California homeowners insurance: A complete guide

Is home insurance required in California?

Homeowners insurance isn’t a legal requirement in California, but your mortgage provider might mandate that you get a certain amount of home insurance. Otherwise, there could be a risk that your home suffers significant damage to the point where you’re unable to pay for repairs and don’t pay your mortgage, leaving the lender eating the loss.

So, even if the state does not require it, you may still need to get California homeowners insurance. Plus, you might be better off getting coverage to protect yourself financially from losses due to issues like wildfires, as well as other common perils that homeowners insurance typically covers, like theft and personal liability due to someone getting injured on your property.

What does home insurance cover in California?

California homeowners insurance coverage can vary based on the insurer and the policy you select, but there are some common inclusions.

“The majority of California property owners can expect their homeowners’ insurance to cover the following,” explains Todd Greenbaum, president and CEO at Input 1, an insurance billing and payments software provider:

• “Interior or exterior damage to the dwelling and, sometimes, other outdoor structures such as a pool, gazebo, patio, etc.
• Loss of, or damage to personal property, such as furniture, appliances, electronics and clothing
• Injury that occurs while on the property
• Damage from fire/smoke (including wildfires), theft or vandalism
• Damage from weather such as wind, hail and lightning
• Other damages from external events, such as a tree falling on the dwelling.” 

Keep in mind, however, that these are not necessarily all of what’s included in a California homeowners insurance policy, or it’s possible that certain policies have more exclusions. Note that some perils are generally always excluded, such as earthquakes. Instead, California homeowners might separately purchase earthquake insurance.

Floods are also typically excluded, explains Evan Walker, owner at The Law Office of Evan W. Walker. “There may also be sub-limits on covered personal property like jewelry (e.g., even if $10,000 of jewelry is stolen, the sub-limits may limit payment to $500). Common exclusions under personal liability coverage include certain breeds of dogs and liability arising from your autos or your work,” he adds.

How much is homeowners insurance in California?

The average cost of homeowners insurance in California is $1,399 per year. This rate is based on a home with a $300,000 dwelling coverage limit, a $1,000 dwelling coverage deductible, and a $300,000 liability limit.

That’s almost half the national average, though some parts of California are more expensive than others to insure, especially if you add in additional insurance, such as earthquake coverage. Getting quotes can help you get a better sense of home insurance rates based on factors like your location and coverage limits.

Overall, California homeowners insurance may be less than the average across the nation, but there are still many nuances to consider. And with several major carriers leaving, along with growing risks due to factors like climate change, costs could go up further.

“Because California is such a large state, location matters more than you think. Carriers are staying away from more rural areas due to wildfire risk, and locations near water are more expensive and harder to insure. For these reasons, deductibles can vary and may leave customers exposed,” says Greenbaum.

“There may also be limits on coverage due to the current economic and climate circumstances. Loss due to wildfire can have a high deductible or be excluded entirely while the increased cost of materials and labor could increase replacement costs above coverage limits should there be a total loss,” he adds.

As such, California homeowners should closely review their limits and other policy details. And if you’re looking for a new policy, be sure to compare home insurance companies and see where you can find the best coverage amidst these challenges.

How much is homeowners insurance in California per month?

Based on the annual average cost of homeowners insurance in California, the monthly cost is $115. But home insurance rates in California can change significantly based on factors like dwelling coverage and liability limits.

A $200,000 dwelling/$100,000 liability limit works out to around $105 per month when dividing the annual cost by 12, while a policy with a $500,000 dwelling/$100,000 liability limit costs a little over $191 per month on average. If you bumped those limits up even higher to $600,000 for dwelling and $300,000 for liability, that works out to almost $225 per month.

Best homeowners insurance companies in California

While you might think that the most populous state in the U.S. has plenty of options when it comes to homeowners insurance, several major insurers like State Farm have stopped offering new home insurance policies in California or at least pulled back somewhat. Still, several great insurers remain. Some of the top home insurance companies in California include:

• Auto Club Enterprises (AAA)
• CSAA Insurance (AAA)
• Mercury Insurance
• Travelers
• USAA

These homeowners insurance companies in California often offer competitive rates, but you should compare carriers to see where you can get the best home insurance rates for your specific home.

Cheapest home insurance in California

The cheapest home insurance provider in California varies based on the policy details.

Allstate did have the cheapest rates generally but stopped issuing new homeowners insurance policies in California in 2023. Now, the cheapest home insurance provider in California for a home with a $200,000 coverage limit is Auto Club Enterprises (AAA) at an average cost of $787 per year. For higher limits, Travelers or USAA are often cheaper.

California homeowners insurance laws

California does not require home insurance by law, but there are still some laws to keep in mind assuming you still do get a policy.

For example, “be aware of the Fair Claims Settlement Act, which is found in the California Code of Regulations,” says Walker.

This Act includes various regulations that can help homeowners when it comes to getting claims handled, such as not allowing insurers to require property repairs be done by a specific person or entity. Altogether, these regulations aim “to promote the good faith, prompt, efficient and equitable settlement of claims on a cost effective basis,” the Act states.

California home insurance laws also come into play in terms of pricing.

“There are limits on how much an insurance carrier can charge for premiums, but the limits are not well-defined. This is one reason that more carriers are leaving the state, making insurance both harder to get and more expensive,” says Greenbaum.

There are also limits as to when and why an insurance company can cancel your home insurance coverage:

• Within the first 60 days that the policy is in force, it can be canceled for any reason
• After 60 days, policies can only be canceled or nonrenewed for specific reasons allowed by law
• The home insurance company must provide at least 20 days' notice for policy cancellation, 10 days if the cancellation is for nonpayment
• The home insurance company must provide at least 75 days' notice for a nonrenewal
• All notices of cancellation and nonrenewal must provide the reason

Is there a grace period for homeowners insurance in California?

Whether or not a grace period will be extended for nonpayment of your homeowners insurance premium is generally up to the home insurance company. California law does require 10 days notice for a cancellation due to nonpayment; in most cases, if you pay within those 10 days, the company is likely to continue your coverage. It's always best to pay your home insurance premium on time to avoid a lapse.

How to get home insurance in California

Buying home insurance in California is a straightforward process, but it does require an awareness of your needs and a few steps.

1. Determine your coverage limits. Consider how much the replacement cost of your home is as well as how much you need for personal property and liability coverage. You should also consider the need for earthquake coverage, which is available as an endorsement from many home insurance companies.
2. Request quotes. Get quotes from as many companies as you can; at least three to five is a good comparison. Make sure you're comparing apples to apples in terms of home insurance coverage and consider any extras each policy might include.
3. Research the companies. Check on the reputation of the companies you are considering, using resources like J.D. Power, AM Best, and our best home insurance companies ranking.
4. Buy your policy. Once you've made a choice, pay the premium to begin coverage.

Remember that flood coverage is not part of a homeowners policy, so you will need to shop for that separately.

Frequently asked questions: California homeowners insurance

Does homeowners insurance cover wildfires in California?

Yes, most California home insurance policies cover wildfires. However, it’s a good idea to check with your insurance company and read your policy documents to confirm wildfires are covered, as insurance can differ depending on location.

Home insurance will pay for the cost of repairing or rebuilding your home after a wildfire, as well as replacing damaged personal items. If your home is uninhabitable after a wildfire, your additional living expenses coverage will cover costs like a hotel, parking, laundry and restaurant meals until you can safely move back in.

When is fire season in California?

Fire season in California runs from late spring, usually May or early June, to fall, ending around October or November.

Is flood insurance required in California

Most California homeowners are not required to carry flood insurance. However, flood insurance can be beneficial, especially if you live along the coast or in a flood zone.

Standard home insurance policies do not cover floods or flood damage, even when caused by a natural disaster. If you want flood protection, you can purchase flood insurance through the National Flood Insurance Program (NFIP) or a private flood insurance carrier.

Do I need earthquake insurance in California?

Most California homeowners should consider investing in an earthquake insurance policy. Standard home insurance policies exclude earthquake coverage, meaning your home is at risk unless you purchase a separate earthquake insurance policy. If you don’t have earthquake insurance and your home is severely damaged in an earthquake, you would be responsible for the cost of repairs out-of-pocket.

By law, your homeowners insurance company must offer you earthquake insurance, but you can refuse coverage. The cost of earthquake insurance depends on various factors, like whether your home meets the latest earthquake codes, the proximity to a fault line and the cost of rebuilding the house. Your home insurance company can provide a quote if you want to add this coverage to your policy.

What if I can't get homeowners insurance in California??

California residents who cannot find homeowners insurance might be able to get coverage through the California FAIR Plan, which is a state-run program. This is usually an option for homeowners in high-risk wildfire areas.

The FAIR Plan offers basic fire insurance, with dwelling and personal property coverage. Only a few perils are covered, including fire and lightning, smoke, and internal explosions. However, you can add optional coverages for a fee.

Because FAIR Plan coverage is less comprehensive, you should only consider it if you absolutely cannot get approved for a private homeowners insurance policy. If you need theft or liability coverage, consider purchasing a "differences in conditions" policy that will cover these gaps. You can find a list of providers of such coverage on the CDI website.

Where do I get help with a claim or file a complaint?

If you end up in a dispute with your insurer, consider contacting the California Department of Insurance. You can file a complaint by dialing 800-927-4357.

Or, you can file a complaint online. When doing so, you can upload supporting documents, such as:

• A copy of your insurance card, both front and back
• Any relevant correspondence between you and the insurer
• A copy of a completed authorization and designation of agent form

Helpful home insurance tools and calculators

• Home insurance calculator
• Condo insurance calculator
• Renters insurance calculator
• When to file a home insurance claim