Best Homeowners Insurance in California August 2023

Home Insurance

Amy Fontinelle

Kara McGinley

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Published 12:00 a.m. ET Aug. 24, 2023

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The best homeowners insurance companies in California are still writing new policies at reasonable prices in a state that poses serious challenges.

Insurers in the state took a major hit from catastrophic wildfire losses in 2017 through 2022. Since then, they’ve faced regulatory barriers to charging premiums that reflect heightened risks from climate change, inflation and homebuilding in fire-prone areas.

Unsurprisingly, insurance companies have responded by reducing their footprints in California. If they can’t stay profitable, they won’t be able to pay anyone’s claims.

More than 100 insurance companies still offer coverage, but major mid-market insurers like State Farm and Allstate have stopped issuing new coverage and are only renewing existing policies. Farmers has also limited how many new policies it will write in California.

Wealthy California homeowners aren’t immune to these changes, either. High-end insurers AIG and Chubb pulled back in 2022.

Travelers is the best home insurance company in California, according to our analysis, due to its affordable rates and low customer complaint levels.

Travelers

Travelers has been around since the 1800s. Its first product was accident insurance, and today it offers a wide range of insurance products for individuals and businesses. California was the company’s largest property and casualty market in 2022, representing over 10% of the company’s business.

Additional coverage and upgrades

Discounts available

USAA

Military members get additional perks when purchasing homeowners insurance through USAA, including coverage for military equipment and deductible waivers if personal property is lost or damaged due to war.

USAA will also cover the cost of replacing or repairing your uniform with no deductible while you’re on active duty. The company’s focus on the unique needs of military members and their families makes it the best homeowners insurance option for those who serve.

Learn more: USAA home insurance review

Additional coverages

For an additional premium, you can get further protection through USAA in several areas:

Discounts and credits available

In California, USAA offers homeowners the following discounts and credits that can reduce premiums:

CSAA

Homeowners insurance from the California State Automobile Association (CSAA) may be an option if you live in Central or Northern California. CSAA offers coverage in 44 of California’s 58 counties, but none of them is in Southern California. It’s affiliated with AAA, the American Automobile Association.

CSAA does not offer homeowners insurance in these 14 counties:

However, your local equivalent may offer homeowners insurance in these areas. For example, AAA appears to offer homeowners insurance in Los Angeles County.

Additional coverages

Discounts and credits available

In California, CSAA policyholders can enjoy several discounts and credits to reduce their premiums:

Farmers

Farmers was founded in Los Angeles in 1928 to provide preferred auto insurance rates to farmers and ranchers. Today, Farmers is made up of three companies that are owned by their policyholders.

Farmers has limited how many new policies it will write in California. It’s unclear whether you’ll be able to get a homeowners policy from Farmers or how to increase your odds of being one of the lucky ones.

We found that the best way to get a quote was to use the “Find an Agent” tool, then search for your location, pick an agent and click on “Get a Quote” instead of requesting a quote through the main homeowners insurance page.

Learn more: Farmers home insurance review

Additional coverages

Farmers Smart Plan Home lets you customize your coverage with the following options:

Discounts and credits available

These are some of the premium reductions you could qualify for with a Farmers home insurance policy in California:

Here’s the average annual cost of a home insurance policy with $350,000 in dwelling coverage in California, by company. Keep in mind that some insurers only offer coverage in certain areas of the state.

Yes. California homeowners insurance rates increased from an average of $1,070 in 2017 ($1,190 in 2021 dollars) to almost $1,460 in 2021 — a 23% increase, according to California Department of Insurance Data published by the San Francisco Chronicle.

Homeowners in some high-risk wildfire areas who don’t qualify for regular home insurance coverage may have to purchase two policies — a California FAIR Plan policy and a difference in conditions policy — to get the equivalent of an HO-3 policy, the most common type of homeowners insurance.

Insurers say that California’s regulatory climate has made the state a less hospitable place to offer coverage. State Farm and Allstate both stopped writing new home insurance policies in California. The problems with insurers leaving the state or temporarily not offering new policies — forcing more and more homeowners to purchase expensive coverage of last resort — largely relate to wildfires.

There are common discounts you may qualify for, like:

So, aside from doing the usual things like shopping around and comparing home insurance quotes, some California homeowners may be able to save money on homeowners insurance by carefully evaluating their property’s wildfire risk.

Insurers are increasingly offering lower rates for fire-hardened houses and neighborhoods. Programs like FireWise USA and Wildfire Prepared Home help communities fireproof their houses to prepare for California wildfire season. If you pass an inspection with these programs, your insurer may offer you a discount.

Standard home insurance covers the structure of your house if it is damaged by any problem, unless it’s specifically listed as an exclusion in your policy. An example of excluded damage would be flood damage.

Here’s how the coverages in a home insurance policy work.

This coverage pays to repair damage to the structure of your house, unless it’s listed as an exclusion. It’s recommended that you have enough dwelling coverage to rebuild your house from the ground up after a covered disaster.

This coverage pays to repair damage to other structures on your property, like a shed or pool house.

This pays to replace your belongings if they’re destroyed by a covered disaster, like a wildfire.

With standard home insurance, your belongings are covered if damaged by 16 listed problems, or perils, in your homeowners policy.

Tip: When filing a property damage claim, your deductible will be subtracted from the claim payout. The higher your deductible is, the cheaper your home insurance payments will be, but the less you’ll be reimbursed in the event of a claim.

Also called additional living expenses, loss of use coverage pays for things like temporary housing, restaurant meals and pet boarding if you temporarily need to stay elsewhere while your house is being rebuilt after a covered disaster.

If you’re at fault for someone’s injury or damaged property, liability coverage can pay for their medical bills or repair fees. It can also pay for your legal expenses and settlements if you’re taken to court over the matter, like if your dog attacks someone at the park and they sue you. You can typically get $100,000 to $300,000 in liability coverage.

This pays for someone else’s more minor medical expenses, regardless of who was at fault for the accident. You can typically get up to $5,000 in medical payments to others coverage.

No homeowners insurance policy will protect your property against every possible risk. Home insurance doesn’t cover the following problems, however you may be able to purchase coverage add-ons or separate policies for some of them.

Homeowners insurance typically excludes damage caused by flood, mudslide and debris flow unless, California Department of Insurance Commissioner Ricardo Lara says, these disasters “are directly or indirectly caused by a recent wildfire or another peril covered by the applicable insurance policy.” For more information, see the state’s Department of Insurance fact sheet on flood, mudflow, mudslide, landslide or sinkhole losses after a wildfire.

California homeowners face many natural disaster risks — and some of them require supplemental insurance. A tool called Risk Factor by First Street Foundation can help you see the potential losses your California home faces from risks, such as the following.

Thirteen of California’s most destructive wildfires have occurred since 2017, destroying nearly 50,000 structures in Napa, Sonoma, Butte and many other counties. Wildfires are covered by homeowners insurance, but if you live in a high-risk area, you may struggle to find home insurance or have limited coverage options.

Because wildfires obliterate homes, take years to recover from and drive up demand for contractor labor, building materials and remaining housing, California homeowners should consider the value provided by extended replacement cost and building code upgrade coverage for their dwellings, replacement cost coverage for their belongings and generous additional living expense limits.

You may also want to consider taking steps to fireproof your house as many insurers offer discounts and credits for such measures.

All California homeowners are at risk of earthquake damage, but earthquakes aren’t covered by homeowners insurance. If you want coverage, you can get a California Earthquake Authority policy or a private earthquake insurance policy.

Everyone is at risk of flooding — it’s just a question of how much risk. If your home is in an area the federal government has designated as high risk, and if you have a mortgage, you’ll typically be required to carry flood insurance. Otherwise, it’s up to you to evaluate your risk and decide how much coverage, if any, to purchase. Keep in mind that federal flood maps don’t always provide an up-to-date or comprehensive assessment of your home’s flood risks.

Many people don’t realize this until it’s too late, but flooding is not covered by homeowners insurance. While coverage is available through the National Flood Insurance Program (NFIP), many California homeowners would find its $250,000 dwelling policy limits inadequate if faced with a major loss. Private flood insurance companies offer higher coverage limits that may be suitable depending on your needs.

None of these disasters are typically covered by homeowners insurance in California — unless you can prove that a problem covered by these home insurance, such as a wildfire or flood, was the “efficient proximate cause.” It’s a battle you could have to fight in court.

For protection against these risks, you may want to purchase a difference in conditions policy from a surplus lines insurance company. One policy can cover multiple risks — landslides, mudflows, earthquakes and flooding, for example. This arrangement may provide more comprehensive and cost-effective coverage than cobbling together separate policies.

Given the additional challenges with insuring a home in California, these tips may be especially helpful when you’re trying to find the right home insurance company.

Our insurance experts evaluated 23 insurers to determine the best homeowners insurance companies in California based on the availability of new policies and reinsurance, average home insurance rates for Californians and consumer complaints against each company using the National Association of Insurance Commissioners Complaint Index. Each category was assigned a different weight, adding to a score of 100.

Rates: 75 points. We analyzed home insurance rates from Quadrant Information Services. The average rates are based on policies:

Consumer complaints: 25 points. We collected complaint data from the National Association of Insurance Commissioners (NAIC), which shows the volume of home insurance consumer complaints against each company to state insurance departments.

Insurance companies that had significantly higher rates and/or consumer complaints than the California average did not make our rating. If an insurance company stopped selling home insurance or renewing its home insurance policies to all residents in California, it didn’t make the cut. We didn’t include any companies that received lower than a 2-star rating.

By direct premiums written, State Farm was the largest home insurer in California in 2022 according to the Insurance Information Institute. However, as of May 26, 2023, State Farm decided to temporarily stop offering new homeowners policies in the state. Farmers is the second largest home insurance company in California, followed by CSAA.

Travelers has the best cheap home insurance in California according to our analysis, followed by CSAA. If you’re looking for cheap homeowners insurance, you might want to start with these companies.

Just keep in mind that factors like your location, insurance score and coverage decisions will influence your premiums, so the companies that are cheapest on average may not be cheapest for you. Ideally, you’ll look for the policy that offers the best value for the coverage you want — which won’t necessarily be the cheapest.

No, California does not require homeowners to carry homeowners insurance. If you have a mortgage, however, your mortgage servicer will require you to carry enough homeowners insurance to rebuild your home in case of a total loss. Also, if your property is in a high-risk flood zone according to federal flood maps, your lender will require you to carry flood insurance.

No. Unlike auto insurance requirements for vehicle owners, the state of California does not impose minimum insurance requirements on homeowners. It’s up to you to determine what coverage you need, which may include homeowners, earthquake and flood insurance.

Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.

Blueprint has an advertiser disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.

Amy Fontinelle

BLUEPRINT

Amy Fontinelle has more than 15 years of experience helping people make informed decisions about their money, whether they’re refinancing a mortgage, buying insurance or choosing a credit card. As a freelance writer trained in journalism and specializing in personal finance, Amy digs into the details to explain the products and strategies that can help (or hurt) people seeking greater financial security and wealth. Her work has been published by Forbes Advisor, Capital One, MassMutual, Investopedia and many other outlets.

Kara McGinley

BLUEPRINT

Kara McGinley is deputy editor of insurance at USA TODAY Blueprint and a licensed home insurance expert. Previously, she was a senior editor at Policygenius, where she specialized in homeowners and renters insurance. Her work and insights have been featured in MSN, Lifehacker, Kiplinger, PropertyCasualty360 and more.

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