Research study

Insuring an ADU: what changes when you add a second unit

Name: Insuring a California ADU: the statutory disclosure architecture, the FAIR Plan definition, and a documented account of what is not publicly retrievable
Creator: HyreADU Research Desk
Published: 2026-09-05
License: https://creativecommons.org/licenses/by/4.0/

The statutory architecture is retrievable and useful. The California market data is not, and this page says so instead of substituting broker commentary for evidence.

Updated September 2026 · Data as of Insurance Code §§ 675.1, 10091, 10101 and 10102 and Government Code §§ 66314, 66315, 66317 and 66342 retrieved from leginfo.legislature.ca.gov 2026-09-05; 44 CFR §§ 59.1 and 60.3 retrieved from the Legal Information Institute 2026-09-05; CAL FIRE Damage Inspection data queried directly 2026-09-05

Written by HyreADU Research Desk Primary-source research and data analysis

Audited by HyreADU Research Desk Statutory citation and retrieval-date audit

5 coverage items California insurers must disclose — four levels plus the code-upgrade rider Insurance Code § 10102, retrieved 2026-09-05. The statute also requires that the agent or insurer “indicate on the disclosure form which coverages the applicant or insured has selected or purchased.”

1 year post-wildfire moratorium on cancellation or non-renewal Insurance Code § 675.1: no cancellation or refusal to renew “for a property located in any ZIP Code within or adjacent to the fire perimeter, for one year after the declaration of a state of emergency … based solely on the fact that the insured structure is located in an area in which a wildfire has occurred.”

0 California market figures published on this page — the sources were unreachable cfpnet.com returned HTTP 503 and insurance.ca.gov consumer guides returned HTTP 404 at every path attempted on 2026-09-05. No rate, limit, percentage or availability statistic is published.

The finding

Adding an ADU changes three things at once: what is on the property, who lives there, and what it would cost to put back. The third is the one people underestimate, and it has a specific name in California law.

Insurance Code section 10102 requires insurers to disclose five things, and the fifth is the one that matters most for an ADU. Four are levels of dwelling coverage the statute ranks — Actual Cash Value, Replacement Cost, Extended Replacement Cost and Guaranteed Replacement Cost.

The fifth is Building Code Upgrade coverage, also called Ordinance and Law coverage, which addresses “additional costs to repair or replace a dwelling to comply with the building codes and zoning laws in effect at the time of loss or rebuilding.” That fifth item is disproportionately important for an ADU, because a rebuilt unit is built to current code, not to the code it was built under. Current code may mean the 2025 Title 24, the provisions that follow a fire hazard severity zone designation, or the flood-zone elevation requirement at 44 CFR 60.3(c)(2).

Each is a code-upgrade cost. The occupancy change is the other half. A rented ADU is a second household on the property, and state law lets the owner live elsewhere.

Whether a given homeowners policy contemplates that is a policy-form question, and it must be put to the insurer in writing before the unit is let.

Now the part we could not do. cfpnet.com returned HTTP 503 and the Department of Insurance consumer guides returned HTTP 404 at every path attempted on this date.

This edition therefore publishes no rate, premium, availability statistic, FAIR Plan limit or policy-form convention — only the statutory frame, sourced, and an account of the gap. This is not insurance advice.

Read this first

Nothing here is insurance advice, and HyreADU does not sell, place or advise on insurance
We describe statutory architecture. We do not tell you what cover to buy, at what limit, from whom, or at what price.
Those are decisions for you with a licensed broker or agent and, on a disputed claim, a lawyer or a public adjuster.
Anyone offering you a coverage recommendation from a web page is not in a position to give one.
We publish no rate, no premium, no limit and no availability figure for California
Because we could not retrieve any. The California FAIR Plan’s site returned HTTP 503 with a one-hour retry directive, and the Department of Insurance’s residential consumer guides returned HTTP 404 at every path we tried, including the guide index.
This is the largest gap on the page and it is the reason the page is short.
The California residential market has moved fast, and undated figures are worthless here
Whatever you read about availability, non-renewals, the FAIR Plan or rate filings, check its date before you use it.
Insurance Code section 10091 — the FAIR Plan’s definitional section — was itself amended by SB 525 (Stats. 2025, Ch. 476) with effect from 1 January 2026, which is an indication of how live this area is. We date everything on this page for that reason.
Policy forms are contracts, and this page has read none of them
Whether your particular policy covers a detached ADU, at what limit, and on what terms if it is let, is answered by the wording of your policy and its endorsements.
We did not retrieve any policy form and we publish no convention about how ADUs are typically treated. Get the answer from your insurer in writing before the unit is occupied.

Three things change at once

An ADU is not a shed with a kitchen. It changes the risk in three distinct ways, and they get underwritten separately even though they arrive together.

The structure. There is now a second building, or a second dwelling inside the first, with its own kitchen, its own bathroom, its own electrical and mechanical systems and its own contents. Whether your existing policy contemplates it, and at what limit, is a question about your specific policy wording.

The occupancy. A tenant is a second household. Government Code section 66314 provides that an ADU “may be rented separate from the primary residence, but shall not be sold or otherwise conveyed separate from the primary residence”, and section 66315 bars a local agency from imposing an owner-occupancy requirement on an ADU — the prohibition no longer sunsets, as our owner-occupancy study sets out.

So the lawful configurations include one where nobody who owns the property lives on it. That is a materially different occupancy from the one most homeowners policies were written around.

The rebuild cost. This is the change people notice last and regret most. After a loss, a building is rebuilt to the code in force then, not the code it was built under.

In California that can mean a newer Title 24 edition, materials and detailing provisions attaching to a fire hazard severity zone designation, or — inside a Special Flood Hazard Area — an elevation requirement triggered because the repair is a substantial improvement or the damage is substantial damage.

Each of those is an increase in the cost to put the building back, and each is what Building Code Upgrade coverage exists to address.

HyreADU analysis: the third change is where an ADU is genuinely different from a loft conversion or a new bathroom.

It adds a whole additional building to the amount that would have to be rebuilt, and it does so on a property whose code environment may have tightened since the main house was built.

If you take one thing from this page, take the question in the next section and ask it in writing.

The five things California requires an insurer to disclose

From Insurance Code section 10102, quoted as retrieved. Four levels of dwelling coverage plus the code-upgrade rider. The statute also requires the agent or insurer to “indicate on the disclosure form which coverages the applicant or insured has selected or purchased” — so you are entitled to a document that says which one you have.

The four disclosure categories in the statutory order, most limited to least limited, with the Building Code Upgrade rider shown across the top because it applies alongside whichever level is selected. Bar heights are ordinal and carry no monetary meaning — the statute ranks these categories and does not price them. Chart: HyreADU Research Desk, from Insurance Code § 10102 as retrieved 2026-09-05. Every label and description is quoted from the statute; no premium, limit or price is implied.

Disclosure category	What the statute says it is	Why it matters specifically for an ADU
Actual Cash Value coverage	“[T]he most limited level of coverage”, paying repair or replacement costs minus deductions for depreciation.	On a second structure, depreciation applies to the whole of it. An older converted garage is exactly the kind of building where the gap between depreciated value and rebuild cost is widest.
Replacement Cost coverage	Repair or replacement costs “without a deduction for physical depreciation” up to policy limits.	Removes the depreciation deduction but is still capped by the limit — and the limit is a number someone had to set with the ADU in mind.
Extended Replacement Cost coverage	“[A]dditional coverage above the dwelling limits up to a stated percentage or specific dollar amount.”	The buffer against under-insurance. Relevant where an ADU was added after the policy limit was last reviewed.
Guaranteed Replacement Cost coverage	“[T]he full cost to repair or replace the damaged or destroyed dwelling for a covered peril regardless of the dwelling limits.”	The broadest of the four as the statute describes it. Availability is a market question this page does not answer.
Building Code Upgrade coverage (Ordinance and Law)	“[A]dditional costs to repair or replace a dwelling to comply with the building codes and zoning laws in effect at the time of loss or rebuilding.”	The one to ask about first. A rebuilt ADU meets current code: possibly a newer Title 24 edition, possibly fire hazard severity zone materials and detailing, possibly a flood elevation requirement if the repair is a substantial improvement. Those are code-upgrade costs by definition.

Quoted from California Insurance Code section 10102 as retrieved from the Legislative Counsel’s codes service on 2026-09-05.

Section 10101 separately requires that a named insured be given “a copy of the California Residential Property Insurance Disclosure pursuant to Section 10102 and a copy of the California Residential Property Insurance Bill of Rights described in Section 10103.5.” The right-hand column is HyreADU analysis.

What this table is not. It is not a statement of what your policy contains, and it is not a recommendation.

It is the list of things a California insurer is required to put in front of you, so that you can ask which of them you have.

The most useful single action arising from this page is to find that disclosure form for your current policy and read the line the statute requires the insurer to complete.

The questions to put in writing — and what we could source for each

An honest scorecard, in the same form as our other studies. Some of these have retrievable statutory answers. Most do not, and are answered only by your insurer against your policy.

Question	What we could source	Who actually answers it
Is the ADU covered by my existing policy, and at what limit?	Nothing. We retrieved no policy form and publish no convention about how ADUs are treated.	Your insurer, in writing, against your policy and its endorsements.
Does letting the ADU change the policy I need?	Only the legal background. Gov. Code § 66314: an ADU “may be rented separate from the primary residence”. Gov. Code § 66315 bars a local owner-occupancy requirement, so a pure-rental configuration is lawful.	Your insurer. Disclose the intended use before the unit is occupied, not after.
Do I have Building Code Upgrade coverage, and how much?	The statutory description. Ins. Code § 10102 requires it to be disclosed and defines it as covering “additional costs to repair or replace a dwelling to comply with the building codes and zoning laws in effect at the time of loss or rebuilding.”	Your insurer, via the disclosure form section 10102 requires them to complete.
What happens to my tenant’s belongings?	Nothing sourced.	Your insurer, and the tenant’s own renter’s policy. This is ordinarily addressed in the tenancy agreement as well.
Am I covered for flood?	The federal frame. Flood is administered through the National Flood Insurance Program and its criteria at 44 CFR Part 60; a Special Flood Hazard Area is land “subject to a 1 percent or greater chance of flooding in any given year”, and the elevation of the lowest floor relative to the base flood elevation is central to the program’s requirements.	A flood insurer or your agent. See our flood zone study for the construction side.
What if I cannot get cover in the admitted market?	The FAIR Plan’s statutory basis. Ins. Code § 10091 establishes the California FAIR Plan Association as “a joint reinsurance association … formed by insurers” to help persons obtain basic property insurance, defines basic property insurance as coverage “against direct loss to real or tangible personal property” including fire, extended coverage perils, vandalism and malicious mischief, and provides that it “includes insurance for manufactured homes and mobilehomes under the same terms and conditions as basic property insurance sold for other residential dwellings”. No limits, terms or availability are published here.	The FAIR Plan and a licensed broker. Its own program documents were unreachable on this date.
Can I be non-renewed because a wildfire happened nearby?	A clear statutory protection, time-limited. Ins. Code § 675.1: no cancellation or refusal to renew “for a property located in any ZIP Code within or adjacent to the fire perimeter, for one year after the declaration of a state of emergency … based solely on the fact that the insured structure is located in an area in which a wildfire has occurred.” CAL FIRE determines the perimeter in consultation with the Office of Emergency Services; the Commissioner issues a bulletin identifying affected ZIP Codes.	The Department of Insurance bulletin identifies the ZIP Codes; your insurer applies it.
Does an ADU affect my ability to sell the unit separately?	Yes, and the statute is explicit. Gov. Code § 66314: an ADU “shall not be sold or otherwise conveyed separate from the primary residence”, subject to the narrow nonprofit route and the local condominium ordinance mechanism at § 66342.	A lawyer. Separate conveyance changes the insurance question entirely and is outside this page.

Statutory provisions retrieved individually from the Legislative Counsel’s codes service and from the Legal Information Institute on 2026-09-05. The middle column records what we could and could not source; it is not a summary of any policy.

Why the middle column is mostly empty. Insurance is a contract, and contracts are not public documents.

The parts of this subject that are legislated are retrievable and are set out here; the parts that are underwritten are not, and a research page that filled them in from broker commentary would be presenting opinion as evidence. Ask your insurer, get it in writing, and date it.

Why code-upgrade coverage is the ADU question

Code-upgrade coverage connects the insurance frame to the other studies in this batch, because the connection is the whole point.

A rebuilt building meets today’s code, and today’s code has moved

The California Building Standards Commission records that the 2025 Title 24 was published on 1 July 2025 with an effective date of 1 January 2026, and that the 2022 edition took effect on 1 January 2023.

A building put up under an earlier edition and rebuilt after a loss is rebuilt under whichever edition governs then.

That is the mechanism Building Code Upgrade coverage addresses in terms: “additional costs to repair or replace a dwelling to comply with the building codes and zoning laws in effect at the time of loss or rebuilding.”

In a fire hazard severity zone the upgrade is materials and detailing

Government Code section 51178 requires the State Fire Marshal to identify moderate, high and very high fire hazard severity zones; section 51189 directs recommended standards addressing “fire resistant building materials, and standards for reducing fire risks on structure projections, including … porches, decks, balconies and eaves, and structure openings, including … attic, foundation, and eave vents, doors, and windows.”

Zone designations are revised. A rebuild on a parcel newly inside a zone is a rebuild to those provisions. Our fire code study also publishes what CAL FIRE’s own damage records show about those features — and is explicit that the association is not causal.

In a flood hazard area the upgrade is elevation, and the trigger is a percentage

44 CFR 59.1 defines substantial damage as damage “whereby the cost of restoring the structure to its before damaged condition would equal or exceed 50 percent of the market value of the structure before the damage occurred”, and substantial improvement on the same 50 per cent basis. 44 CFR 60.3(c)(2) then requires that new construction and substantial improvements of residential structures in the mapped zones have “the lowest floor (including basement) elevated to or above the base flood level”.

HyreADU analysis: so in a Special Flood Hazard Area a serious loss can convert a repair into an elevation project by operation of a percentage test.

That is a code-upgrade cost of a very large kind, and it is the clearest illustration of why this coverage is worth asking about specifically. Our flood study works the mechanism through.

And the loss itself is not evenly distributed in time

From our query of CAL FIRE’s Damage Inspection database, structures recorded “Destroyed (>50%)” by incident start year run 22,701 in 2018, 16,512 in 2025 and 10,922 in 2017, against 53 in 2023. Of the 2025 figure, 16,278 were in Los Angeles County.

That distribution is the reason rebuild costs, contractor availability and code environments all move at once after a catastrophe, and it is a reason to have the code-upgrade conversation in a quiet year rather than a loud one.

Our wildfire rebuild study sets out the data and its limits, including the finding that the state’s damage record has no category for an ADU at all.

What to actually do

Six steps, all administrative, none of them advice about what to buy.

1
Tell your insurer before you build, not after
Disclosure before the fact is the whole game in insurance. Describe the ADU, its construction, its size, its intended use and its expected completion. Ask what the policy will and will not do once it exists, and get the answer in writing.
2
Find the disclosure form section 10102 requires and read the completed line
The statute requires the agent or insurer to “indicate on the disclosure form which coverages the applicant or insured has selected or purchased.” That single line tells you which of the four dwelling coverage levels you hold and whether you have Building Code Upgrade coverage. If you cannot find the form, ask for a copy.
3
Ask about Building Code Upgrade coverage explicitly, by name
And ask what it is limited to. This is the coverage most directly exposed to the code environment your parcel sits in — a Title 24 edition change, a fire hazard severity zone designation, a flood elevation requirement. Ask the question with your parcel’s hazard designations in hand.
4
Tell your insurer the unit will be let, and when
Letting is a change in occupancy. California law permits it — an ADU “may be rented separate from the primary residence” under Government Code section 66314 — but whether your policy contemplates a tenanted second unit is a policy question, and it is far better answered before a tenant moves in.
5
Deal with flood separately, and early
Flood is not part of a standard residential property policy and is administered through a different program with its own criteria. If the parcel is in or near a Special Flood Hazard Area, get the elevation certificate that our flood study describes and take it to the conversation.
6
Require your tenant to carry renter’s insurance, and put it in the tenancy agreement
Your policy is about your building. Their belongings are theirs. This is ordinary practice, it is a tenancy-agreement matter, and it is cheap for the tenant. It is not, and this page does not offer, legal advice on drafting a tenancy.

The terms, quoted

Basic property insurance: Defined at Insurance Code section 10091 as coverage “against direct loss to real or tangible personal property” in designated areas, including fire, extended coverage perils, vandalism and malicious mischief. It “includes insurance for manufactured homes and mobilehomes under the same terms and conditions as basic property insurance sold for other residential dwellings”, and “does not include insurance on automobile risks, commercial agricultural commodities or livestock”. Amended by Stats. 2025, Ch. 476, Sec. 1 (SB 525), effective 1 January 2026.
The FAIR Plan Association: Insurance Code section 10091 defines the “Association” as the California FAIR Plan Association, “a joint reinsurance association … formed by insurers” to help persons obtain basic property insurance, with insurers “licensed to write and engaged in writing basic property insurance within this state” participating in its formation and operation to assist in “equitable apportionment among insurers of basic property insurance.” We publish none of its program terms or limits, because its site was unreachable on this date.
Building Code Upgrade coverage: Also called Ordinance and Law coverage. Insurance Code section 10102 requires its disclosure and describes it as addressing “additional costs to repair or replace a dwelling to comply with the building codes and zoning laws in effect at the time of loss or rebuilding.” For an ADU this is the coverage most exposed to California’s changing code environment.
Substantial damage: A federal floodplain term, not an insurance term, but one that can drive an insurance outcome. 44 CFR 59.1: damage “whereby the cost of restoring the structure to its before damaged condition would equal or exceed 50 percent of the market value of the structure before the damage occurred.” Crossing it in a Special Flood Hazard Area engages the elevation requirement on a repair.
Post-wildfire moratorium: Insurance Code section 675.1: an insurer “shall not cancel or refuse to renew a policy of residential property insurance for a property located in any ZIP Code within or adjacent to the fire perimeter, for one year after the declaration of a state of emergency … based solely on the fact that the insured structure is located in an area in which a wildfire has occurred.” CAL FIRE determines the perimeter in consultation with the Office of Emergency Services; the Insurance Commissioner issues a bulletin identifying affected ZIP Codes. Amended by Stats. 2018, Ch. 618, Sec. 1.5 (SB 894), effective 1 January 2019.

What we could not verify

Everything about the California FAIR Plan beyond its statutory definition. cfpnet.com returned HTTP 503 with a one-hour retry directive on every attempt, by two retrieval methods.

We therefore publish no coverage limit, no program term, no eligibility rule, no policy count and no premium.

What is on this page about the FAIR Plan comes from Insurance Code section 10091 and nowhere else.

The Department of Insurance’s residential consumer guides. The guide index page listed nine residential guides by title — including “Residential Insurance: Homeowners and Renters”, “Building Communities Safer from Wildfires”, “Don’t Get Scammed After a Disaster” and a residential property claims guide — but every attempt to retrieve a guide document returned HTTP 404, and the index itself carried no publication dates. So we cite no guidance from them and quote nothing.

Any unit-type data. The page contract asks us to “mark for confirmation what is genuinely retrievable at the unit-type level before this ships.” Our answer is: nothing was. We found no dataset distinguishing insurance outcomes for an accessory dwelling unit from those for the primary dwelling.

That is consistent with the finding in our wildfire study that the state’s own post-fire damage record has no ADU category either.

If a data source at the ADU level exists, we did not find it on this date.

Rate filings and market conditions. Not retrieved and not characterized. The Department of Insurance maintains a public route to rate filings; we did not use it for this edition, and this page contains no statement about the direction of rates, availability or non-renewals in California.

Any policy form. We read none, and we publish no convention about how homeowners policies treat detached second dwellings. Anyone stating such a convention should be asked which form and which edition.

Questions

Do I need different insurance if I build an ADU?

Very possibly, and the only reliable answer comes from your insurer against your policy. What changes is threefold: there is a second structure with its own systems and contents, there may be a second household on the property, and the cost to rebuild the property has increased. Tell the insurer before you build and again before the unit is let, and get the answers in writing. This is not insurance advice and we do not tell you what to buy.

What is the single most important coverage to ask about for an ADU?

Building Code Upgrade coverage, also called Ordinance and Law coverage. Insurance Code section 10102 requires it to be disclosed and describes it as covering “additional costs to repair or replace a dwelling to comply with the building codes and zoning laws in effect at the time of loss or rebuilding.” It matters disproportionately for an ADU in California because a rebuilt unit meets current code — potentially a newer Title 24 edition, potentially fire hazard severity zone materials and detailing, potentially a flood elevation requirement if the damage crosses the 50 per cent substantial damage threshold.

Do I need landlord insurance for a rented ADU?

That is a policy-form question we cannot answer from public sources, and we publish no convention about it. What we can tell you is that letting the unit is lawful — Government Code section 66314 provides that an ADU “may be rented separate from the primary residence” — and that section 66315 bars a local owner-occupancy requirement, so a configuration where the owner lives elsewhere is also lawful. Whether your particular homeowners policy contemplates a tenanted second dwelling is answered by the wording and by your insurer, in writing, before the tenancy starts.

What are the four levels of dwelling coverage in California?

Insurance Code section 10102 requires insurers to disclose them, and describes them as: Actual Cash Value, “the most limited level of coverage”, paying repair or replacement cost less depreciation; Replacement Cost, paying “without a deduction for physical depreciation” up to policy limits; Extended Replacement Cost, adding “additional coverage above the dwelling limits up to a stated percentage or specific dollar amount”; and Guaranteed Replacement Cost, covering “the full cost to repair or replace the damaged or destroyed dwelling for a covered peril regardless of the dwelling limits”. The statute also requires the agent or insurer to indicate on the disclosure form which coverages you have selected or purchased.

What is the California FAIR Plan?

Insurance Code section 10091 defines the Association as the California FAIR Plan Association, “a joint reinsurance association … formed by insurers” to help persons obtain basic property insurance, with insurers licensed to write and engaged in writing basic property insurance in the state participating to assist in “equitable apportionment among insurers of basic property insurance.” Basic property insurance is coverage “against direct loss to real or tangible personal property” in designated areas, including fire, extended coverage perils, vandalism and malicious mischief. We publish no coverage limits, eligibility rules or terms, because the FAIR Plan’s own site returned HTTP 503 on every attempt on 5 September 2026.

Can my insurer drop me after a wildfire in my area?

Not for one year, and not on that ground alone. Insurance Code section 675.1 provides that an insurer “shall not cancel or refuse to renew a policy of residential property insurance for a property located in any ZIP Code within or adjacent to the fire perimeter, for one year after the declaration of a state of emergency … based solely on the fact that the insured structure is located in an area in which a wildfire has occurred.” CAL FIRE determines the fire perimeter in consultation with the Office of Emergency Services and the Insurance Commissioner issues a bulletin identifying the affected ZIP Codes. This is a description of the statute, not advice about your policy.

Is flood covered?

Flood is not part of a standard residential property policy and is handled through the National Flood Insurance Program and its criteria at 44 CFR Part 60. A Special Flood Hazard Area is “[t]he land in the flood plain within a community subject to a 1 percent or greater chance of flooding in any given year”, and the elevation of the lowest floor relative to the base flood elevation is central to the program’s requirements — which is one reason to obtain an elevation certificate early. See our flood zone study for how that interacts with building an ADU.

How much does it cost to insure an ADU in California?

We do not know and we publish no figure. This page deliberately contains no rate, premium, limit, percentage or availability statistic, because the sources our own page contract named — the FAIR Plan’s published program documents and the Department of Insurance’s consumer material — returned HTTP 503 and HTTP 404 respectively on 5 September 2026. The California residential market has also moved quickly enough that an undated figure would be worse than none. Get quotations from a licensed broker, and note the date on them.

Written and audited by

HyreADU Research Desk

Primary-source research, data analysis and fact checking

We are a research desk, not a builder. We read the permit extract, the statute, the HCD return or the fee schedule ourselves, and publish each figure with its source and retrieval date.

Where a number cannot be traced to a primary source, we leave it out and say what we could not verify. Our store-based claims cover California only.

CA: the only state this desk will make store-based claims about
5: jurisdictions with extracted ADU permit evidence
735: CSLB-verified companies in the California store
0: national claims from a one-state store

How this desk works

Primary sources only. Permit counts come from the city or county that issued the permit. Production counts come from HCD’s Annual Progress Report. Rents come from HUD or the Census. We do not cite an article that cites a source; we download the source and compute the figure ourselves.
This is a California site. The company store is 734 California firms and one New Mexico firm. Permit evidence exists for five named jurisdictions: Los Angeles, San Francisco, Sacramento, San José and unincorporated Marin. A number from that store is titled to those places, never to the United States.
A permit is not a completion, and a license is not an ADU grade. California licenses no ADU classification. Being named on an ADU permit is evidence of engagement in that jurisdiction, not of quality, completion, or work anywhere else. Owner-builder permits are excluded from contractor counts.
Calculation is labeled as calculation. Figures we derive are never presented as something HCD, HUD, the Census or a city published. Terner Center research is cited as Terner’s, never restated as ours.
We do not design, permit or build ADUs, and we take no payment for placement, ranking or a favorable mention. Pages that look like rankings are not: they publish public-record counts and let the reader decide.
Nothing here is legal, tax or financial advice. Zoning, underwriting and appraisal practice vary by jurisdiction, lender and appraiser. The useful next step on a specific lot is the planning counter and a licensed professional.

Data as of Insurance Code §§ 675.1, 10091, 10101 and 10102 and Government Code §§ 66314, 66315, 66317 and 66342 retrieved from leginfo.legislature.ca.gov 2026-09-05; 44 CFR §§ 59.1 and 60.3 retrieved from the Legal Information Institute 2026-09-05; CAL FIRE Damage Inspection data queried directly 2026-09-05. Authorship on this site is organizational: the analysis belongs to the desk rather than to a named individual, and we do not publish credentials we do not hold.

Our editorial policy sets out how we source, date and correct what we publish.

Sources & retrieval dates

California Insurance Code § 10102 — the California Residential Property Insurance Disclosure , Requires disclosure of four dwelling coverage categories — Actual Cash Value (“the most limited level of coverage”), Replacement Cost (“without a deduction for physical depreciation”), Extended Replacement Cost (“additional coverage above the dwelling limits up to a stated percentage or specific dollar amount”) and Guaranteed Replacement Cost (“the full cost to repair or replace the damaged or destroyed dwelling for a covered peril regardless of the dwelling limits”) — plus Building Code Upgrade coverage, “also called Ordinance and Law coverage”, addressing “additional costs to repair or replace a dwelling to comply with the building codes and zoning laws in effect at the time of loss or rebuilding.” The agent or insurer “shall indicate on the disclosure form which coverages the applicant or insured has selected or purchased.” Retrieved 2026-09-05.
California Insurance Code § 10101 — delivery of the disclosure and the Bill of Rights , Requires that a named insured be provided “a copy of the California Residential Property Insurance Disclosure pursuant to Section 10102 and a copy of the California Residential Property Insurance Bill of Rights described in Section 10103.5.” The section does not itself define the coverage categories. Retrieved 2026-09-05.
California Insurance Code § 10091 — the FAIR Plan and basic property insurance , Defines the “Association” as the California FAIR Plan Association, “a joint reinsurance association … formed by insurers” to help persons obtain basic property insurance, with participating insurers “licensed to write and engaged in writing basic property insurance within this state”, to assist in “equitable apportionment among insurers of basic property insurance.” Basic property insurance is coverage “against direct loss to real or tangible personal property” in designated areas including fire, extended coverage perils, vandalism and malicious mischief; it “includes insurance for manufactured homes and mobilehomes under the same terms and conditions as basic property insurance sold for other residential dwellings” and “does not include insurance on automobile risks, commercial agricultural commodities or livestock.” Amended by Stats. 2025, Ch. 476, Sec. 1 (SB 525), effective 1 January 2026. Retrieved 2026-09-05.
California Insurance Code § 675.1 — post-wildfire moratorium on cancellation and non-renewal , “An insurer shall not cancel or refuse to renew a policy of residential property insurance for a property located in any ZIP Code within or adjacent to the fire perimeter, for one year after the declaration of a state of emergency … based solely on the fact that the insured structure is located in an area in which a wildfire has occurred.” The Department of Forestry and Fire Protection determines the fire perimeter in consultation with the Office of Emergency Services and provides the data to the Commissioner, who issues a bulletin identifying affected ZIP Codes. Amended by Stats. 2018, Ch. 618, Sec. 1.5 (SB 894), effective 1 January 2019. Retrieved 2026-09-05.
California Government Code § 66314 — an ADU may be rented but not separately sold , An ADU “may be rented separate from the primary residence, but shall not be sold or otherwise conveyed separate from the primary residence.” The same section provides that an ADU “shall not be required to provide fire sprinklers if they are not required for the primary residence.” Retrieved 2026-09-05.
California Government Code § 66315 — no local owner-occupancy requirement , “No additional standards, other than those provided in Section 66314, shall be used or imposed, including an owner-occupant requirement, except that a local agency may require that the property may be used for rentals of terms 30 days or longer.” Establishes that a configuration in which the owner does not live on the property is lawful — a materially different occupancy for underwriting purposes. Retrieved 2026-09-05.
44 CFR § 59.1 — substantial damage and special flood hazard area , Substantial damage: “[d]amage of any origin sustained by a structure whereby the cost of restoring the structure to its before damaged condition would equal or exceed 50 percent of the market value of the structure before the damage occurred.” Special flood hazard area: “[t]he land in the flood plain within a community subject to a 1 percent or greater chance of flooding in any given year.” Retrieved from the Legal Information Institute. Retrieved 2026-09-05.
44 CFR § 60.3 — elevation requirement for new construction and substantial improvements , Subdivision (c)(2) requires participating communities to mandate that “all new construction and substantial improvements of residential structures within Zones A1-30, AE and AH zones on the community’s FIRM have the lowest floor (including basement) elevated to or above the base flood level.” Cited here as the clearest example of a code-upgrade cost arising from a loss. Retrieved 2026-09-05.
California Government Code §§ 51178 and 51189 — fire hazard severity zones and recommended standards , Section 51178 requires the State Fire Marshal to identify moderate, high and very high fire hazard severity zones on statewide criteria. Section 51189 directs recommendations for standards addressing “fire resistant building materials, and standards for reducing fire risks on structure projections, including … porches, decks, balconies and eaves, and structure openings, including … attic, foundation, and eave vents, doors, and windows.” Both amended by Stats. 2021, Ch. 382 (SB 63), effective 1 January 2022. Retrieved 2026-09-05.
CAL FIRE Damage Inspection (DINS) Data — feature service , Queried on 2026-09-05 for the loss distribution cited on this page: structures recorded “Destroyed (>50%)” by incident start year — 22,701 in 2018, 16,512 in 2025 (of which 16,278 in Los Angeles County), 10,922 in 2017, and 53 in 2023. Total records 132,522, incident start dates 7 August 2013 to 23 November 2025. CAL FIRE notes that “not all structures impacted by the fire may be identified” because of fire damage and access limits. Retrieved 2026-09-05.
California Building Standards Commission — code editions and effective dates , “The 2025 California Building Standards Code (Cal. Code Regs., Title 24) will be published July 1, 2025, with an effective date of January 1, 2026.” The 2022 edition “was published July 1, 2022, with an effective date of January 1, 2023.” Establishes the mechanism by which a rebuild is a rebuild to a different code than the one the building was constructed under. Retrieved 2026-09-05.
California Department of Insurance — residential information guides index , Retrieved 2026-09-05. Lists nine residential guides by title, including “Residential Insurance: Homeowners and Renters”, “Building Communities Safer from Wildfires”, “Don’t Get Scammed After a Disaster” and “Residential Property Claims Guide”. No publication dates are shown on the index, and every attempt to retrieve a guide document returned HTTP 404. Recorded here so that the gap this page reports is auditable; nothing is quoted from any guide. Retrieved 2026-09-05.

Find the disclosure form and read one line

Insurance Code section 10102 requires your agent or insurer to indicate on the disclosure form which coverages you have selected or purchased. That line tells you which of the four dwelling coverage levels you hold, and whether you have Building Code Upgrade coverage. It is the most useful ten minutes available on this subject.

Wildfire rebuild study Flood zone study

HyreADU does not sell, place, broker or advise on insurance, is not a licensed insurance producer, and does not practice law. This page is informational and is not insurance, legal or financial advice.

It describes California statutes and federal regulations as retrieved on 5 September 2026 and publishes no rate, premium, coverage limit, availability statistic, percentage or policy-form convention, because the California FAIR Plan’s site returned HTTP 503 and the Department of Insurance consumer guides returned HTTP 404 on every attempt on that date.

The California residential property market has moved quickly; treat any undated figure you encounter elsewhere with suspicion, including figures older than this page.

Whether your policy covers an accessory dwelling unit, at what limit, and on what terms if it is let, is determined by your policy wording and by your insurer — put the question in writing before you build and again before the unit is occupied, and keep the answer.