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Homeowners Insurance in California

By Posted : June 10, 2020

Homeowners Insurance in California

Here we outline what you need to know to make smart choices when buying homeowners insurance in California. We rank the best homeowners insurance companies in California, identify cheap homeowners insurance companies in California for six coverage levels and provide expert recommendations on how much coverage you need.

No matter where you live, it pays to compare rates for homeowners insurance. The same is true for California. Premiums can vary, sometimes by a little, sometimes by a good amount more.

Why is that? Michael Barry, a spokesman for the Insurance Information Institute, a trade group, explains that various factors influence home insurance rates. They can include building costs in your area, local crime rates, and the risk where you live from natural disasters such as hurricanes, hail storms and tornadoes. And, of course, insurance companies want your business and that may affect pricing.

Here we will provide information on:

  • Homeowners insurance: California average cost
  • How deductibles affect your insurance rate
  • California homeowners insurance comparison: Rates for 10 coverage levels
  • California home insurance comparison by ZIP code
  • California home insurance rates by company
  • Best homeowners insurance companies in California
  • California home insurance discounts
  • Other types of home insurance you may need in California
  • Methodology

What is the average cost of homeowners insurance in California?

The average cost of home insurance in California is $1,166, making California the second-cheapest state in the country for home insurance. Its average cost is $1,139, or nearly half the national average of $2,305, for the coverage level of:

  • $300,000 dwelling coverage
  • $1,000 deductible
  • $300,000 liability

What is the best homeowners insurance in California?

The homeowners insurance company with the cheapest rates isn’t necessarily the best. Other factors to consider are customer service and claims processing. Insure.com’s 2020 Best Home Insurance Companies report ranks major insurers on feedback from 3,700 customers. They are asked about the value for the price, customer service, claims service and if they’d recommend the company.

Here is how the best home insurance companies in California ranked on the survey. Scores are out of 100. 

Best homeowners insurance in California

Chubb, USAA, Safeco, AIG, Liberty Mutual, Nationwide, Hartford, State Farm, Esurance and Allstate are the top 10 best carriers for home insurance, based on customers’ feedback on our survey.

RankCompanyScore
1Chubb (ACE INA Group / Ace Limited)94.467
2USAA90.324
3Safeco88.516
4AIG (American International Group)86.602
5Liberty Mutual86.177
6Nationwide85.778
7Hartford85.221
8State Farm85.043
9Esurance84.818
10Allstate83.851
11Progressive82.69
12Farmers81.543
13American Family81.219
14Travelers79.162

Cheap home insurance companies in California

Based on our rate analysis, you’ll see Garrison was the cheapest home insurance company, among carriers surveyed.  USAA, Allstate, and Travelers also had cheap insurance rates for California homeowners, compared to the other companies. Here are home insurance rates by company for dwelling and liability coverage of $300,000, with a $1,000 deductible.

CompanyAverage annual rate
Garrison$791
USAA$797
Allstate$900
Travelers$919
General Insurance$976
CSAA Insurance Exchange$1,113
State Farm$1,157
Safeco$1,169
Nationwide$1,250
Interinsurance Exchange of The Automobile Club$1,319
Farmers$1,401
Crestbrook$1,438
Foremost$1,544
Mid Century$1,593
Fire Insurance Exchange$1,615

Because costs are not uniform, it's crucial to shop around for the best home insurance rate.

Many factors influence the price you pay for insurance. Among others, the Insurance Information Institute (III) cites the following:

  • Your home's square footage
  • Building costs in your area, and your own home's construction, materials and features
  • Local crime rates
  • The likelihood of certain types of disasters, such as hurricanes

So, shop around for the right policy. Senior Consumer Analyst Penny Gusner suggests getting at least three price quotes when shopping for coverage, and says that doing so can save you up to hundreds of dollars annually.

Although California home insurance costs can be expensive, it's a mistake to cut corners in an attempt to save. Gusner recommends that you get enough insurance to cover the costs to:

  • Repair or replace the structure of your home and personal possessions
  • Defend yourself against liability costs if someone is hurt on your property
  • Pay for a temporary place to live while your home is repaired or replaced

Homeowners insurance California rates by ZIP code

By entering your ZIP code in the search box and desired coverage level, you’ll see the average home insurance rate for that area. You will also see the highest and lowest premium fielded from major insurers. This will give you an idea of how much you can save by comparing home insurance rates. The difference between the highest the highest rate and the lowest rate is how much you can save by shopping your policy.

 Home insurance in Los Angeles (CA) and California’s other largest cities

Let’s explore average rates for some of the state's largest cities, for a policy with $300,000 in dwelling and liability coverage, with a $1,000 deductible. You’ll see homeowners insurance in the state’s largest metro areas is in line with the state average.

CityAverage rate$ difference from state average $1,166
San Jose$997$169 less
Long Beach$1,049$117 less
San Diego$1,067$99 less
San Francisco$1,076$90 Less
Sacramento$1,094$72 less
Fresno$1,144$22 less
San Bernardino$1,211$45 more
Oakland$1,227$61 more
Los Angeles$1,285$119 more

California home insurance explained and How much coverage to buy

Among key things to consider when buying a homeowner insurance policy, you decide the coverage amount for the following:

  • dwelling
  • liability
  • medical payments

The limits of your coverage for the following are typically a set percentage of your dwelling coverage limit as shown below:

  • other structures – 10%
  • personal property – 50%
  • loss of use – 20%

Our list of tips for buying home insurance starts with knowing the difference between replacement cost and market value, and why it’s important in terms of coverage. When buying home insurance, you should insure your home based on its replacement cost, which is the amount you need to rebuild it if damaged or destroyed, and not its market value, which is what you could sell your home for in its current condition. Replacement cost offers more protection because the cost of building a home often exceeds its market value.

When shopping for a policy, you should be aware of the basics of home insurance, which begins by choosing a “dwelling coverage” amount. You should select a dwelling coverage limit that best matches the cost to repair damage to your home or rebuild it completely at equal quality — at current prices. This can be an arduous task, so using online calculators or hiring an appraiser to give you a replacement cost valuation will save you time.

Liability insurance applies to incidents in which you’re at fault and the result is that a guest in your home or on your property is injured. It covers medical expenses, as well as damage caused to neighbors’ property. Personal liability also covers legal fees if you are sued, as well as any resulting judgments from a lawsuit, up to your policy limits.

Most home insurance policies come with $100,000 in personal liability insurance but this is rarely enough coverage. The cost to defend a lawsuit or to pay for medical expenses for a serious injury can easily exceed that amount. Most experts recommend upping your limits to at least $300,000.

Medical payments also pays for injuries to guests in your home but differs from liability in that it applies to injuries regardless of who is at fault. It is for minor incidents as it comes with much lower coverage limits than liability insurance. Medical payments coverage is typically for $1,000 or $5,000.

You also choose a deductible, which applies to your dwelling coverage.

How deductibles affect your insurance rate

A deductible is the amount of money you pay before your insurance company pays out on a claim. For example, if your home sustains damage of $3,000 and you have a $500 deductible, you pay the first $500 and your insurer pays $2,500.

Some deductibles are based on dollar amounts. Others are based on a percentage of your home's value. If your home is insured for $200,000 and your deductible is 2%, you will owe $4,000 before insurance coverage kicks in.

You  choose a home insurance deductible amount, which applies to claims for damage to your home or belongings, but not if you’re sued or a medical claim is filed by someone injured in your home. These are typically in the amounts of $500, $1,000, $1,500, $2,000 and $2,500.

Understanding the implications of the deductible you choose when buying homeowners insurance is important. In California, as in all the states, a higher deductible means you'll save on insurance premiums.

The savings can be significant. Barry says that most insurers recommend a deductible of at least $500, which may be ok for you. But keep in mind that by raising that to $1,000, you're likely to save as much as 25% on your policy, according to the III. Of course, that's $1,000 out of your pocket if there are major problems, so it's a bit of a balancing act.

 California homeowners insurance comparison: Rates for 10 coverage levels

Here we show the average cost of California homeowners insurance for 10 coverage levels, based on a rate analysis by Insurance.com. 

Enter a dwelling coverage of $200,000, $300,000, $400,000, $500,000 or $600,000. You will see annual average rates based on a $1,000 deductible for each liability limit of $100,000, $300,000.

CoverageAverage annual rate
$200,000 dwelling/$100,000 liability$800
$200,000 dwelling/$300,000 liability$820
$300,000 dwelling/$100,000 liability$1,144
$300,000 dwelling/$300,000 liability$1,166
$400,000 dwelling/$100,000 liability$1,485
$400,000 dwelling/$300,000 liability$1,508
$500,000 dwelling/$100,000 liability$1,862
$500,000 dwelling/$300,000 liability$1,888
$600,000 dwelling/$100,000 liability$2,278
$600,000 dwelling/$300,000 liability$2,308

California homeowners insurance discounts

There are several ways to reduce your California home insurance costs. Many insurers will lower your bill if you purchase more than one type of insurance policy from them. This process – known as "bundling" – can cut your costs by up to 19%, on average, according to Insurance.com’s discount data analysis.

You can also cut your costs by making your home more disaster-resistant. Installing hurricane glass or accordion shutters might net you a discount.

Other possible home insurance discounts include:

  • Installing smoke detectors, a burglar alarm or dead-bolt locks -- 5% each
  • Installing a sprinkler system, and a fire and burglar alarm -- 15% to 20% percent
  • Loyalty discounts – about 4%  on average, after three to five years, and  6% for six years or more

California homeowners insurance FAQs

1. Does home insurance cover wild fire damage?

The short answer is yes. The Insurance Information Institute (III) — a non-profit consumer group sponsored by the insurance industry — notes damage or destruction from fire, including wildfires, are usually covered under a standard home insurance policy. Check with your insurance company and policy to confirm wildfires are covered as insurance offerings can change depending on location.

In the event your home is rendered inhabitable because of the fire, you can also file claims for additional living expenses. For example, you may need to get a hotel room and your insurance company may reimburse you for these costs. Additionally, you have the option to have your vehicle covered for fire damage under your auto insurance policy if you carry comprehensive insurance. 

However, due to the frequency of severe wildfires in the state over the past several years, insurers have started to charge extra for coverage in some cases, refuse to renew policies or refuse to sell new policies in some areas.  In California, for example, if you live within 2,500 feet of a canyon or area deemed high-risk by insurers, you may have to pay extra for coverage or you may even be denied a policy.

To help homeowners, the state insurance commissioner enacted a law that prevents home insurance companies from denying coverage due to wildfire risk up to December 2020. The mandatory one-year moratorium covers more than 800,000 residential policies in ZIP Codes adjacent to recent wildfire disasters under the Wildfire Safety and Recovery Act. “While existing law prevents non-renewals for those who suffer a total loss, the new law established protection for those living adjacent to a declared wildfire emergency who did not suffer a total loss—recognizing for the first time in law the disruption that non-renewals cause in communities following wildfire disasters,” reads a statement from the commissioner.

2. Why do I need flood insurance?

Floods are a potentially costly danger for homeowners in California. Every county in California has been declared a federal flood disaster area at least once in the last 20 years, according to the state's Department of Water Resources.

In the U.S., most flood insurance is sold through the National Flood Insurance Program. Such policies offer up to $250,000 in coverage for the structure of the home, and another $100,000 in protection for personal possessions. A typical policy costs about $600. If you need more protection, you can purchase supplemental flood insurance for a private company.

California had about 240,000 flood insurance policies in force as of the end of February 2017.

Just 12% of U.S. homeowners have a flood policy, according to III. That leaves them in great danger should flood waters or mudslides damage their homes.

For more information on flood insurance coverage, visit the National Flood Insurance Program website and read our guide to flood insurance.

3. Why do I need earthquake insurance?

More than any other U.S. state, California is infamous for its history of earthquakes. Every part California is at risk for these natural disasters, according to the California Governor's Office of Emergency Services.

Californians who have a mortgage are required to have homeowners insurance.

However, homeowners are not required to buy earthquake insurance. As a result, just 10% of Golden State homeowners have earthquake coverage, according to the III.

By law, a California homeowners insurance policy must cover fire damages that result from an earthquake. However, all other earthquake damages fall outside the scope of homeowners insurance coverage. Therefore, you must purchase earthquake insurance to be protected.

The California Earthquake Authority is a privately funded, publicly managed nonprofit that provides a large percentage of the earthquake insurance policies sold to California homeowners. You cannot buy such insurance directly from the CEA, but instead buy it from insurers that are members of the CEA. 

You can find a list of such insurance companies at the CEA website. California regulations require you to purchase earthquake insurance from the same company that sells you a homeowners policy. 

The CEA offers an online premium calculator that can help you estimate your earthquake insurance costs.

Earthquake insurance has its limits. The purpose of such coverage is simply, "to help put a roof back over your head," according to the CDI. That means this insurance does not cover all damage associated with temblors, including damage to other structures such as garages and pools.

Earthquake insurance also does not cover:

  • Fire damage. Your homeowners policy covers this.
  • Land damage. This includes sinkholes and other hidden openings.
  • Vehicle damage. Auto insurance covers this damage.
  • Flood damage. Lake flooding, sewer backup and tsunami inundation are examples of flooding not covered by earthquake insurance. You need flood insurance to protect you from these dangers.

A CEA policy does offer some coverage for personal property and loss of use. Other coverages beyond basic protection of the home might be available to homeowners willing to pay additional premiums.

Today, earthquake coverage typically includes a percentage deductible that determines how much you must pay out of pocket before your insurance kicks in. A typical CEA earthquake policy has a percentage deductible this is 15 percent of the home's replacement value, according to III.

That means someone whose home replacement value is $300,000 would be on the hook for $45,000 in repairs before their hurricane insurance policy begins to reimburse them.

4. How can I save on earthquake insurance?

The way your home was constructed – and the nature of the soil supporting it – largely influence the price you are charged for earthquake insurance. By law, your homeowners insurance company must offer you earthquake insurance, even if your home doesn't measure up to the latest earthquake codes.

Your premium costs might soar if your home is not up to snuff, though. By contrast, premium costs could drop sharply if you take steps to make your home more earthquake resistant. Examples of making your home stronger include:

  • Bolting the house to the foundation
  • Bracing the water heater to a wall
  • Adding valves that automatically shut off valves

5. What can I do if I can't get homeowners insurance in California?

California residents who cannot find homeowners insurance can turn to the insurer of last resort, known as the California FAIR Plan. You can check out this coverage at the CFP website or by calling 800-339-4099.

Coverage in the FAIR Plan is limited to losses associated with fire or lightning, internal explosion, and smoke. If you pay an extra premium, you can get coverage for other perils, such as windstorm, hail, explosion and other damages.

Because FAIR Plan coverage is less comprehensive, you should only consider it if you absolutely cannot find an appropriate homeowners insurance policy, warns the CDI.

If you need theft or liability coverage, consider purchasing a "differences in conditions" policy that will cover these gaps. You can find a list of providers of such coverage at the CDI website. 

6. Where do I get claims processing info or file a complaint?

If you end up in a dispute with your insurer, consider contacting the California Department of Insurance. You can file a complaint by dialing 800-927-4357.

Or, you can file a complaint online. When doing so, you can upload supporting documents, such as:

  • A copy of your insurance card, both front and back
  • Any relevant correspondence between you and the insurer
  • A copy of a completed authorization and designation of agent form