risk rather than applying blanket rules based on year built, construction type, or ZIP code. Most standard insurance programs use simplified rating algorithms: homes older than X years get a surcharge, certain foundation types are declined, certain construction classes aren't eligible. These rules are blunt instruments that capture average behavior poorly and create gaps in market access for property owners whose risks are actually well-priced if modeled correctly.
Palomar's catastrophe modeling approach asks a more specific question: given this home's construction type, foundation, year built, retrofit status, proximity to fault systems, and soil conditions, what is the expected loss distribution? This probabilistic approach can distinguish between a pre-1940 home in Berkeley that has been properly retrofitted and documented — a meaningfully lower risk than average for its age class — and an identical-vintage home that has had no seismic work done. Standard programs would treat both the same; Palomar's modeling approach can credit the retrofit work with better pricing or eligibility.
This modeling sophistication opens appetite for property categories that standard programs struggle with. Hillside properties — common in Los Angeles, the Bay Area, and other California markets — have complex site-specific risk profiles that depend on slope, soil type, foundation type, and proximity to known landslide zones. Palomar's catastrophe team can evaluate these properties rather than declining them categorically. Cripple wall foundations, the most common source of serious earthquake damage in pre-1960 California homes, are within Palomar's appetite when documentation supports appropriate risk assessment. Southern California's high-seismicity counties, the Bay Area near the Hayward Fault, and other areas where standard programs price most conservatively are all within Palomar's normal operating territory.
Deductible options and coverage structure for Palomar policies are comparable to other private market carriers — typically percentage deductibles from 5% to 20% of Coverage A, with personal property, loss of use, and building code upgrade available. For rental properties and secondary homes, coverage is structured to reflect the appropriate loss of income or temporary housing scenario for the property type.
When Palomar fits your property
Palomar is often our first call when a property has characteristics that standard programs decline or price punitively: older construction, hillside location, cripple wall foundation without retrofit documentation, rental property, secondary residence, or manufactured home. Their catastrophe focus means the underwriter's first question is "how do we price this risk?" rather than "do we have an appetite for this risk?" That mindset produces options for properties that standard programs simply won't write, and competitive pricing for properties they do write.
For brokers, Palomar's institutional focus on earthquake means fast, knowledgeable underwriting decisions. When you submit a complex earthquake file to a general lines carrier that writes earthquake as a secondary product, you're competing for attention with auto claims, commercial liability questions, and every other product line the carrier manages. When you submit to Palomar, you're submitting to people who think about earthquake risk every day. This expertise produces better decisions faster — which matters when a property owner is waiting on coverage confirmation to close a real estate transaction.
Palomar's public company transparency is also valuable context for our clients. We can point to SEC filings, investor presentations, and loss history disclosures that demonstrate Palomar's earthquake claims-paying track record, reinsurance structure, and strategic commitment to the California earthquake market. For clients who want to understand their carrier beyond a single AM Best rating, Palomar's public disclosures provide more information than most specialty carriers make available.
Frequently asked about Palomar Specialty
Does Palomar write older homes?
Yes. Palomar has meaningful appetite for pre-1980 and even pre-1940 construction, particularly when retrofit documentation is available. Their catastrophe modeling approach means they assess each property's specific risk profile rather than applying blanket age-based rules. A FEMA P-50 compliant cripple wall retrofit with licensed contractor documentation can substantially improve eligibility and pricing for older homes. Even without complete retrofit documentation, Palomar's team can often find a pricing structure that works for older construction where standard programs automatically decline. This is one of the primary reasons we include Palomar in market reviews for older California homes.
Is Palomar admitted in California?
Palomar has both admitted and non-admitted programs depending on the specific product. Some California earthquake programs are admitted (CDI-regulated rates and forms, CIGA participation), while others operate on surplus lines paper. Your broker will clarify the admitted or non-admitted status for your specific quote. For most residential earthquake risks, Palomar's surplus lines paper provides the full coverage features you need — the practical difference from admitted paper is primarily the consumer protections of CDI regulation and CIGA, which matter most if admitted paper is a lender or HOA requirement.
How does Palomar's catastrophe focus affect claims?
It means their claims infrastructure is designed around large-scale events. Palomar has catastrophe response teams and established relationships with California contractors for earthquake damage. As a specialty catastrophe insurer, Palomar has thought through major event claims handling — how to triage a large volume of simultaneous claims, how to prioritize emergency stabilization, how to engage local contractors quickly — in a way that general-lines carriers, for whom earthquake claims are a rare exception to their normal workflow, may not have. This preparation matters most after a significant regional earthquake when many carriers are handling earthquake claims for the first time.
Want Palomar Specialty in your comparison?
If your property is older construction, hillside, rental, or has been declined elsewhere, Palomar's catastrophe-focused underwriting often finds a path forward. Start your application and we'll include Palomar in your market review.