Home insurance costs in California 2021

Home insurance costs in California

Living in California is quite exciting: the ‘Golden State’ has much to offer, to mention some, beatiful beaches, mild climate most of the year, nature and big cities famous in the world, with so many things to do all time, countless opportunities of business. If you like the Western style of life, here you can find home: quality of life ranks high among U.S. States, while at some costs. Now that you got house here, it is imperative to make a long-term commitment for keeping it safe; buying a standard homeowners insurance policy is not only fundamental, but in most cases not even sufficient. Let’s see why.

The most frequent and dangerous hazards in California are also well known: wildfires and earthquakes. Following, in order of severity, are floods, mudslides and heavy rains with thunders. All these are due to the width of territory, which is in a peculiar geographical and geological position.

That said, you may want at first to know how much you can expect to pay from a basic homeowners policy: the average annual cost in California is $1,095 from our analysis*. In the below table you can see more details for five populous cities.

 

 

We researched quotes from major insurance companies: Amica, Chubb, Farmers, The Hartford, Liberty Mutual, Nationwide, Progressive, Safeco, Statefarm, Travelers, and USAA, then averaged them to show you the premium.

City ZIP Median home value Square ft Premium
San Jose
95111
$650,000
1640
$1,070
Fresno
93722
$640,000
1500
$1,150
Long Beach.
90806
$580,000
1500
$1,080
Oakland
94605
$600,000
1930
$1,240
Bakersfield
93306
$210,000
1500
$1,200

 

Houses are equipped at least with 3 beds and 2 bathrooms. The estimated dwelling coverage is $300,000, and the applied deductible is $1,000. However, dwelling coverage will be actually different for each home, and based on (but distinct from) its value: this coverage is for homes replacement cost, that is to say for repairing or rebuilding in case of respectively damage or loss.

 

What coverages do you need in California?

 
 Higher than national average premiums are not only due to prices of homes but also to the overall risk factor associated with the likelihood of extreme natural phenomenons.

 

Fire insurance

 
Wildfires represent at now the number one menace in California: in the last decade, there have been devastating fires, among the most severe in the United States. Insurers definitely take this into account: in some cases, they don’t even offer coverage if a house is located in a highly risk-prone area, because they couldn’t handle the amounts of claims.

The good news is that fire a is peril typically covered by a standard home insurance policy, like H0-3: however, don’t be satisfied with that and be aware of the coverages. You must select an adequate amount of dwelling coverage (in doubt even a bit of excess) in order to protect the house in the case of a total loss: it must be at least equal to the home replacement cost, remember this.

In the case of being rejected, you can turn to independent insurers or brokers who will find local companies offering dedicated coverage; if neither this option is viable, then the State of California has the FAIR Plan you can rely on. It is a public program that provides assistance and coverage from fire damage, coming with higher prices than private solutions.

 

Earthquake insurance

 
Second only to wildfires are earthquakes, as for frequency and severity. Apart from its beauties, California is also sadly known to have a turbulent soil, at the first place among U.S. Many quakes happen through one year, especially in the South, due to the position of several faults, but only a few are of such magnitude to be harmful; however, the cumulative effect is something to be considered when you want to keep your home safe in the long term. That means regularly check for cracks in the walls, requesting appraisals for the ground and state of the roof assessments, just to mention some.

More important is to survive a major loss, such as derived in the recent past from a couple of very strong earthquakes. Earthquake is not a peril mentioned on a standard homeowners policy paperwork: you are not covered at a basic level. That means you have to purchase specific insurance, whether if you are in a single-family house or condo if you live in or it’s a business property. While not mandatory, for instance not required by mortgage lenders, it is highly recommended to have one.

Earthquake insurance is an extension of the standard policy, offered by most of the major insurance companies; through those, you can get access to the FEMA (Federal Emergency Management Agency) plan. Don’t underestimate the possibility: indeed, few Americans are insured against earthquakes. This policy works just as a standard, with coverages applied separately to the building, contents, and for loss of use (additional living expenses): as for dwelling coverage, deductibles are not estimated as an absolute value, but in percentages, between 10 and 20%.

The cost of earthquake insurance is extremely variable, depending on the size and location of your house: in some cases, it can overcome the premium of a standard policy. To get this insurance, you should compare quotes from multiple insurance companies, to find the most affordable for you; otherwise, the National Earthquake Authority (CEA) offers a dedicated plan, accessible through an insurance company that adheres to it, provided you already have a current basic policy with them.

 

Flood insurance

 
Another issue for Californians, especially for the Northern inhabitants, can be the exposure to floods that derive from rainstorms: proximity to rivers that can overflow is a risk to be considered for some houses; this can also lead to the formation of mudslides, which can cause extensive damages.

Flood is not included as a covered peril on a standard policy: if your house is in a risky location you should, by all means, buy flood insurance, which you can get a private company or from the National Flood Insurance Program. The former option tends to have greater flexibility about rates and limits of coverage, while the latter is more of a last resort. Also, this kind of insurance has different prices according to several factors, but it is safe to expect around $800.

An exception can be when a flood is caused in the first place by another hazard for which you are covered at a basic level: if after a fire, the soil is so dry that can’t absorb water of the following rain, and a mudslide developed, this last might not be considered responsible for damages to your house.

 

How can you save on home insurance in California?

 

There are several factors under your control that you can manage to get lower premiums for your policy:

  • updating your house to all weather-related conditions: this means measures like reinforcing the walls and foundations to resist quakes, having a fire extinguisher, strengthening the windows against hail and rainstorms.
  • the roof is a crucial component: it must be resistant to loads of rains, thunder, and collapsing because of quakes. Depending on where you live and the risk associated, you shall decide the better suitable materials:
  • age of the house is another factor: it could cost much more to rebuild an old house, so your premium will be higher than standard if you live in such a house, that is to say, older than 40 years, while not meeting the modern requirement of a standard policy. Consider retrofitting the house in the future, so as to save at the policy renewals.
  • if you are not a new homeowner, but renewing the policy you should know that claims push up the premium even by a 20-25%:moreover, your filing is stored for several years (up to seven) in the CLUE database, accessible by all insurance companies. This means to be thrift on the necessity of asking compensation from insurance, with the given exceptions.

Having a ‘good’ credit score is always welcomed by insurers: it is an index of financial wealth, which means a minor proneness to file claims but to rely on own resources to fix damages suffered from the house. Such a score is recognized to be above 670; in California, the average was 708 for 2019 (source:experian.com). The higher the score, the most beneficial would be for your premium.

Consider also not having pets particularly dangerous for others, like certain dogs or exotic animals, that might configure a call for liability and tap into the insurance companies funds.

Not last, you can act measures of defense against crime: this can be a serious issue, in particular burglary, for high worth properties. You could, for instance, install anti-theft alarms, reinforcing doors and windows, and keep a safebox; insurers will know that your house is kept safe and allow you a more comfortable premium.

  • Other general strategies to keep the policy as low as possible are: getting multiple quotes, choosing a high deductible, bundling home insurance with auto insurance, renewing the policy with the same company.

Now, if you didn’t already, use the calculator on this website to have a first realistic estimate of your annual premium with adequate coverages, then go obtaining quotes from the best insurance companies on the market.

* Methodology: we aggregated and averaged multiple quotes for every city of the State, assuming a 35 years old individual, married, with a good credit score. Our effort is to keep data always updated and the most accurate possible, so as to satisfy at best the consumer’s expectations.The