California is the most populous state, with nearly 40 million people. The warm weather and sunny beaches draw new residents to the state each year, but how many people purchase a home? The short answer is—not many.
The Golden State is known for its high property values and cost of living. As of 2018, the median property value in California was $546,800, roughly 2.38 times higher than the U.S. average of $229,700.
The same data shows that only about 54.8% of California residents own a home—a lower rate than the U.S. average of 63.9%. Even with a lower homeownership rate, more than 2.1 million residents still need homeowners insurance.
The California home insurance market is the largest in the country, with over 50 providers competing for customers. As a result, the average rate for homeowners insurance is pretty low, despite an otherwise expensive housing market — the average annual premium in California is $1,008, which is around $200 cheaper than the national average rate of $1,211.
California’s enormous size and varying climates, however, create sizable differences in coverage costs among Golden State cities. And earthquakes and floods, two of California’s most common natural disasters, are not covered under standard homeowners insurance policies. And the consistent threat of wildfires are making it more difficult for homeowners to find affordable insurance.
It’s crucial to do your research to make sure you get adequate coverage for the best price possible.
A great place to start is the California Department of Insurance website, which offers consumer education resources and tools. To further aid in your search, we’ve outlined our top picks for California homeowners insurance and provided a quote tool to compare policies in your region:
State Farm
State Farm is a solid option for home insurance coverage in California because it offers policies for nearly every type of home and living situation, which is ideal for such a diverse state. State Farm’s claims management network is one of the largest in the world; claims can be made online or via phone 24/7 with prompt response times and user-friendly servers.
State Farm policyholders have a wide array of discount options available to them, including those for simple safety-item installations like fire sprinklers. State Farm also has tools such as the Home Inventory calculator, which allows you to build an online inventory of your covered personal property and its value so you can purchase adequate coverage and reduce or eliminate loss in the event of a disaster.
Policyholders can also take advantage of State Farm’s Premier Service Program, which puts you in touch with reputable contractors in your area after a covered loss.
Mercury
Mercury Insurance was founded in California, and they pride themselves on being able to assess the specific and unique needs of the state’s residents. Their standard policy guards against weather damages, natural disasters, and theft, but Mercury allows you to craft a custom insurance plan that provides coverage where you need it most.
Mercury has local offices and agents throughout California, so speaking to a professional in your area about your plan is simple. The company offers competitive pricing on homeowners insurance policy premiums and has numerous discount options available, including protective devices discounts, multi-policy discounts, and discounts for selecting a higher deductible.
Mercury’s claims department is available via phone 24/7 and offers hassle-free reporting. However, unlike some of their competitors, they do not offer the ability to file a claim online or through a mobile app.
Travelers
Travelers has been providing service for over a hundred years, so they know a thing or two about insurance. Their homeowners insurance policy is comprehensive, with a lot of add-on options and an array of discounts available, ensuring a policy that you’re happy with at a price that is reasonable.
California residents can take advantage of their add-on earthquake, flood, and landslide coverage, which is not available from every provider and is incredibly valuable if you live in a high-risk area. Residents can also take steps to get their home certified ‘green’ and receive a 5% discount on homeowners’ insurance — in addition to reduced energy bills.
Travelers has an easy-to-use online claims center that simplifies the process to a few steps, as well as day and night phone support in case you need extra assistance. Their website provides excellent additional educational resources and tools as well to help consumers learn more about their policy options and tips for safeguarding their homes.
Nationwide
With an A+ financial Strength rating from AM Best, Nationwide is a name you can trust with your insurance policy. While you can’t get a quote from Nationwide online, contacting an agent is a seamless process thanks to their breadth and popularity in the California insurance market.
Nationwide’s homeowners insurance policy provides protection against damage caused by most natural disasters and theft, with options for additional coverage for earthquakes, floods and landslides. Nationwide also has unique add-on options, such as Brand-New Belongings coverage which repairs or replaces the cash value of any personal items damaged, and Valuables Plus, which provides additional coverage for any high-value items you may own and wish to protect.
Once you sign up with Nationwide, you get a free “On Your Side” review and consultation that teaches you how to manage your deductible, file a claim and choose the right policy to meet your budget and needs.
Most expensive cities in California for home insurance
In California, the average annual homeowners insurance premium is about $1,008, or $84 per month. However, insurance rates vary significantly by city. Even homeowners in the same region, such as the Bay Area, will pay different rates based on their zip code. Similarly, homes that are located along the coast are more expensive to insure than homes located inland. Based on our research, these are the most and least expensive cities for home insurance in California:
Most expensive cities in California
- Beverly Hills
- Moreno Valley
- Los Angeles
Least expensive cities in California
- Death Valley
- Oceano
- Oxnard
Hazards that California homeowners should have insurance for
California’s climate is different in every region. Lake Tahoe can get as much as 18 feet of snow in the winter, but the temperature can hit 100 degrees, with very little rain, during the summer in Los Angeles. Additionally, earthquakes, wildfires and floods can happen anywhere in the state.
California homeowners need to have the right insurance coverage to protect their home and belongings from damage. All standard home insurance policies cover damage from fire, snow, ice, heavy winds and rain. However, earthquake and flood damage is not covered.
For adequate coverage, California homeowners should strongly consider purchasing both earthquake insurance and flood insurance. If you have a mortgage, these policies might be required by your lender. You can purchase these policies through most private insurance companies for an added fee.
Best California Homeowners Insurance Companies
- State Farm
- Mercury
- Travelers
- Nationwide
When thinking through coverage types you’d like to have it’d be good to evaluate the climate and meteorological trends of your state. With those factors in mind you might want to consider hazard insurance and flood insurance
For a complete guide to insuring your home, read our Guide to Home Insurance and check out the Best Home Insurance companies nationwide.
