California Home Insurance - What You Need to Cover

Knowing what to cover and how much liability you need is critical in determining your coverage. 

There's no better time than the present to start shopping for home insurance in California. The average homeowner's monthly premium about a third of the size of month's mortgage payment.

Renter's insurance tends to cost less than 10% of the average rent in California. Tenants usually don't have to assume the cost of the most expensive part of insurance in the Golden State: Earthquake coverage. Quakes are more of a concern for landlords, because a building's ability to resist earthquake damage depends upon the strength of the foundation and groundwork, which are well beyond tenants' control.

Homeowners in California typically have to obtain earthquake insurance to comply with the terms of their mortgages, because lenders want to protect their investments. Earthquake coverage might be included in a policy specific to California, or you might have to purchase it as an extra, which insurers typically call a rider.

You can get a lower premium on earthquake coverage if your home complies with seismic building standards. The more recently your home was built, the better it can withstand earthquake risks and the more likely insurers will cut you a better deal on premiums. If the building dates before, say, 1970, and there's no record of any seismic retrofitting work done after that point, now's a good time to hire a contractor who can bring you up to date.

Get Documentation

Obtain as much documentation as possible regarding your property's seismic infrastructure and provide this paperwork to insurers when you apply for coverage. The architects and building contractors who have worked on your home should be able to give you with copies of building plans and receipts that you could supply to insurance companies as proof of quake risk damage mitigation. Your home needs to be built or retrofitted according to the degree of stability your land has during an earthquake. You can learn how the ground under your home would respond to a quake by obtaining a map from the U.S. Geological Survey showing the composition of the earth in different neighborhoods.

Extra Coverage

Damage from mudslides, flooding and wildfires are areas of coverage that don't fall under basic California homeowner's policies, although these phenomena do tend to strike some parts of the state. If such conditions are common in your county, you may want to buy a rider to include these natural disasters in your homeowner's policy. Be sure to read through insurance information to see what types of weather damages are included in a policy, and what might cost extra. Compare the items listed as exclusions with a search through historical information about your region. If a particular type of natural disaster has happened nearby within the past couple of decades, that justifies buying a rider to expand your coverage accordingly. If you live near the coast, consider buying flood insurance, for example.

Climate change may have a great impact on California: flooding could become more common along the coastline, in the central valley and near riverbanks; desert areas and the southern part of the state are likely to get hotter, and wildfires might happen more frequently. All of these factors are good reasons not to cut corners on California home insurance. Underinsuring your home and belongings will leave you having to spend extra cash if you need to make a repair or replacement. The right amount of coverage will make you and your loved ones feel more secure.