California Homeowners Insurance

Purchasing California homeowners insurance can prove to be a confusing decision, filled with unknown jargon and many options that make the policy more expensive.  While CA homeowners insurance is not required by the state, it will most likely be required by your mortgage company.  If you are one of the few people who bought your house without a loan, you still will want homeowners insurance to protect what could very well be your biggest investment!

California Homeowners Insurance Basics

California has a tumultuous environment, complete with earthquakes, flooding, and areas prone to forest fires.  For the homeowners in areas that have a history of some of these disasters, this is an important fact!  Most basic homeowners policies do not cover earthquakes or flooding, so you must purchase a separate policy to cover these risks.

So what does a California homeowners insurance policy cover?  Unfortunately, there is no easy answer.  It depends on the type of policy you have, but here is a list of typically covered perils:

However, it is extremely important to check your specific policy to see what is covered and compare that to the dangers you might face in your region.

Types Of Property Covered By California Homeowners Insurance

Next, here is a breakdown of what types of property are covered on your homeowners policy.  The policy is split into two sections: property and liability coverage.  The property coverage includes coverage to your home, other structures on your lot such as a garage or storage shed, personal belongings, and loss of use coverage.

• Coverage for your home should be at the replacement cost, or in other words how much money it would take to rebuild it.  This is not the market cost, and be careful to take into consideration any renovations you may have added. A less popular alternative is the actual cost.

• Coverage for other structures is set at 10% of what you allot for a limit to the home.  For example, if you insure your house for $300,000 to rebuild, you will have $30,000 limits of coverage for other structures on the property.

• Coverage for personal property is set at a limit of 50% of your home, or continuing this example, you would have $150,000 for personal property.  One thing to keep in mind is that most insurance will put limits on certain property, such as a limit to $1,000 for theft of jewelry.  To insure jewelry past that limit you will need to purchase an endorsement.

• Coverage for loss of use in your damaged home will vary by policy.

Liability coverage provides protection against accidents that happen on your property.  There are two components that protect against liability claims and medical payments.  The typical limits you see are at least $100,000 for liability claims and $1,000 for medical payments.  These limits are general limits and you should consider your personal assets and risks to see if they should be higher.

California Homeowners Insurance Frequently Asked Questions

1. How do I know what the replacement cost of my house is?

The replacement cost is defined as the dollar amount it will cost today to rebuild your home.  Thus, this is something that will update each year as you improve your home with renovations and of course, for inflation.  To know what your replacement cost is, you will need to have an appraisal done not for market value but for replacement value.  This is essential if you are in regions that are at risk to the wildfires; the Department of Insurance found that after the most recent wildfires, an astounding 40% of people affected did not have enough insurance to rebuild.

FEMA will provide flood insurance, and you can purchase this through your insurance company.  There is a similar organization that offers earthquake insurance called CEA.  This is typically just minimum coverage, so be sure to consult with the insurance company you choose for homeowners to see if they contract through anyone.

Limits are subject to your personal home, assets and overall risks.  Consulting with an agent is the best approach.  In terms of which deductible, that all depends on what you can afford to pay out of pocket when a claim happens.  Keep in mind that the higher the deductible, the lower your yearly premium will be.

Your mortgage company won’t continue a loan without insurance, but most importantly, there is a penalty for having lower limits.  In California, if your policy limits are at 80% or under for the replacement cost of your home.  This is called a coinsurance policy meaning that you would be responsible for out of pocket expenses if a claim was submitted.

Finding Cheap California Homeowners Insurance: How to Save Money

Here are some quick tips to save money on your CA homeowners insurance policy:

• Take advantage of the website you are on and use our FREE search tools!  The Internet has provided you with the upper hand in shopping around. Enter your zip code into the quote finder at the top of the page to comparison shop rates from top CA insurance companies.

• Upgrade, upgrade, upgrade.  I’m not talking about remodeling the first floor bathroom.  Install safety equipment of all kinds- new locks, smoke and fire alarms, and alarm systems- and in return, receive discounts!

• Be more loyal.  Companies tend to reward customers with tenure discounts.

• Try it before you buy it.  Are you one of those shoppers that check the tag to make sure you don’t have to dry clean clothes before you buy it?  Same principle- get a quote before purchasing your new home.

Start Protecting Your California Home Now!

Get started saving money and protecting your investment by using our free search tools at the top of the page to find California Homeowners Insurance.

Find the best policy for the best price by comparing quotes from top California home insurance companies!

Get started comparing California homeowners insurance quotes now!