The Best Los Angeles Home Insurance Companies 2021

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The high cost of Los Angeles real estate makes homeownership out of reach for many people. In fact, fewer than 40% of Los Angelenos own their home, according to the Insurance Information Institute. In 2018, California suffered more than $1.5 billion in losses due to fires, according to the National Association of Insurance Commissioners. Such catastrophic losses have sent homeowners insurance rates through the roof for many Los Angeles homeowners.

Best home insurance companies in Los Angeles

We collected information on some of the best Los Angeles homeowners insurance options by looking at customer satisfaction, options, costs, and J.D. Power’s annual survey of the home insurance market.

  • Allstate: Allstate has several coverage options you can add to your plan and lots of discounts to help you save money on your premiums.
  • Amica Mutual: Amica got a 5 out of 5 rating from J.D. Power’s survey, and the company offers coverage options for more protection so you can customize your coverage with the things that are most important to you.
  • Automobile Club of Southern California Insurance Group (an American Automobile Association company): The AAA offers helpful advantages like 24/7 roadside assistance, discounts and free identify theft protection along with your membership.
  • State Farm: State Farm has well-rounded coverage and several discounts that people can use to save money on premiums.

Price is just one factor to consider when searching for homeowners insurance. A company’s financial strength is a particularly important factor when insuring a Los Angeles home because it is an indicator of the company’s ability to pay claims. When shopping for home insurance, always check a company’s AM Best financial rating and Better Business Bureau rating.

Company J.D. Power Ranking A.M. Best Rating BBB rating
Amica 5 out of 5 stars A+ (Superior) A+
USAA 5 out of 5 stars* A++ (Superior) B-
Auto Club 3 out of 5 stars Not rated A+
State Farm 3 out of 5 stars A++ (Superior) A
Allstate 3 out of 5 stars A+ (Superior) A+

*USAA is profiled but isn’t eligible for rankings because it doesn’t meet award criteria from J.D. Power.

What affects my homeowners insurance rates?

The cost of insurance plays a major role in determining whether to buy a home in Los Angeles. Insurance rates can vary widely, even in neighboring zip codes, often due to wildfire or earthquake risks. When shopping for insurance, follow a few guidelines established by the III. Factors that play a role in your Los Angeles homeowners insurance rate include:

  • Proximity to the nearest fire department:Fast emergency services response can mean the difference between minimal damage and total loss if your home catches fire. Homes within five miles of a fire station usually get better home insurance rates.
  • Proximity to a coastline: While California typically does not experience hurricanes, coastal homes can cost more to insure due to the risk of sea and storm damage.
  • Age of the house: Older homes with details such as plaster walls and custom trim cost more to insure because they require the work of specialists to repair.
  • Roof condition: An old roof can increase the cost of homeowners insurance. For the best rate, look for a home with a newer roof with fire resistant materials.
  • Construction quality: Homes that do not meet current building code cost more to insure because they can incur higher repair costs.
  • Flood risk: Most dwelling policies do not cover flood damage, and some insurance companies will not insure homes in flood zones.
  • Earthquake risk: All Los Angeles homes run the risk of earthquake damage. However, homes built on bedrock often get better homeowners insurance rates.
  • Special features: Special features such as imported tile, swimming pools or hot tubs make a home more luxurious, but they can also drive up your home insurance rate.
  • Loss history: When insurance companies pay a claim on a home, they file a report with the Comprehensive Loss Underwriting Exchange, administered by LexisNexis. Houses with a history of claims often incur higher insurance rates. Only insurers and homeowners can request CLUE loss reports, so ask the seller to request one for you before you buy a home.

Most states allow insurance companies to rate insurance premiums based on the policyholder’s credit score. But thanks to the passage of Proposition 103, insurance providers cannot use your credit score when determining your premium.

Average homeowners insurance cost in Los Angeles

According to The Zebra, an organization that studies the insurance market, Los Angeles homeowners who carry $200,000 worth of dwelling coverage on their homes pay an average annual premium of $764, while homeowners who purchase $400,000 in coverage pay $1,423.

However, some areas of Los Angeles pay much higher average annual premiums due to high crime rates, fire risk or proximity to fire departments. For example, homeowners in Torrance pay around $837 per year, while West Hollywood residents pay $1,216, based on the same home criteria used to establish The Zebra’s average premium rate.

Most affordable insurance companies in Los Angeles

According to an August 2019 The Zebra report, Los Angeles homeowners insurance companies offering the most affordable rates include:

Company Average Annual Premium
Mercury Insurance $625
Allstate $678
USAA $801
Nationwide $855
AAA $876

Bankrate requested quotes from three of J.D. Powers’ top picks and found a wide range of insurance rates. Using the following criteria, here are the quotes we received:

  • Property value: $700,000
  • Home built: 1953
  • Location: Tarzana, California
  • Coverage: $500,000 dwelling insurance, no discounts
  • Deductible: $1,000
Company Annual Premium Rate
Amica $2,465
Auto Club $1,518
State Farm $1,733

Tips to reduce your cost

If you already own a Los Angeles home, you can take a few steps to decrease your insurance costs, such as:

  • Replace your roof with fire resistant materials.
  • Retrofit your older home to meet earthquake code.
  • Replace old wiring and plumbing to bring it up to current building code.
  • Install a home security system that includes fire, smoke and carbon monoxide alarms.
  • Ask your insurance agent if you qualify for discount programs.

Home insurance coverage options in Los Angeles

Typically, homeowners choose several types of coverages to protect their home and its contents. Homeowners coverages can include:

  • Dwelling insurance: This covers damage to your home and attached structures such as a garage.
  • Flood insurance: This option pays for damage to your home caused by flooding. Typically, dwelling insurance does not cover flood damage.
  • Earthquake insurance: This type of insurance overs damage to your home caused by an earthquake. Most dwelling policies do not cover earthquake damage.
  • Drain or sewer backup insurance: This option pays for damage to your home caused by a drain or sewer backup.
  • Loss of use insurance: This insurance helps pay your living expenses if a covered calamity, such as storm damage, renders your home uninhabitable.
  • Personal property insurance: Personal property insurance covers the contents of your home, including clothing, electronics and furniture.
  • Other structures insurance: This type protects unattached structures such as tool sheds or fences.
  • Personal liability insurance: This coverage helps pay attorney’s fees or settlement awards if a court finds you liable for damage or bodily injuries that occur on your property.
  • Medical payments insurance: This covers the medical expenses of people outside your household if they sustain an injury on your property.
  • Personal umbrella insurance: Umbrella insurance helps pay for medical expenses or property damage that exceed the limits of your personal liability and medical payments policies.

Common causes of home insurance losses in Los Angeles

In recent years, a rash of fires has caused the price of Los Angeles homeowners insurance to skyrocket. In 2017, major insurance companies wrote $7.8 billion worth of California homeowners policies but suffered a 201.17% loss rate, according to the California Department of Insurance. In 2018, companies wrote $8.3 billion worth of policies and had a 170.08% loss rate.

After suffering such disastrous financial losses, insurance companies have drastically increased rates for some homeowners and dropped coverage for others. According to an August 2019 report in The Los Angeles Times, some California homeowners have incurred home insurance rate increases of over 420%. According to a CDI report, 10% of homeowners in affected areas received non-renewal notices from their insurance companies between 2015 and 2017.

Qualified Los Angeles homeowners who cannot find a private insurance company willing to cover their houses can purchase home insurance through the California FAIR Plan. The FAIR program offers fire insurance policies that cover damage caused by fire, internal explosions, lightning and smoke.

Los Angeles homes also face the risk of earthquakes. According to the California Earthquake Authority, the Golden State has more than 500 active faults. Based on III statistics, the 2010 Baja California earthquake caused $100 million in losses. To help protect California homeowners, CEA offers dwelling home insurance that covers earthquake damage.

Frequently asked questions

What is the cheapest homeowners insurance in Los Angeles?

According to The Zebra, Mercury Insurance customers pay an average of $625 per year for $200,000 in dwelling coverage, the lowest rate in Los Angeles. However, insurance rates can vary widely according to location and other factors. It pays to get several quotes when shopping for homeowners insurance.

How do I get homeowners insurance in Los Angeles?

Many major homeowners insurance companies write policies for Los Angeles properties. You can also purchase home insurance through the California Earthquake Authority.

Can insurance companies raise my Los Angeles homeowners insurance rate following a natural disaster?

Yes. Due to recent fires, insurance companies have imposed substantial rate increases on policyholders in affected areas.

Does dwelling insurance cover earthquake damage?

Most dwelling policies do not pay for earthquake damage. However, many insurance companies offer separate earthquake policies, and the California Earthquake Authority sells dwelling insurance policies that cover earthquake losses.