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LONG BEACH, Calif. - The images coming out of Long Beach look like a textbook catastrophic property claim.

Ocean water is smashing directly into multimillion-dollar beachfront homes. Decks have disappeared beneath the surf. Windows and doors have been broken apart. Sand beneath foundations is being sucked away. Walls are cracking.

One yellow two-story oceanfront home on Seaside Walk became so compromised Sunday that its deck was submerged, a balcony was hanging toward the ocean and seawater was pouring into the structure. Long Beach lifeguards said the house had begun to collapse. Los Angeles Times

But there is a less obvious story developing behind those dramatic pictures.

Who actually pays for this?

And if California experiences the El Niño winter currently being forecast, Long Beach could become a preview of a much larger insurance fight.

The Long Beach loss is not simply a “storm claim”

The Peninsula has endured repeated punishment.

Long Beach officials say deterioration began with Hurricane Marie in September, worsened with Hurricane Polo and then accelerated when Rachel sent destructive surf into an already weakened shoreline. Parts of the historic boardwalk and protective bulkhead failed, allowing waves to attack the homes directly. Los Angeles Times

ABC7 reported Monday that eight buildings affecting 13 addresses had been red-tagged, while another had been yellow-tagged. Structural engineers warned that repeated wave strikes were removing sand from underneath foundations and potentially destabilizing the buildings themselves. ABC7 Los Angeles

That distinction matters enormously in insurance.

A homeowner might understandably look at a house damaged during a named storm and assume it is a storm loss.

An insurer may look at the same property and ask a very different question:

Was the damage caused by wind, floodwater, wave action, erosion, earth movement or some combination of all five?

That is where coverage can become complicated.

The coverage gap hiding underneath these homes

California's Department of Insurance says standard homeowners policies generally do not cover damage caused by flood, earth movement or tidal waves. Flood damage usually requires separate flood insurance. California Department of Insurance

That becomes particularly important in Long Beach because some of the worst visible damage appears to involve something even more difficult than simple inundation—the disappearance of the ground supporting the structures.

Federal flood insurance can cover direct physical damage caused by qualifying flooding, including overflow of tidal waters.

But the National Flood Insurance Program also excludes certain losses caused directly by earth movement, including landslides, land subsidence, destabilization of land caused by accumulated water and gradual erosion. California Department of Insurance

Imagine the potential claims dispute.

A wave enters a house and destroys flooring, drywall and furniture.

That may present a flood claim.

But if repeated wave action removes the sand underneath the foundation and the house subsequently shifts or collapses, insurers may examine whether the predominant cause was covered flooding or excluded erosion and earth movement.

That could turn a straightforward-looking catastrophe into years of coverage litigation.

Even the FAIR Plan may not solve the problem

California homeowners who cannot obtain traditional property insurance increasingly rely on the California FAIR Plan.

But the FAIR Plan itself warns consumers that it provides basic property protection and does not substitute for separate flood or Difference in Conditions coverage. California regulators similarly warn that FAIR Plan policies generally do not provide storm-related flood protection unless supplemental coverage has been purchased. California Department of Insurance

That creates a potentially dangerous insurance stack for coastal homeowners:

FAIR Plan + DIC policy + federal or private flood insurance.

A homeowner can have multiple insurance policies—and still encounter a gap if the decisive cause of loss is classified as erosion, land movement or structural instability rather than covered flood damage.

That may be one of the most important unanswered questions coming out of Long Beach.

Long Beach probably will not be the last California community dealing with this

The current danger is not confined to one small stretch of Seaside Walk.

During Rachel, coastal flooding threats extended through San Diego, Orange, Los Angeles, Ventura, Santa Barbara and San Luis Obispo counties. Newport Beach also experienced ocean water pushing into streets after high surf and elevated tides overwhelmed coastal defenses. Los Angeles Times

And the winter setup is concerning.

The World Meteorological Organization says the current El Niño is expected to continue into February 2027 and could become one of the strongest since reliable records began around 1950. Tropical Pacific temperatures were forecast to reach approximately 3.7 degrees Celsius above normal, which would exceed the peak associated with the powerful 2015-2016 El Niño. Reuters

California Insurance Commissioner Ricardo Lara has already described the upcoming conditions as a “likely historic” El Niño and warned Californians to prepare for flooding, heavy rainfall, mudslides and debris flows. California Department of Insurance

The bigger danger may be water coming from both directions

What makes the coming winter unusual from an insurance perspective is that California does not need another tropical storm striking Long Beach to generate huge losses.

Consider several hazards occurring together.

Atmospheric rivers can saturate coastal hillsides from above.

Elevated ocean levels and powerful swells can erode them from below.

Groundwater can rise.

Storm drains can become overwhelmed.

Burn scars can generate debris flows.

Coastal bluffs can fail after prolonged saturation.

And high tides occurring simultaneously with large swells can prevent stormwater from draining efficiently into the ocean.

That combination is particularly relevant in places such as Malibu, Palos Verdes, Dana Point, Laguna Beach, San Clemente, Ventura, Santa Barbara, Santa Cruz, Monterey Bay and Pacifica, where expensive property exists near bluffs, beaches or low-lying coastal areas.

Not every location faces the same geological or wave exposure, but the mechanism is similar:

water saturates the land while the ocean attacks the edge supporting it.

FEMA acknowledges that bluff failure can involve precipitation, irrigation and undercutting from wave action—a combination that is difficult to model and is not treated exactly like ordinary flood inundation. FEMA

That is an insurance nightmare because several different causes can operate simultaneously.

Long Beach may be California's insurance warning flare

The physical damage happening today on the Long Beach Peninsula is visible.

The insurance consequences are only beginning.

So, the most important question may not be whether California insurers are headed toward one enormous El Niño catastrophe.

It may be whether the state is headed toward hundreds or thousands of complicated losses in which flood, erosion, saturated ground, landslides, waves and wind collide—and no single insurance policy was designed to cover all of them.

Long Beach may simply be where Californians are seeing that problem first.