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California is home to one of the largest insurance markets in the world, but it can also be one of the most challenging states for homeowners searching for coverage. That’s because the state has faced historic losses in recent years due to wildfires.

In 2017, according to the California Department of Insurance, insurers received almost $12 billion in claims tied directly to wildfires that destroyed in excess of 32,000 homes. As a result many insurers are no longer offering policies in California, limiting options for consumers

Living in California, you’ll also want to ask about coverage for such natural disasters as earthquakes, landslides and mudslides. The challenges posed by the state’s wildlife history aside, the California Department of Insurance says it’s important to shop around for insurance just as you would for any other product, doing your homework and asking plenty of questions

Best home insurance companies in California

  • USAA
  • State Farm
  • Allstate
  • Farmers Insurance
  • CSAA
J.D. Power Rating A.M. Best Rating BBB Rating
USAA 5 out of 5 stars A++ B-
State Farm 4 out of 5 stars A++ A
Allstate 3 out of 5 stars A+ A+

USAA – USAA earned a perfect 5 out of 5 in J.D. Power’s Power Circle Ratings for overall satisfaction, making it one of the top ranked providers in the country that writes policies in California. In fact, USAA received a 5 out of 5 Power Circle Rating score for every category in the J.D. Power 2019 ranking – including policy offerings, price and claims.

State Farm – State Farm earned 4 out of 5 J.D. Power’s Power Circle Ratings in overall satisfaction and in several other categories as well, including policy offerings, billing and interaction. The company writes more policies in California than any other on our list, according to the Insurance Information Institute.

Allstate – Allstate ranks just a little behind State Farm on the J.D. Power list. The company received 3 out of 5 Power Circle Ratings in every single category.

Farmers Insurance – Like Allstate, Farmers received 3 out 5 Power Circle Ratings in every single J.D. Power category. Farmers has the second largest market share in California in terms of volume of policies written in the state, according to the Insurance Information Institute.

CSAA Insurance Group – CSAA ranked slightly behind Farmers, earning 3 out of 5 Power Circle Ratings from J.D. Power in nearly all categories, including overall satisfaction. However, the company earned 2 Power Circles in the interaction category. The company rounds out the top three when it comes to total market share of policies written in California.

Key items to look for when shopping homeowners insurance include

  • Coverage for the structure of your home
  • Personal belongings coverage
  • Liability protection
  • Coverage for living expenses

Methdology

The best companies were selected based on a variety of factors including receiving a minimum of three Power Circle Ratings from J.D. Power in overall satisfaction and being among the top 10 writers of insurance in California according to the Insurance Information Institute. Factors such as top rankings for overall policy offerings and price were also considered. Prices were researched by obtaining actual quotes from each provider listed.

Other types of insurance available from these providers

Each of these top ranked companies also offer a variety of other insurance products beyond home protection.

Some of the additional options from USAA include auto, motorcycle, motorhome, boat and classic car insurance. State Farm offers vehicle insurance, health insurance, life and disability insurance and more.

Allstate is another full-service provider offering such products as boat insurance, motorhome insurance, business insurance, flood insurance, supplemental health insurance and landlord property insurance.

The options from Farmers and CSAA include auto, home, life and more.

Average cost of homeowners insurance in California

California homeowners pay about $1,000 annually for home insurance premiums, according to the Insurance Information Institute. But the price varies by provider. We comparison shopped using the fictitious profile of a homeowner in the Carlsbad area of San Diego who was seeking $550,000 worth of coverage for a newly built home. Here’s how the rates compared.

  • USAA – $1,228 annual premium with $1,000 deductible.
  • State Farm – $927 annual premium with $1,000 deductible.
  • Allstate – $1,004 annual premium with $1,000 deductible
  • Farmers Insurance – $1,516 annual premium with $1,000 deductible
  • CSAA Insurance Group* – $785 annual premium with $1,000 deductible.
    *referred to as AAA Interinsurance Exchange

Types of Coverage Available in California

There are various types of insurance coverages available in California ranging from dwelling coverage to loss of use coverage. Here are the options and key information to understand about each.

Types of Coverage More Information
Dwelling Coverage Dwelling coverage is exactly what it sounds like. It is major property coverage that protects your home when it’s damaged by a covered incident.
Other Structures As its name indicates, this coverage is focused on other structures that may be on your property but are not attached to your home. Examples include garages and tool sheds.
Personal Property Personal property coverage addresses your personal belongings.
In other words, the items within your home and other personal items that
belong to members of the family who live in the home.
Loss of Use Loss of use coverage is designed to address any living expenses you may incur if the event your home is damaged and you cannot remain there.
Personal Liability If you or any resident of your household is held legally responsible for damage to others, personal liability coverage would apply. Such coverage typically provides a defense and pays damages when appropriate.
Medical
Payments Coverage
This coverage pertains to those accidentally injured on your property, potentially paying for medical expenses when such an accident occurs.

Coverage California residents should look for from providers

In a state prone to wildfires, mudslides and earthquakes, it’s important to ask providers specific questions about what your policy does and does not include.

For instance, even though California is prone to earthquakes, companies do not typically include coverage for such incidents, according to the California Department of Insurance. However, insurers are legally obligated to offer such coverage for an additional premium. The coverage may be written directly by your insurance provider or by another provider.

Common causes of home insurance losses in California

Some of the risks most pertinent in California include wildfires, earthquakes and mudslides, with wildfires being among the most pressing in recent years. The 10 costliest wildfires to occur in the United States all took place in California,according to the Insurance Information Institute.

In 2017, eight counties located in Northern California were impacted by wildfires, which caused 23 deaths, and burned more than 8,700 structures. The same year, Southern California was also impacted by five major fires that destroyed more than 1,000 homes and buildings.

Frequently asked questions

What is the cheapest homeowners insurance in California?

According to the 2019 homeowners insurance comparison tool Topa Insurance Company provides some of the least expensive premiums, offering a policy for just $360. That price quote was provided for a new home in the Carlsbad area of San Diego, where the homeowner was seeking $550,000 in coverage. Mercury Insurance Group came in close behind Topa, offering a policy with an annual premium of $550. Both policies have a $1,000 deductible.

How do I get homeowners insurance in California?

The California Department of Insurance recommends contacting agents and brokers located near your home. You can also try using the department’s Residential Insurance Company Contact List.

What is the California FAIR Plan?

Due to the threat of wildfires in California, many companies have stopped offering coverage in the state. The FAIR Plan provides last resort insurance coverage to homeowners who are unable to obtain coverage. A Los Angeles-based association, the FAIR Plan is made up of insurers who are authorized to offer basic property insurance in California.