In California, home insurance is not a requirement, but the average monthly rate is $84. In this California home insurance guide, find out what California home insurance covers and which companies provide the best coverage. Home prices rise in the most popular parts of California because of the endless summers and miles of beaches. Insurance can help one protect that investment.

It can be confusing buying California homeowners insurance. Every agent promises something different; each policy has its exclusions, and to top it off, comparing prices across insurance websites is time-consuming. Is it even necessary to have California homeowners insurance? Does the policy have to provide enough coverage? How much does California home insurance cost?

How To Get A Quote & Coverage?

Homeownership is a large investment that needs to be protected. One needs to find an insurance company that fits their needs as a homeowner.

Sara Routhier, Director of Outreach at ExpertInsuranceReviews.com, suggests these five things are covered when one is buying home insurance for their single-family home in California:

• This type of insurance covers the physical structure of the dwelling.
• Damage or loss to any attached structure, such as a shed or guest house, would be covered here.
• Personal property refers to furniture, jewelry, and appliances within the home.
• Liability policy covers any third party injured on property.

An additional living expense policy covers temporary living expenses in case the home becomes unlivable.These coverage options should remain the same regardless of one’s chosen insurance carrier, policy, and location. Insurance provider may provide further details about additional coverage options.It is common for California home insurance rates to rise, as the location is a major factor in the cost of coverage. Below are mentioned some policies offered and sample monthly rates so one knows what they can afford for their California home. California home insurance calculators can help.

Cost Of Homeowner's Insurance In California

Since California is such a hot commodity and their average home prices are among the highest in the nation, one would expect their insurance rates to be higher, but this isn't the case. California's home insurance rates have only increased a little and are actually well below the national average.

Over three years, California's sample rates were well below the national average. That is close to $200 below the national average. $200 over 12 months can add up. Although these savings may not seem like much, they can be used to pay off mortgage or take an extended vacation.However, California is only around a hundred dollars more expensive than neighboring states Oregon, Nevada, and Arizona.

How To Get Additional Coverage?

Generally, homeowners insurance policies do not cover damage caused by natural disasters, which we call catastrophes. Natural disasters include earthquakes, floods, and wildfires. California has a high risk of earthquakes, landslides, and wildfires, which are not covered by standard homeowner policies.

A major earthquake can cause a lot of damage to one’s home and their belongings. Residents may even leave their homes while workers repair or rebuild them. In this case, earthquake insurance may help pay for the damages or loss. Additional living expenses may cover some of these costs if they relocate. It won't cover everything, but extra funds will help. Earth movement-related disasters like landslides, and mudslides are also covered.

The fire and casualty coverage in one’s standard homeowners' insurance policy covers fire and casualty, so there is not much more coverage one can add on. One may want to consider where they purchase a home based on these high-risk areas. Be on the lookout for potential price hikes in areas recently hit by wildfires so that one doesn't lose their home to wildfire and avoid high rates that may rise with increased wildfire activity. In California, flooding is not a major concern. Flood damage is excluded from homeowners insurance. Currently, California doesn't have a high flood risk, but this may change in the future. The state doesn't even make it to the top 15 metropolitan areas by storm surge risk.

Does California offer endorsements, riders, or add-ons?

There are usually exclusions and limits to what standard insurance policies will cover. When these limits are reached, endorsements and riders are required, usually at an additional cost. It's important to note that endorsement and rider are interchangeable terms that refer to any alteration to existing policy. States and companies offer different add-ons, endorsements, and riders. Most likely, these are caused by exclusions in one’s policy, which are generally caused by weather conditions or catastrophes that occur around their local area. In California, the terrain and weather patterns will affect their need and the cost of any additional coverage. The additions, however, can make the difference between being properly covered and being stuck with an uninsured loss bill.

List of add-ons listed below:

• Earthquake/Land Movement coverage can be an endorsement or a separate policy.
• A sewer backup policy targets issues related to sewage, which differs from a traditional water backup policy.
• Equipment Breakdown covers large appliances and HVAC equipment.
• If the standard coverage is less than one’s home's actual value, inflation guard/guaranteed replacement cost ensures their home will be replaced/covered at its full value.

Personal property replacement costs are ensured by replacing personal property, such as jewelry, at the expense of similar items rather than by actual cash value. A home-based business will cover expenses for equipment and property. A homeowner's policy can include coverage for small watercraft like a boat. Homeowners can add Identity Theft coverage to their homeowner's insurance policy to cover losses arising from identity theft, including any lost funds or replacement fees. On top of the standard homeowner policy's personal injury coverage, Personal Injury coverage is increased.

One may want a separate policy to cover each pad for two or more residences, such as a vacation home. A Limited Term Endorsement covers a temporary risk, such as when the house is vacant during renovations or remodeling. A floater/rider is reserved for high-value items that are worth more than what is allowed by the standard policy.

California homeowners insurance exclusions

One must read their policy to find out what their exclusions are. Exclusions are very important to read, understand, and know. The exclusions in California include earthquakes, floods, mold, earth movement, and wear and tear. A homeowners policy is legally obligated to have earthquake insurance, but their insurance agent can add endorsements that extend coverage to any of their provider's exclusions. Endorsements can sometimes be the only coverage one has when a loss occurs.

California Home Insurance: Bottom Line

Although California is more expensive to live in, wages are higher than national averages. If one can afford a house, the insurance plans are reasonable, if not below national standards. At this moment, wildfires are the major catastrophe to watch out for. There are programs in place as a last resort to ensure one has insurance. As incomes exceed national averages, homeowners can offset higher home prices with lower property taxes and insurance.

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