The 5 Best California Homeowners Insurance Companies
With 840 miles of coastline, mild year-round temperatures, and plenty of sunny days, there are a lot of reasons to live in California, but insuring your new home won’t be as carefree as a day on the beach. The state is home to some rare — and potentially catastrophic — events. From sporadic hurricanes, to earthquakes, to infamous wildfires that cause widespread damage, California deals with its fair share of disasters. While most homes go without damage year after year, the best homeowners insurance in California has to cover a wide range of “what if” possibilities.
Despite some extreme events, homeowners insurance premiums in California are relatively low compared to other coastal states. California residents pay an average of $966 per year for HO3 coverage, the most widely available policy, compared to $1,822 on average in Louisiana and $2,115 on average in Florida. But while a lower average premium may give homeowners a break, comparatively, California’s unique geography and risk of catastrophic events can have a big impact on individual premiums. If you’re insuring a home on a cliff or near the beach, for example, your premiums could be higher. The best way to tell is by getting quotes for your home and your area from a handful of providers.
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To find the best coverage options, we evaluated the five biggest insurance providers in California — based on market share — looking for what matters most to homeowners. Using a methodology similar to our nationwide homeowners insurance review, we got quotes from providers and compared rates, discounts, and available add-on endorsements to see which offered the most complete package. We looked for a history of satisfied customers, comparing rankings through Consumer Reports reader reviews and professional rankings through J.D. Power and Associates. We tested evaluators on financial strength, comparing ratings from third-party providers like A.M. Best and Standard & Poor’s. We even called providers up to see if their customer service was noteworthy — for better or worse.
California Homeowners Insurance Reviews
When it comes to overall customer satisfaction, State Farm ranked the highest of the five providers we looked at in Consumer Reports reader reviews, scoring an 82 out of 100. The company also tied for first with Liberty Mutual in J.D. Power and Associates’ claims experience ranking, scoring four out of five — meaning if you do have to file a claim, you’ll at least receive a timely payout.
State Farm offered fewer discounts than Farmers, Allstate, or Liberty Mutual, but it does offer the most common ones, including discounts for bundling your policies or installing safety features (like fire and burglary alarms) in your home. On the customer service side, the website felt clunky and hard to use at times, but the provider offers a good mix of educational materials and policy info online. Customers get an app to manage important aspects of their policy, like creating a home inventory, but the app’s features felt lacking compared to the standout Farmers iClaim app.
At first, State Farm may not feel as user-friendly as some providers like Allstate (which ranked highest in our initial impressions), but with a reputation for good customer service and timely payouts, State Farm does offer what really matters: help when you need it.
Bundling a host of discounts can save you a host of dollars, and when it comes to offering those discounts, Farmers was the clear standout. Farmers offered more discounts than any other provider we evaluated, and four times as many as offered by the California State Auto Association. With a wide range of discounts, you’ll likely find more than one you qualify for, but we noticed it is missing some common discounts like customer loyalty and breaks for senior citizens.
In overall customer service satisfaction, Farmers scored a 78 on Consumer Reports reader reviews, second to worst and only narrowly beating Allstate’s lowest score of 77. While no provider we evaluated got a perfect ranking, scoring on the low end could mean interacting with a rep (say when you need to file a claim or update your policy) could be frustrating or sluggish.
For customers who like to do most of their business online, Farmers also is a little lacking. The website is missing some of the features we love, like live chat, and the knowledge center isn’t as impressive as the ones offered by Allstate or State Farm. But when it comes to the all-important claims process, Farmers offers the impressive Farmers iClaim app, which lets customers start a claims process and submit photos right from their phones. And having the option to start a claim immediately — compared to calling and waiting — can get you back to the important things faster and not stuck waiting around for a live rep.
Allstate offered the most comprehensive website of any provider we evaluated, including most everything customers could want, from a rich knowledge center, to lists of possible discounts and policy options, to a step-by-step claims process guide. Its site is so robust we were surprised that California homeowners cannot apply for homeowners insurance online. This isn’t unusual: Given the higher risk of wildfires in California, many providers want to speak with the homeowner first rather than approving them immediately online, but Allstate was the only provider we evaluated not to offer the option.
The company offers a full slate of endorsements, tying for first with the California State Auto Association, and a fair amount of discounts, so you’ll be able to build a robust policy that covers everything you need. And you can feel secure you’ll get a claims payout when you need it, even in a widespread disaster. Allstate ranked excellent in terms of financial strength, with high ratings from Moody’s, Standard & Poor’s, and A.M. Best.
In terms of customer service satisfaction, though, Allstate scored the lowest on Consumer Reports reader reviews, and only reached an average ranking with J.D. Power and Associates. Our initial experience with Allstate’s over-the-phone service was good. We waited on hold less than five minutes and the rep was knowledgeable and pleasant, but a lower-than-average ranking with customers could mean you’ll experience frustrations or delays farther down the line — like when you’re following up on a claim.
California State Auto Association
In line with Allstate, the California State Auto Association has great endorsements, but the company offers the fewest discounts of any provider we evaluated. While you can get a premium break by having multiple policies, being a long-term Auto Association member, or being over 65 years old, many other notable discounts (like a newly purchased home or installing a new roof) were missing. If you’re looking for a well-rounded homeowners insurance policy that includes add-ons like umbrella liability or extended replacement costs, the CSAA’s full lineup of endorsements might outweigh its lack of discounts, but if you’re looking for a basic policy and super savings, providers like Farmers or Liberty Mutual might be a better bet.
The CSAA’s website was also the least impressive of any we reviewed, and was missing key features like a knowledge center, FAQ, and live chat. But if you prefer to do business in person or over-the-phone, the provider’s reps were the most helpful and knowledgeable we dealt with.
Liberty Mutual offers a wide range of discounts, coming in second only to Farmers. Customers can get a price break on newly purchased and newly remodeled homes, installing safety features like sprinkler systems and burglar alarms, and belonging to certain organizations. But the company offered the least amount of endorsements of any provider we evaluated.
Liberty Mutual received the second highest rating for overall customer satisfaction in Consumer Reports reader reviews and tied for first with State Farms in J.D. Power and Associates’ overall claim rankings, meaning despite some policy exclusions, Liberty Mutual has a proven track record of customer retention and satisfaction.
On initial impressions, Liberty Mutual doesn’t offer as impressive a website as Allstate, but was the only provider we evaluated to offer an online chat. Customers can also apply online and Liberty Mutual has an app for managing basic needs like tracking payments or updating your info. Over the phone, wait times were minimal — less than five minutes to reach a live rep — and we received helpful, friendly service.
Did You Know?
Wondering why we haven’t mentioned earthquake coverage yet?
Earthquakes are a part of life in California. Live in the state long enough, and you’ll likely feel the ground shake at least once. Most of the time, earthquakes are smaller in scale and don’t cause widespread damage, but the Big One Californians fear might be looming on the horizon. Scientists are 99.9 percent certain a large-scale earthquake — similar to the 1994 Northridge earthquake which caused $42 billion in damages — will happen in the next 30 years.
Considering the majority of California residents live within 30 miles of a fault line, it might come as a surprise that most homeowners don’t carry earthquake insurance. Only 17 percent of homeowners have it.
The problem might be earthquakes aren’t a standard peril under traditional homeowners insurance. “Many homeowners are surprised to discover it’s a separate policy,” says Brian LeBow, real estate agent with Coldwell Banker Residential Brokerage in Arcadia, California. Typically, to get earthquake insurance, you’ll have to purchase a separate policy through a third-party provider like the California Earthquake Authority, which writes around 76 percent of the policies in the state, according to Market Watch. State Farm, Allstate, Farmers, and Liberty Mutual offer earthquake coverage, but you’ll need to apply with a rep directly and some areas of the state may be excluded.
When applying for earthquake coverage, don’t undervalue the damage potential. “Homeowners should buy as much earthquake insurance as they can afford while striking a balance between paying now, and paying for potential repairs later,” LeBow says.
Wildfires also make coverage in California complicated.
Wildfires can cause widespread damage. In 2015, the Valley Fire and Butte Fire in Northern California destroyed around 1,600 homes, according to NBC Bay Area. The Valley Fire alone stretched over 75,000 acres in three counties.
Some areas of the state are more prone to fire outbreak. (Cal Fire has a Fire Hazard Severity Zone Map which shows what areas are higher risk.) But with dry climates, widespread drought, and human error — the Valley Fire was caused by faulty wiring on a hot tub — very few areas are completely risk free. Residents in lower- to medium-risk areas are typically covered under the fire peril of their standard homeowners insurance policy (all five of our evaluated providers offer this standard coverage), but residents in higher risk areas like the Modjeska Canyon may find it difficult to get traditional insurance at all. With our evaluated providers, for example, Farmers offered insurance in some parts of Modjeska Canyon, while State Farm did not.
If you’re considering buying a home in a higher-risk area, it may be difficult, but not impossible, to find insurance in the traditional market. For residents in these areas who weren’t able to find insurance, many turn to policies through specialty providers like Lexington Insurance, a specialty branch of AIG, and Foremost, a branch of The Farmers Exchangers. You also have the option to get a bare-bones insurance plan through California Fair Plan Property Insurance, an insurer of last resort owned by the state.
Rates may be rising — but not everywhere.
With an increase in wildfires — and homeowners insurance claims — some residents have been reporting a sharp and sudden increase in their premiums, with rates increasing 30 percent or more in affected areas. While any increase is an alarming trend, there is some evidence to suggest widespread increases may not be as steep. After all, any insurance provider must present an increase to the insurance commissioner before instituting it, meaning in areas without wildfire damage, it would be difficult to prove a rate increase as a necessary homeowner protection.
The Bottom Line
Between wildfires and earthquakes, California homeowners have some worries — but overall, finding a great policy for your home won’t be difficult. Use our review of the five biggest providers as your jumping-off point, and start gathering quotes using our quote tool below.
Find the best homeowners insurance in your area.
Get a quote by entering your ZIP code and start saving today.