Home Insurance in California


UPDATED: NOV 2020 | 2 MIN READ

Home insurance in California is a bit of a mixed bag. There are several factors at play which can make it quite expensive. Property values are higher, which means you have to purchase more coverage in order to adequately protect your property. Wildfires and earthquakes are very common among California homeowners, they’re very expensive to insure against, and get even more expensive if you actually suffer one of these perils. At the same time, most Californians enjoy higher incomes and – special coverage and floaters aside – your basic homeowners insurance policy isn’t that much more expensive than the national average. If you’re lucky and you shop smart, there’s a very real chance you can find an affordable homeowners insurance policy – even in California. 

  • Fun fact: California is home to the world’s largest tree. Its name is General Sherman, and it’s located in California’s Sequoia National Park. The width of its trunk is the height of a telephone pole (33 ft) and it is over 275 feet tall – which is just short of a football field! 

Average Rates in California

According to the Insurance Information Institute, if you take all 50 states in the US and rank them from most to least expensive for annual homeowners insurance premiums, California ranks in at number 32. Average premiums are $1,008, which is over $200 lower than the national average of $1,211. It’s a little unclear whether this $1,008 is reflective of just a basic HO-3 homeowners insurance policy, or whether it incorporates the costs of protections against perils like earthquakes, wildfires, or landslides. Comparatively, New Mexico and Maryland are actually more expensive for homeowners than California; but Indiana and Virginia are just a little bit cheaper. 

But what if you’re looking to rent instead of owning your own home? Compared to the national average, California renters aren’t in a bad spot. Well the national average is around $180 annually for renters insurance premiums, Californians are paying slightly more at an average of $182. It’s not the cheapest, but it could be much, much worse. 

California Legal Insurance Requirements

The funny thing about homeowners insurance is that – contrary to the way things like auto insurance work – it’s not legally required according to state and local laws. But the fact is that the vast majority of homeowners are only able to afford their home because they get a mortgage or a home loan from a bank. Since the home is still technically the property of the bank until you pay off your mortgage, the bank can make demands on you and require you to purchase homeowners insurance. They can also require you to purchase additional coverage – with regard to earthquakes, floods, wildfires, and more – if they think that your home is in a high-risk area and want to protect their investment. So it’s best to cooperate with them and purchase the coverage you need in order to stay on good terms with your lender. 

Common Risk Factors in California

The most threatening natural disasters for California homeowners are wildfires, earthquakes, and floods. Currently, the vast majority of homeowners insurance policies actually provide coverage for fire damage. But that doesn’t mean that things won’t get more expensive as time goes on and environmental change makes annual wildfires that much worse. Most earthquake and flood damage, however, is not covered by your homeowner’s insurance policy. You will have to purchase separate coverage for both earthquake and flood protection. Earthquake insurance can be found from a variety of different providers. But most homeowners can only get flood insurance from the National Flood Insurance Program

Some readers may be asking themselves: what happens if you live in a very high risk area, and conventional homeowners insurance is either too expensive, or unavailable? Well, you can turn to the California FAIR program in order to find insurance coverage. Keep in mind, however, that it will not be cheap. FAIR insurance is a last-resort option for only those homeowners who absolutely cannot get conventional insurance coverage anywhere else. So we strongly suggest you shop around and search for any and all possible better deals before you resort to this sort of high risk coverage. 

Insurance Demographics/Statistics in California

So far we’ve discussed average rates, legal requirements, and some of the biggest environmental perils that California homeowners face today. But what other factors are at play when it comes to your homeowners insurance premiums? As it turns out, there are several. And we’re going to break down those numbers for you right here in this statistical summary. 

  • Average home value – the median price for a California home is $578,267. That’s more than twice the national average. Obviously, this is going to make your homeowners insurance more expensive because you will have to purchase higher coverage limits in order to make sure you can adequately repair and/or replace any property damage that happens as a result of a peril. 
  • Crime rates – your average homeowner in California will experience an act of property crime 23.8 times per 1,000 residents, or a 1 in 42 chance of becoming a victim of this type of crime. Seeing as how the national average is 1 in 24, those are pretty good odds.
  • Average household income – the average California single-family household is bringing home $75,277 per year. This is actually $13,340 higher than the median US household income. Having more money in your pocket means it’ll be easier for you to pay off your annual premiums when they’re due. So that should be a relief for California homeowners. 
  • Education – the state of California can boast that 33% of the residents have either a bachelor’s degree or higher when it comes to advanced education. The national average is 32%, so California is ahead of the game on that statistic. What’s so special about having a higher education? Higher levels of education are associated with things like higher incomes, better credit scores, and lower crime rates. All of these things contribute to lower homeowners insurance premiums by and large. 

Where To Purchase Home Insurance in California

Where’s the best place to purchase home insurance in California? Right here on AgileRates.com with us, of course! Granted, you have other options. You can ask for help from friends and family, or you could call around on your own and find your own agent/broker in your area. But what works for your friends and family may not exactly work for you. And searching for your own agents could be as difficult and time-consuming as trying to find a needle in a haystack. We can offer you a quick, pleasant, and effective shopping experience for free and help you compare accurate quotes among providers in your area – helping you do all that work in a fraction of the time. Here’s a statistic you may not know about: only 44% of homeowners actually compare and shop around for a new homeowners insurance policy once their current one comes up for renewal. The industry is changing all the time, and the best way to make sure you’re getting the best deal for your money is to compare quotes early and often. Thanks to modern technology, the best way to get the best deal is to shop online – but only 17% of homeowners are doing it! Break the mold. Contact us today so that we can connect you with a friendly, helpful local agent and get you started on purchasing the homeowners insurance policy that’s perfect for you.

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