Best Homeowners Insurance in California: Top 5 Insurance Companies to Protect Your Investment

When you call the home of Hollywood the location for your real estate investment, you will have to deal with the potential risks associated with homeownership and renting. Though you'd like to imagine beach trips and sunshine, wildfires and thunderstorms are prominent.

You want to protect your investment property, and the easiest way to do that is through homeowners insurance in California. In most cases, you'll need it if you take out a mortgage loan.

There are many home insurance providers available, whether your property is in San Diego or elsewhere. However, finding the best homeowners insurance with reasonable insurance premiums is challenging.

This guide will help you navigate through it all. We researched the top homeowners insurance companies available in California to help you choose the right insurance policy. You'll get key tips for selecting homeowners insurance, especially with the unique hazards California is known for. Let's get started!

Understanding California Homeowners Insurance

Safeguarding your investment is crucial, and it might be slightly different because you're a property manager or landlord. Therefore, clearly understanding homeowners insurance is vital.

Overall, home insurance is the safety net in place against unforeseen problems. Your valuable assets and property are protected, even when dealing with challenges.

Average Home Insurance Costs in California

California homeowners insurance costs will vary based on many factors. These include the:

• Age of the home
• Size and composition of the home
• Amount of coverage you want
• Type of coverage
• Location

The average annual premium you'll pay for California homeowners insurance is $1,225/year, which is for $250,000 in dwelling coverage. This is far below the national average annual premium of $1,428 for homeowners insurance. However, the insurance premium for each home could be lower or higher, depending on the factors listed above.

In fact, the average annual premium in California might be lower than the nation's average because there's a lower risk of some weather damage. However, wildfires are extremely common, so you should discuss your risk needs with an insurance company.

Homeowners Insurance vs. Landlord Insurance

Landlords and property managers have to focus on the differences between landlord and homeowners insurance. Typically, the latter deals with the home's structure and any personal belongings. Therefore, it might not be enough for rentals.

Landlord insurance, though, is specialty coverage that's tailored to a property owner's needs when they rent property. It extends the protection to cover the home's structure, liability from tenant accidents, and potential loss of income.

Navigating the challenges of property management is confusing, but it's best to focus on the insurance type that gives you enough coverage and protection against the risks you'll likely face.

Insurance policies have specific conditions, as well. Therefore, you can't misrepresent the use of the property. If you do, you might have the policy canceled or deal with denied claims.

When might you need homeowners insurance and not landlord insurance? Here are the scenarios to consider:

Vacant Property

Your rental property is vacant and not rented to anyone. Therefore, you might consider homeowners insurance to protect the property and any personal belongings you store there. Make sure the insurance provider knows about this.

Temporary Absence

You might live in your home but have to temporarily move because of work or travel purposes. Though you intend to come back, you may rent out the space while you're gone. Homeowners insurance can be helpful, but you should definitely talk to the insurer to ensure you have appropriate coverage. Those who plan to rent the property long-term might want landlord insurance instead.

Transition Period

When you acquire a new property, it often takes time to clean it up and prepare it for renting. This is the transition period, and homeowners insurance can be highly beneficial at this time.

Home Sharing

Homeowners insurance policies might offer home-sharing coverage, which is where you rent a portion of the primary residence to another. It's typically for a roommate who receives a single bedroom.

Coverage can vary between insurance companies, so you should talk to your agent. Likewise, you might want to consider liability coverage, which will deal with incidents involving the tenants and all guests.

However, you will probably generate rental income from that room. Homeowners insurance may not be enough to cover the income loss during a covered event. Therefore, you might require landlord insurance as well.

How to Choose a California Homeowners Insurance Company

You now know that homeowners insurance is crucial, so you need to find the right home insurance company. There are plenty of them, but you won't see State Farm or Allstate on the list. These two brands claimed a challenging reinsurance market is making it hard for them to offer coverage to those in California.

Still, there are plenty of options available. Before checking them out, let's see what's typically covered under homeowners insurance policies:

• Dwelling Coverage - This covers the loss of your main structure and any attached structures, such as a garage or carport. Likewise, it will cover losses for plumbing, HVAC systems, and electrical wiring.
• Personal Property - This will pay replacement costs for personal items, such as clothing, sports equipment, and furniture. However, the personal property coverage limits the amount it pays for fine art and jewelry.
• Medical Payments - If someone outside the household gets injured on the property, medical payments coverage can pay the medical bills.
• Personal Liability Coverage - This pays the costs if someone sues you because of bodily injuries or property damages.
• Loss of Use - If the covered loss makes your home inhabitable, this coverage will pay expenses, such as restaurant and hotel bills.
• Other Structures - After a covered loss, this coverage will pay to replace or repair the unattached structures, including sheds and fences.

Unique Policy Needs for California Homeowners Insurance

Though California law doesn't dictate the insurance industry, most homeowners insurance companies offer unique coverages. You may or may not need them, and it's wise to consider each one carefully. They include:

Flood Insurance

The California Water Conservation Board claims that the Centennial State has about 270 flood-prone areas, which covers 64 counties. Most home insurance providers don't cover flood damage, so you'll need separate flood insurance.

If you have a government-backed mortgage on a home in a high-risk flood area, you'll need this coverage. Likewise, lenders might require it.

Though the companies listed below are private flood insurers, you can look at the National Flood Insurance Program to find other options.

Wildfires

The incident archive reports from the California Department of Forestry and Fire Protection show that 2022 saw 7,577 wildfires, which damaged 104 structures and destroyed 772. Basic coverage will likely cover fire damage, but the policy could specifically exclude or limit coverage for wildfires.

Sometimes, insurance providers partner with a special company called Wildfire Defense Systems. This helps protect against and mitigate damage because of wildfires, but the program availability could vary by state.

California also created the FAIR Plan Association to offer coverage when you can't find it through a traditional insurance company. However, it's not very comprehensive.

Earthquakes

The California Geological Survey claims that this state has over 90 possibly active faults. Typical home insurance doesn't offer earthquake coverage. However, you can generally find standalone earthquake insurance or an earthquake rider policy. This should cover loss of use expenses, the contents of the home, and the house structure.

Theft and Vandalism

Basic home insurance includes coverage for vandalism and theft. In fact, it might pay for any structural damage caused by the break-in and will replace the stolen personal property based on actual cash value or replacement cost basis. This depends on the coverage you choose.

However, some personal property categories, such as antiques, firearms, artwork, furs, and jewelry, will have reduced coverage limits or specific exclusions.

Generally, homeowners policies use a vacant-home clause, so there's no coverage if no one is in the home and vandalism occurs. You should read everything carefully when determining which option is right for you.

High Winds

Basic coverage extends to windstorms, but there could be separate limits or deductibles in effect. Therefore, if your rental property is in an area prone to wind, you should talk to your insurer about the specifics of your case and policy.

Other Factors to Consider When Assessing California Homeowners Insurance Companies

You need to make an informed decision about the best homeowners insurance policy for your needs. Here are a few other factors to consider:

• Determine your needs.
• Research companies available by checking the websites and reading customer reviews.
• Compare coverage options.
• Consider the costs.
• Evaluate the company's financial stability.
• Check customer service responses.
• Focus on discounts.
• Get recommendations from others.
• Review your policy thoroughly.

Best Home Insurance Companies in California

It's time to learn about the best homeowners insurance companies available in California. They include:

1. Lemonade

Lemonade provides renters, auto, pet, life, and home insurance products. All the policies are sold through the Lemonade app or online. When you buy a policy, you'll manage the claims and policy through the app and will also contact customer service that way.

Coverage and Features

The homeowners insurance policies at Lemonade provide basic coverage for the home, personal property, and other structures. Here's the full list:

• Personal property
• Other structures
• Dwelling coverage
• Medical payments
• Liability protection
• Loss of use

There are also additional coverage options available, such as:

• Swimming pool coverage
• Extended reconstruction cost (offering up to 50 percent of the dwelling coverage for rebuilding costs)
• Extra coverage for jewelry, artwork, musical instruments, bicycles, and cameras
• Equipment breakdown
• Buried utility, such as power lines, sewage, water, electrical, and gas
• Foundation water backup
• Water backup from sump pumps, backed-up pipes, and floor drains

Discounts

Compared to other companies, Lemonade provides fewer discounts, but you can inquire about:

• Annual payment plan discounts
• Protective device discounts, such as smoke alarms, deadbolts, and burglar alarms
• Bundling a home insurance policy with pet or auto insurance

2. Amica

Amica offers auto, home, life, and marine insurance, and the standard policy includes liability and property coverage. Likewise, customers have the option of choosing Platinum, which means they can customize the coverage with add-ons.

Unlike other homeowners insurance policies, Amica allows you to earn dividends, so you could recoup up to 20 percent of your premiums every year.

Coverage and Features

When you choose the Standard Choice, you'll get basic coverage on the home, which includes:

• Personal property
• Dwelling
• Other structures
• Liability
• Loss of use

The Platinum Choice option offers the basic coverage along with things you can purchase separately based on your needs. These include:

• Medical expenses and liability protection
• Personal property replacement
• Dwelling replacement cost
• Water backup and sump overflow
• Business property coverage
• Extended coverage on valuable items
• Identity theft protection
• Loss assessment plans
• Credit card coverage

Discounts

When you become an Amica policyholder, you can enjoy these discounts:

• Remodeled/new home credit
• Automatic detection devices, such as water and gas leak detection systems and temperature monitoring systems
• Alarm systems, such as automatic sprinklers, fire alarms, and burglar alarms
• Multi-line discounts when bundling homeowners policies with umbrella, life, condo, auto, or renters policies
• Loyalty discounts after being with the brand for two years
• Autopay discounts
• E-discounts (for signing up for electronic documents)
• Claim-free discounts for not filing a claim within the past three years

3. Nationwide

Nationwide began as an auto insurance provider, but now it offers various insurance, banking, and investment products. You can buy standard coverage to protect you from water damage, theft, fire, and wind, but it also includes specialty coverage.

Coverage and Features

The standard policy from Nationwide includes these protections:

• Dwelling
• Personal property
• Other structures
• Guest medical payments
• Personal liability
• Ordinance/law insurance when your home isn't up to current building codes after a covered loss
• Credit card insurance
• Loss of use

Additional coverage (you pay for separately) can include:

• Valuables plus for antiques, jewelry, and fine art
• Water backup for sump pump malfunctions
• Dwelling replacement cost protection for rebuilding
• Identity theft protection
• Better roof replacement (upgraded materials after a covered loss)
• Brand new belongings (pays the difference between brand-new item prices and the depreciated value)
• Flood insurance
• Earthquake insurance

Discounts

With Nationwide, you might be entitled to these discounts, so make sure to ask your insurer:

• Multiple insurance policies (20 percent discount for bundling motorcycle, renters, or automobile insurance)
• Protective devices discount (smoke alarm, burglar alarm, etc.)
• Gated community discount
• Smart home discount (only for Notion Smart Home System)
• Prior insurance discount
• New home purchase discount
• Roof rating discounts (based on the age and roof materials)
• Home renovation discount for updating the home's appliances)
• Claims-free discount

4. Liberty Mutual

Liberty Mutual is based out of New England, and it's been around for more than 100 years. Today, it offers multiple investment and insurance products, such as pet, home, and auto insurance. Let's learn more about it!

Coverage and Features

The standard policy at Liberty Mutual covers:

• Personal property
• Dwelling
• Other structures
• Liability protection
• Guest medical coverage
• ALE (Additional Living Expenses)

There are additional coverage options available for a separate charge, including:

• Identity theft protection
• Water backup coverage
• Inflation protection
• Umbrella coverage
• Blanket jewelry coverage
• Personal property coverage
• Earthquake coverage
• Replacement cost for belongings
• Hurricane coverage
• Flood insurance

Discounts

The discounts at Liberty Mutual include:

• Multiple insurance policies
• Paperless policy discount
• New roof discount
• New/renovated home discount
• Early shopper discount
• Preferred payment discount
• Insured to value discount
• Newly purchased home discount
• Claims-free discount
• Safe homeowner program

5. Chubb

Chubb provides standard home insurance policies, though you can get specialty coverage to protect your collectibles and boats. Likewise, the Masterpiece Homeowners Coverage plan lets you bundle the basic coverage with an enhanced option to extend coverage as needed. Let's learn more!

Coverage and Features

Chubb calls its basic coverage the Masterpiece Homeowners Policy. It will protect your property and home, including your personal belongings, pools, and outbuildings. Likewise, the policy covers fire, theft, smoke, vandalism, and bad weather damages. You will also get loss-of-use insurance and personal liability/guest medical coverage.

Though most insurance companies don't cover water backup for sewers and interior drains, this one does. However, you may have to buy separate insurance for valuable items, floods, and earthquakes.

Discounts

Chubb does provide many options to lower your policy bill, but each discount might not be available in California.

The discounts include:

• Backup generator discount
• Fire/security discounts
• Multipolicy discounts
• Claims-free discount
• New/renovated home discount

Other Notable California Home Insurance Companies

You have many homeowners insurance companies available, but the ones mentioned earlier are the top picks. It's possible to check out the others and get a homeowners insurance policy from any of them. The options include:

• Progressive
• Farmers Insurance
• USAA (only for Military members and families)
• Encompass
• Hippo

Conclusion

Though California might seem picturesque, you know that you must protect your rental property. The insurance industry is booming because everyone wants to ensure their homes and personal items are safe.

Choosing a company is crucial, and you might not want to go for the cheapest homeowners insurance in California. It might not offer enough coverage. However, if you still wish to keep costs low, this list is the best place to start searching.