Best homeowners insurance in California for 2023

Compare the best homeowners insurance companies in California

Our research revealed that the five carriers below are among the best California homeowners insurance companies. On our list, USAA and Chubb earned the highest Bankrate Scores, which may make them particularly worthy of consideration if you’re looking for carriers with strong third-party ratings. In our quest to find the best California homeowners insurance, we reviewed average rates, financial strength scores from AM Best and customer satisfaction ratings from the J.D. Power 2023 U.S. Home Insurance Study, coverage offerings, discounts, digital tools and more.

If you’re shopping for the best homeowners insurance in California, you may want to consider these companies:

The top 5 home insurance companies in California

Additional California home insurance companies to consider

AAA

Mercury

How Bankrate chose the best home insurance companies in California

California residents have multiple insurers to choose from, several of which offer more affordable premiums for homeowners insurance than the state average. To help you find the best home insurance company for you, we calculated a Bankrate Score to analyze each company across several categories. The rating sections include average annual premiums from Quadrant Information Services, available coverage, discounts and policy features. We also reviewed J.D. Power customer satisfaction ratings to indicate how satisfied customers are with their company’s service and AM Best ratings to assess financial stability. The higher a company ranked in each category, the higher its overall Bankrate Score — 5.0 being the highest possible.

Cheapest home insurance companies in California

Not every California homeowner will be able to secure a cheap policy, particularly those in a high-risk wildfire area. In fact, homeowners with homes at elevated risk for wildfire damage may struggle to secure any insurance policy, let alone a cheap one. That said, getting familiar with the cheapest home insurance companies in California can be a good starting point if you’re looking for coverage.

How Bankrate chose the cheapest home insurance companies in California

Bankrate sources our rate data from Quadrant Information Services. In order to find the best cheap home insurance in California, we started by reviewing the most up-to-date rates available. From there, we narrowed the search to include rates from the larger insurers in the state by market share. Given the volatility of the California home insurance market, we ensured that each provider on our list is still writing policies in the state.

How to get cheap California home insurance

Finding the right California home insurance for your needs is an important part of securing your financial health. Home insurance is designed to help shield your finances from the fallout of unexpected home damages and can help you keep your finances intact if you suffer a loss. To find the best homeowners insurance in California at a price that works for you, you may want to consider these steps:

1. Establish your needs. Determining how much home insurance you need could help you avoid over- or under-insuring your home. You may want to use an online tool to determine your home’s rebuilding value (each insurer will also use its own tool for this step) and you might also consider making a home inventory for your personal belongings.
2. Decide what factors matter most to you. Some shoppers may be looking for the cheapest rate, others may need specialty coverage and some might be set on having digital tools. Knowing what features of an insurer are important to you can help you find a company that meets those needs.
3. Search for companies. Once you know what you are looking for in an insurer, you can start to research companies to find several that might meet your needs.
4. Request quotes. Next, request quotes from the companies that you think might be a good fit. You’ll be able to review coverage offerings, discounts and average rates to determine which is going to ultimately be best for your coverage needs and budget.
5. Buy your policy. Once you have a quote that you’d like to proceed with, your agent or a representative from the company will help you buy your home insurance.

Best home insurance discounts in California

Home insurance discounts are an easy way to lower your premium. Most major insurers offer at least a few savings opportunities that might help you get a cheaper rate. Here are some common home insurance discounts in California:

How to save on home insurance policy renewals in California

For better or for worse, your insurance premium is not permanent. If you’re looking to lower your home insurance rate without going through the trouble of changing insurers, there are a couple of steps you can take to secure a more favorable rate:

• Fortify your home against wildfire damage. Wildfire damage is a key concern for most home insurance providers in California, and you could be rewarded with a discount if you take measures to protect your home from wildfire damage.
• Minimize claims. You may not need to file a claim every time your home is damaged. In fact, it may even be cheaper in the long term to avoid it. Many home insurance providers view customers who have filed a claim in the past as more likely to do so in the future, and may charge them higher rates. To avoid this surcharge, it may be cheaper to pay for damages out-of-pocket if they’re close to your deductible.
• Raise your deductible — if you can afford it. Opting for a high-deductible home insurance policy may help you get a lower rate. However, be cautious when doing so, and make sure that your deductible is still something you can realistically pay at a moment’s notice.
• Boost your home’s security. Shoring up your home’s security can do more than just give you added peace of mind, it may also result in added savings. Many insurance providers extend discounts to homeowners who take steps to further secure their homes. Depending on your insurer, this could be as simple as adding a deadbolt, or as involved as a whole-home alarm system.
• Peruse discounts. Home insurance policies typically renew annually, which leaves plenty of time to check for missed discounts. It may be worth setting aside some time with your insurance agent to see what discounts you potentially missed when you first signed up for your policy, and which ones you’ve only recently qualified for.

How much is home insurance in California?

The average cost of homeowners insurance in California for $250,000 in dwelling coverage is $1,225 per year. Although this is below the national average cost of homeowners insurance of $1,428 per year, the insurance premium for every home may be higher or lower than either of these averages depending on the home’s size, age and location, coverage options, and other individual rating factors. When looking for the best homeowners insurance in California, it’s helpful to consider how these factors could affect your final premium.

If you’re wondering why California’s home insurance rates are so low considering how risky the state is, it’s largely because of strict consumer protection laws. California state laws (Proposition 103, in particular) prohibit insurers from raising rates more than 7 percent without approval from the state’s Department of Insurance. As you can imagine, this clogs up the process and results in home insurance rates getting stuck at unsustainably low levels. 

While this may seem like good news for homeowners, it is actually one of the many factors that contributed to the market instability plaguing the state.

California homeowners insurance rates by city

When hearing that location can influence home insurance costs, many people’s minds jump to state-by-state cost considerations. While the state you live in plays a role in the cost of your insurance, so does your ZIP code. The interactive map below shows home insurance rates from across the state to help you compare.

*Rates are for $250,000 in dwelling coverage.

What does home insurance cover in California?

Before panic-buying every home insurance endorsement your insurer offers, it’s helpful to first understand which disasters are specifically covered in your policy. Once you have a better understanding of what’s covered by your home insurance policy, you can identify potential coverage gaps.

The most common type of home insurance policy is an HO-3. This type of home insurance provides dwelling coverage, other structures coverage and personal property coverage, in addition to liability, medical payments and additional living expenses. Your dwelling and other structures are typically insured on an “open peril” basis, meaning they are protected from everything except what is specifically excluded as outlined in your policy. Your personal property, however, is only protected from the losses, or “perils,” that are named in your policy.

A study from Mercury Insurance identified the most common insurance claims filed by California homeowners. We’ve listed them below by popularity and provided context on how they are already covered by a standard home insurance policy:

• Water damage: Water damage claims made up nearly 57 percent of California’s home insurance claims. Leaky appliances, burst pipes and other sudden and accidental water damage can all be covered by your home insurance policy. Notably, almost all home insurance policies do not cover flood damage.
• Wind: Home insurance can help when a gentle breeze turns not-so-gentle. High winds can damage your roof, siding and other areas of your home, but your home insurance policy could be able to help.
• Fire: Your dwelling and personal property are financially protected from fire damage, with some key exceptions. Intentionally set fires are not covered by home insurance, and if you live in a wildfire-prone area, your insurer could exclude wildfire damage from your policy.
• Theft: While it’s not a natural disaster, theft can be just as devastating on a personal level. Theft is a named peril on the vast majority of home insurance policies and can cover your dwelling, other structures and personal property up to your specified coverage limits.

Additional home insurance coverage types in California

In a state prone to wildfires, mudslides and earthquakes, asking insurance companies specific questions about what your policy does and does not include is important. For instance, even though California is prone to earthquakes, home insurance companies do not typically include coverage for such incidents. Due to common natural disasters, many insurance experts recommend these extra coverage types for California homeowners:

• Earthquake coverage: Due to its position along the San Andreas Fault, California is one of the most earthquake-prone states in the country. You can usually purchase California earthquake coverage as a separate policy, often sold by the California Earthquake Authority. A private insurance company may also sell earthquake policies.
• Flood insurance: California is considered a flood-prone state due to its valleys and coastal land areas. However, standard home insurance does not include damage caused by floods. Instead, you can buy flood insurance through the National Flood Insurance Program (NFIP) and some private flood insurers.
• Fire insurance: Although coverage for some fires is included in basic homeowners insurance policies, Californians are at an increased risk because of the high probability of wildfires. If you live in an area where finding home insurance coverage is difficult because of the involved risk, you may consider purchasing a separate policy like the FAIR Plan. California FAIR Plan (CFP) recommends only getting coverage through its association as a last resort, but it could offer fire insurance for your home.
• Scheduled personal property: If you own high-value items, like artwork or jewelry, these may not be fully covered by the personal property coverage on your homeowners policy. Some solutions can be to increase your personal property coverage limits or purchase a scheduled personal property endorsement as additional coverage. Because each insurance company may have different guidelines in how it approaches expensive belongings, it can help to speak to an insurance agent to see what the best solution is for you.

Common California home insurance problems

California has something to offer for all kinds of homeowners with its buzzing cities, hundreds of miles of coastline, sky-grazing mountain ranges, mild winters and otherworldly desertscapes. While California’s cultural cachet and natural beauty make it a desirable place for many to put down roots, finding the right home insurance policy can be a challenge. Here are a few hurdles homeowners may encounter:

• Dwindling coverage options: In the past year, three of California’s largest home insurance providers by market share, State Farm, Allstate and Farmers have either stopped accepting new home insurance policies. Together, these three insurers wrote nearly 22 percent of all home insurance policies in California, and their departure from the state signals an unstable insurance landscape.
• Difficulties finding a policy: Wildfires are among the most devastating and expensive home insurance claims. In 2022, the National Interagency Coordination Center estimated that California wildfires did $380 million in damage. With that in mind, USAA has tightened its wildfire safety standards to only write policies for homes below a certain risk threshold. While it’s unclear how the new guidelines will affect current policyholders, it certainly doesn’t make it easier for new homeowners to get coverage.
• Strained FAIR plan: The FAIR plan is supported by California’s private home insurers, and if too many homes are on the plan, it could take just one bad wildfire season to wreak havoc. The potential payout required from private insurers in the event of widespread wildfire losses could put them at risk for financial solvency and incentivize them to limit the number of new home insurance policies.
• Natural disasters: California’s natural beauty comes at a steep price. While there’s plenty to enjoy about the great outdoors here, earthquakes, landslides, floods and wildfires pose major threats to homeowners across the state. When shopping for homeowners insurance, California property owners will likely need to consider endorsements or additional policies to be financially protected from Mother Nature’s wrath.

Frequently asked questions