California residents who own their home or rent should have a comprehensive home or renter's insurance policy. The California Department of Insurance (CDI) regulates policies issued in California and must approve each insurance company's calculated rates.
Premiums for home and renter's insurance vary greatly and are based on a number of factors. These include:
● Location of the property.
● Age of buildings on the property.
● Construction type.
● Proximity of the property to local fire protection services.
● Deductible amount you choose.
● Amount of insurance coverage
- Applicable discounts.
No matter if you need a brand new policy or want to renew an existing policy, it’s important to shop around for the best rates and coverage. Make an apples-to-apples comparison of deductibles and coverage limits. Choosing a higher deductible reduces your premium. However, be sure you have enough savings on hand to pay the deductible if you need to make an unexpected claim.
Comparing Home Insurance Rates
Each home insurance provider in California reports annual premiums for new policies based on where you live. This information can help you determine what the average insurance premium should be for a home in your area based on the coverage amount you need and the age of the property.
The Statistical Analysis Division (SAD) of the California Department of Insurance conducts an annual evaluation and analysis of the home insurance premiums in California. This data is provided on the CDI website and is available for home, renter’s, condominium, and mobile home insurance policies.
Preparing for Natural Disasters in California
Fire, floods, mudslides, and earthquakes are some of the natural disasters that Californians experience as homeowners and renters. A standard home or renter’s policy gives you protection against fire damage. However, you must purchase a separate policy for earthquakes and floods. The California Earthquake Authority (CEA) issues the regulations that insurance companies must follow if they offer earthquake coverage to consumers.
If you live in areas prone to floods, you should purchase flood insurance. Flood prone areas in California include southern California, the San Francisco Bay area, the Delta region, and the Central Valley.
If you’re unsure about your risk for floods, fires, earthquakes, and mudslides, you can use the California Emergency Management Agency's online hazard tool to assess what types of coverage for natural disasters you need.
Things to Consider When Moving to California
New residents should purchase home or renter's insurance as soon as they sign a contract to purchase or rent property. If you’re getting a home mortgage, proof of home insurance is required at closing. Renters may be required to have insurance depending on the landlord and the terms of your rental agreement. Prior to moving to California, you should shop around and obtain several home or renter’s quotes
Frequently Asked Questions About California Home Insurance
Many homeowners and renters have questions about what coverage home or renter’s policy gives you.
Here are the answers to some common questions:
1. How much home insurance should I buy?
The amount of coverage will vary depending on the construction cost to replace your home. For homes with mortgages, insurance should cover the complete cost of the loan. This allows the loan to be paid off in the case of total loss. Your personal belongings should also be insured against theft or damage from a covered event, such as a storm. Create a home inventory with approximate values so you can tally the proper amount of personal property coverage you’ll need for a home or renter’s policy.
2. Does a home policy cover fire, flood, and earthquakes?
Standard home insurance policies cover fires, even if they are caused by a natural disaster such as an earthquake. However, you can purchase separate flood and earthquake policies to cover your home and possessions against damage.
3. Are liability claims covered by a home insurance policy?
Liability claims and coverage are part of a standard home insurance policy. This type of insurance protects you against a lawsuit if someone is injured on your property and they sue for medical or other damages. Liability coverage also protects against property damage or bodily injury claims that you’re legally responsible for.
4. Does credit affect the amount of insurance premiums?
In California, it is illegal for an insurance company to use your credit rating to set your rates.
5. What should you do if your home insurance policy is canceled, or lapses?
Most insurance companies offer a short grace period for non-payment. If you make payment within the grace period, your coverage won’t be interrupted.
How to Get Great Rates on California Home Insurance
Has it been a while since you shopped for homeowner’s insurance? Is so, loyalty doesn’t always pay because prices vary from insurer to insurer. Another company may offer you a much better deal. Looking for home or renter’s insurance quotes? insuranceQuotes.com can help you find the best homeowner’s or renter’s insurance policy at the best price. Every year, we match 15 million consumers to the nation’s biggest home insurance companies, including Allstate, State Farm and Farmers.
California Auto Insurance Resources
CA Department of Insurance
Information on insurance-related laws and regulations that protect California consumers