State Farm shines as the best homeowners insurance company in California because of its availability, ability to pay out claims, and the number of available resources to its customers.
We analyzed 29 insurance carriers for this review, using the largest insurance companies by market share in California as our starting point. We then pared down the list based on customer service ratings, financial strength analyses, and affordability. We also looked at available coverage options, discounts, and features.
The 4 Best Homeowners Insurance Companies in California
| State Farm | USAA | Mercury Insurance | Allstate | |
| Our review | Our review | Our review | ||
| AM Best Financial Strength Rating | A++ | A++ | A | A+ |
| J.D. Power 2019 Overall Customer Satisfaction Score | 831/1000 | 878/1000 | N/A | 814/1000 |
| Online Quote Tool | ✓ | ✓ | ✓ | ✓ |
Average Cost of Homeowners Insurance in California
Despite the slew of natural disasters frequently hitting the state, California’s average homeowners insurance premiums are only $1,040, $171 below the national average. The crime rates surrounding your home, age of the house, type of construction, and how disaster-prone your area is, all play a role in your annual insurance price.
Home Insurance Add-Ons That Will Further Protect You
California has many possibilities when it comes to perils that can jeopardize your home. Policy add-ons and limits for earthquakes, flooding from named perils, wildfire, landslides, and mudslides should be considered when taking out home insurance in California. It’s important to analyze your area’s risk, and then purchase additional coverage to protect your house financially.
Helpful Resources for California Homeowners
The California Department of Insurance is a helpful resource for knowing the ins and outs of getting the most value out of your policy and knowing what’s included under standard policies. The California Department of Insurance also provides a list of phone numbers for dozens of insurers working in the state for you to contact when shopping for insurance.
Whether you’re still just comparing quotes or need to file a claim, United Policyholders is an invaluable resource when it comes to your homeowners insurance legal rights in California. It also gives you a step-by-step action plan on what to do if your insurer drops your coverage.
Methodology
To choose the best four homeowners insurance companies in California, we started with the biggest 29 in the state by market share. Then, we whittled down the numbers based on affordability, coverage options, J.D. Power scores, and AM Best ratings to judge their value, overall service, and financial strength.
We worked with Quadrant Information Services to provide data on home insurance rates by company, state, and age of home. Quadrant makes this information available using rate data that insurers are required to file with the state Department of Insurance. Rates are based on a sample profile created by Reviews.com for comparative purposes.
Best California Homeowners Insurance Companies
State Farm
Pros
- Large workforce
- Helpful resources and calculators
- Affordable premiums
Cons
- Potentially overcharging homeowners
State Farm has over 58,000 employees and more than 19,000 agents. Its sheer size means help in California is always nearby when you need it. State Farm’s website also has a wealth of educational resources and calculators for homeowners.
While our research showed the company’s annual premiums are an affordable $537, the Better Business Bureau website alerts consumers that in 2017, State Farm was ordered to reimburse customers in California after overcharging them by about 7%.
USAA
Pros
- Highest J.D. Power scores
- Pays replacement cost for home and belongings
Cons
- Only available to past and current military personnel and their families
USAA scores an impressive 5 out of 5 ratings in all categories of J.D. Power’s 2019 Home Insurance Study, with a customer service ranking that’s second to none. A reason it’s well-loved is USAA replaces your personal belongings and home based on today’s replacement cost, not its depreciated value.
Though its service and offerings are stellar, not everyone in California can take out a USAA home policy. It’s only available to veterans, active-duty military personnel, and their families.
Mercury Insurance
Pros
- Lowest average annual premiums
- Uniquely poised to address the needs of California homeowners
Cons
- Must call to file a claim
At just $405, Mercury Insurance has the lowest annual premiums of all the companies we analyzed. The company was founded in California and is very familiar with the unique needs of the state’s residents. Its coverage includes property damage resulting from fire, lightning, windstorms, and more.
If you need to file a claim, know that you can’t easily do so online or through its app like with many of its competitors; you must call the company for this service.
Allstate
Pros
- Multitude of discounts
- Standout optional features
Cons
- Unavailable in wildfire-prone areas
Most homeowners insurance companies only offer a few discounts, but Allstate provides an impressive array, including savings for having a smoke-free home or home shutters. Optional extras like Claim RateGuard, Claim-Free Rewards, and Deductible Rewards further boost the value of an already affordable average premium of $416 in California.
However, keep in mind that if you live in an area where wildfires may happen, Allstate might not insure you. In September 2019, it dropped homeowners in Berkeley Hills, citing the wildfire risk as the reason.
The Cheapest Homeowners Insurance Companies in California
| Largest Companies by Market Share in California | Average Annual Premium |
| Mercury Insurance | $405.00 |
| Progressive | $409.00 |
| Allstate | $416.00 |
| Armed Forces Ins Exch | $458.00 |
| Garrison Prop & Cas Ins Co | $484.00 |
| State Farm | $537.00 |
| USAA | $537.66 |
| Travelers | $605.00 |
| Interins Exch Of The Automobile Club | $608.00 |
| Universal N Amer Ins Co | $629.00 |
| Aegis Security Ins Co | $660.00 |
| CSE Safeguard Ins Co | $737.00 |
| Grange Ins Assn | $789.00 |
| Safeco | $793.00 |
| Nationwide | $817.00 |
| Eagle W Ins Co | $817.00 |
| Farmers Insurance | $824.33 |
| Metropolitan Insurance | $864.00 |
| First Amer Prop & Cas Ins Co | $937.00 |
| MAPFRE | $1,026.00 |
| The Hartford | $1,143.00 |
| Twin City Fire Ins Co | $1,143.00 |
| Sentinel Ins Co Ltd | $1,200.00 |
| Trumbull Insurance | $1,232.00 |
| Cincinnati Ins Co | $1,293.00 |
| AIG Prop Cas Co | $1,468.00 |
| Chubb | $2,948.00 |
| Encompass | $4,077.00 |
| Privilege Underwriters Recp Exch | $4,865.00 |
| Age of Home (years) | Sample Annual Premium |
| 5 | $1,063 |
| 20 | $1,372 |
| 35 | $1,441 |
| 50 | $1,425 |
| Average Across Ages | $1,325 |
Top 3 Cheapest Homeowners Insurance Companies in California
- Mercury Insurance – $405
- Progressive – $409
- Allstate – $416
Top 3 Most Expensive Homeowners Insurance Companies in California
- PURE Insurance – $4,865
- Encompass – $4,077
- Chubb – $2,948
Clocking in as the cheapest homeowners insurance companies in California are Mercury Insurance, Progressive, and Allstate. The most expensive companies are PURE Insurance, Encompass, and Chubb. We used general profiles to get our average annual premiums. You can find out the best value for your budget by requesting personalized quotes.
Homeowners Insurance in California FAQ
Is homeowners insurance required in California?
No, homeowners insurance isn’t required by California law. But your lender will most likely ask for it if you have a home mortgage.
What is the cheapest homeowners insurance in California?
Mercury insurance has the cheapest homeowners insurance in California, according to our research. However, be sure to get individual quotes for the most accurate price based on your unique circumstances.
About the Authors
Lorraine Roberte is a South Florida-based personal finance writer. Her work has been published on sites such as Thrive Global, Elephant Journal, Red Tricycle and Tweak Your Biz.
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