The Best Homeowners Insurance Companies in California
For all its breathtaking beauty, California can present a diverse set of challenges to homeowners. Old growth forests, imposing mountains, and vast deserts open the way to wildfires, mudslides, earthquakes and more. If you own a home in California, you’re going to need great rates and excellent coverage in your homeowners insurance. We’ve put together this review to take some of the guesswork out of the process.
How We Chose the Best Homeowners Insurance Companies in California
We found the top five homeowners insurance providers in California and evaluated them using the same methodology as in our nationwide homeowner’s insurance review. First, we checked each provider’s financial stability and customer service rankings. Then, we looked for a wide variety of coverage options and discounts, so that you can customize your policy to your specific needs. We even compared typical rates for different types of homes; you’ll still have to request individual quotes to find the best price for you, but these estimates can help you understand which provider offers the right package for your situation.
The Best Homeowners Insurance Companies in California
- Liberty Mutual
- State Farm
Allstate returned to the California insurance market in 2016 after nine years of not issuing any new policies in the state. We’re glad to see Allstate back on the list, because it’s at the top of ours. This company earns top industry ratings: An A+ from A.M. Best means that Allstate is financially stable enough to make good on all payouts, and Consumer Reports ranks its claims process and payments ‘Very Good.’ As for overall customer satisfaction, Allstate earned 3/5 stars from JD Power — but only a small handful of insurers scored above three, so don’t take that as a vote of dissatisfaction.
- In addition to high ratings, Allstate has some of the best homeowners insurance policies on the market. If you’re looking for extra coverage, you can add on water and sewer damage, identity theft protection, and umbrella liability coverage, among other options. We also love Allstate’s long list of discounts. You can expect a price cut for multi-line insurance policies (like bundling auto and home insurance), setting up auto pay, and keeping a smoke-free home. Allstate even lowers premiums for new homes, newly renovated homes, or having a new roof.
- Allstate also stood out for one unique feature: An online tool that lists the most common and costly claims by zip code. If you live in LA’s 90004 zip code, for example, the most common insurance claim is theft and the most costly claim is smoke damage. Head north to Ojai (zip code 93023), and the most common claim is wind while the most costly claim is liability. You can use this tool to determine which types of coverage you might need and whether you should install features like a home alarm system to deter would-be thieves. (And if you do add a burglar alarm, you’ll become eligible for another discount!)
Liberty Mutual received an A rating from A.M. Best, which is slightly lower than Allstate’s A+, but still reflects a very high level of financial stability. Like Allstate, Liberty Mutual received “Very Good” ratings from Consumer Reports and 3/5 points from JD Power, proving that customers are satisfied with its claims and service. We ultimately gave Allstate the edge for California homeowners because Liberty has slightly fewer discount options. There’s nothing for people who autopay their premiums, for example, a standard discount with most providers.
However, Liberty Mutual surpasses Allstate with its resources and educational tools. The company’s MasterThis educational mini-courses were developed in partnership with HowStuffWorks to teach you everything you need to know about homeowners insurance. It also offers two best-in-class mobile apps: One that lets you manage your policy and file claims, and a separate Home Gallery app that lets you create and manage a home inventory. This feature is especially important in case of fire or mudslide damage; people who fires report that not having a home inventory made the claims process very complicated. Being able to prove the value of your personal property is essential — so use the app to keep your home inventory in one place.
State Farm dominates the ratings pool. It carries an A++ from A.M. Best, which is the highest of any provider on our list. It also received a ‘Very Good’ ranking from Consumer Reports, and JD Power gave the company 3/5 points for both its claims process and overall satisfaction. If you purchase a policy through State Farm, you can expect exceptional customer service and financial stability.
However, we rank State Farm third for two reasons: First, it doesn’t offer as many discounts as Allstate or Liberty Mutual, meaning your policy will likely be pricier. Second, its website and app come with fewer features. You can’t build a home inventory or even upload claims photos through its app (although you can upload those photos through your account at StateFarm.com).
One of the biggest homeowners insurance providers in California is better known for its auto insurance: AAA (sometimes called the CSAA Insurance Exchange or the Auto Club Exchange Group). You’re not going to find a lot of information about homeowners insurance on AAA’s website, but it does offer discounts for people who insure both their cars and their homes, as well as homeowners with burglar or fire alarms, renovated homes, or fire-resistant roofs. It also has a basic app to help you manage your insurance policies.
Where AAA stood out from the pack was in our quote comparison. This company quoted us the most affordable premiums, with sample prices as low as $517 per year (our highest quotes, from Farmers, rang in above $1,500). AAA splits its homeowners insurance into “YourHome,” which covers replacement costs to your home and your personal property, and “YourHome Advantage,” which includes additional options like identity theft coverage. While AAA is the cheapest, the other insurers on our list offer more comprehensive coverage packages, so keep that in mind as you compare options.
Farmers is highly rated by A.M. Best, JD Power, and Consumer reports, so the company is solid — but you might be able to find better options from another provider. It’s at the bottom of our list primarily because of its high rates; when we compared insurers, Farmers’ premiums were consistently higher than the competition. Farmers does offer discounts for people who open multi-line policies, install burglar or fire alarms, or replace their roof, but it still has fewer total discounts than Allstate or Liberty Mutual.
We were also less than thrilled with Farmers’ website and app. Its website isn’t as informative as Allstate or Liberty Mutual’s, and its app doesn’t include nearly as many features. You won’t be able to create a home inventory or upload claim damage photos.
Special mention goes to USAA, which caters exclusively to active military service members and veterans, as well as their families. The Golden State is home to 128,373 active duty military personnel. That’s more than anywhere else in the country and, if you’ve served or know someone who has, the company is definitely worth checking out.
USAA provides homeowners insurance that covers fire, theft, vandalism, as well as most weather-related events. The company is the second-highest rated homeowners insurance provider on Consumer Reports, with the highest marks in all categories including the claims process and the turnaround on claims settlement. USAA also holds a superior A++ score on A.M. Best, which means the company is financially stable enough to settle your claims.
Guide to Homeowners Insurance in California
You’ll still need to reach out to insurers for individual quotes, but you can get an idea of how their rates stack up by using the California Department of Insurance Homeowners Insurance Comparison Tool. This tool lets you select your city and county, your home’s age, and the amount of insurance you need. Then it shows you estimated rates by provider and deductible.
Here are the rates it gave us for a new home in Altadena with $500,000 worth of coverage and a $1,000 deductible:
|Insurance Company||Annual Premium|
Take some time to explore this tool; along with rates, it lets you view insurers’ optional coverages, discounts, and credits. You can also use it to search earthquake coverage rates, which you’ll probably need to purchase in addition to your primary homeowners insurance policy.
If you can’t find coverage, try the California FAIR Plan
Some insurers have stopped writing policies in areas prone to wildfires or other risks. If your home isn’t covered by another provider, you still might be able to get a policy under the California FAIR Plan. This state-sponsored program provides insurance as a last resort, and only after you’ve made a good-faith effort to seek other insurers — but it’s there if you need it. You’ll get basic dwelling and property coverage (including fire), and you can also add on coverage for windstorms and other perils.
If you want to access the FAIR Plan, you’ll need to apply through an authorized broker and make an annual effort to find other providers; even though you might not have any private insurers in your area this year, that could change in the future.
Review before you renew
Review your policy every time you renew it to make sure you’re getting the best rates and coverage. California insurers sometimes change the terms of their insurance policies, so stay on top of your coverage and don’t be afraid to switch insurers if you don’t like what you have. It’s worth it to shop around for the best rates and the best providers.