4 tips for shopping for home insurance in California
When looking at how much each home insurance company charges for different coverage levels and risks, you should also be aware of what your policy does and doesn’t cover.
Before you buy homeowners insurance in California, you should be sure you're protected against the state's severe weather and flooding.
Consider buying guaranteed replacement cost coverage
You should be sure that your home is fully protected from wildfires in California. While most home insurance policies do cover wildfires, you should make sure that you'll be able to fully rebuild your home by adding guaranteed replacement cost coverage to your policy, which pays to rebuild your home no matter how much it costs.
Guaranteed replacement cost is an optional coverage add-on that pays the full replacement for your house after a disaster, even if the cost of repairs exceed your policy limits.
Learn more >> What is guaranteed replacement cost coverage?
Consider buying flood insurance
While California might not be the first place you think of when you imagine a catastrophic flood, flooding is becoming more common in the state and homeowners insurance doesn’t cover flooding.
If you live in a FEMA-designated high-risk flood zone, you may need to purchase a separate flood insurance policy. Most insurers offer flood insurance through the National Flood Insurance Program. As of 2022, the average annual cost of NFIP flood insurance in California is $901.
Learn more >> How much is flood insurance in California?
Look into wildfire insurance
In addition to mudslides, severe flooding, earthquakes, and monsoons, California also experiences many wildfires. California ranks No. 1 on our list of the states with the most properties at risk of wildfire damage, according to Verisk Analytics.
If you live in a wildfire-prone region of California, be sure you have enough dwelling coverage to fully replace your home in the event of a disaster and consider adding extended replacement or guaranteed replacement cost coverage to your policy.
Learn more >> What is wildfire insurance & how much do I need?
Look into earthquake insurance
Earthquakes have always been a concern for California homeowners, with FEMA estimating an average of $9.6 billion in damages each year. Unfortunately for California residents, earthquakes are excluded from standard homeowners insurance coverage. This means you’ll need to purchase additional earthquake coverage if you don’t want to pay for these damages out of pocket.
While the probability of a severe earthquake impacting your house may be fairly low, earthquake insurance may be worth it if you live within close proximity to an active fault or if your house is made of materials that make it more at risk of collapsing during a quake.
Learn more >> Is earthquake insurance worth it?
How to buy homeowners insurance in California
The cost of home insurance in California is above the national average, so comparing quotes from multiple companies is an excellent way to make sure you are getting the best coverage at the lowest possible rate.
Here are a few steps to follow as you shop for homeowners insurance in California:
1. Reach out to a licensed Policygenius insurance agent.
Our team of licensed insurance experts can help you figure out how much coverage you need and what company offers it at the best price. Our agents do this for free with no impact to your credit score.
2. Ask about the specific concerns you have.
Every situation is different, so you need to have an insurance policy that specifically addresses your unique needs. For example, if you have a swimming pool or certain dog breeds deemed “dangerous,” make sure to mention these things to your agent so they can help you find the right coverage for your needs.
3. If you’re unable to find homeowners insurance on the private market, ask about E&S insurers.
Excess and surplus insurance is designed for homes that are considered too high risk to insure on the standard market. This coverage tends to be more expensive than standard homeowners insurance and isn’t backed by the state, which means the company isn’t obligated to comply with California insurance regulations. This can be risky, but there are some situations where E&S insurance coverage may be your best option.
4. If you’re still struggling to find coverage, ask about your state’s FAIR Plan.
The California FAIR Plan is designed to be a last-resort coverage option for homeowners who are not able to secure insurance on the private market. The California FAIR Plan does not compete on the private market and homeowners must have two denials from other insurance companies to qualify for coverage.
5. Figure out how high of a deductible you can afford.
You’ll want to set your deductible to an amount you can afford to pay out of pocket in the event you need to file a claim.
6. Compare quotes from a Policygenius agent.
Once you’ve nailed down your coverage needs, limits, and deductibles, a Policygenius agent can walk you through your quotes to help you find the best policy for your coverage and budget needs.
7. Choose your policy, sign it, and pay your first premium.
After you’ve chosen the policy you want, your Policygenius agent will complete all of the paperwork for you, including canceling your old policy, if you had one. The only thing left to do is sign your policy and pay your first premium.
Why is it so hard to get homeowners insurance in California?
One of the biggest factors in rising insurance costs in California and reduced availability of homeowners insurance is climate change. California has seen an increase in the severity of floods, wildfires, and other natural disasters over the years, which is causing insurance costs to go up and availability to go down.
Inflation is also causing an increase in home insurance costs. The cost of labor and supplies to repair or replace a damaged home has gone up significantly over the last few years, which means insurers are more cautious about taking on new customers and in turn are charging higher rates.
Learn more >> California’s home insurance crisis — explained
