The Best Homeowners Insurance in California for 2021
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Earthquakes. Wildfires. Floods. California has its share of natural disasters, but one thing it doesn’t have? High homeowners insurance premiums.
At $1,224 per year, California’s average home insurance premium is less than the national average of $1,585, putting it in the middle of the pack compared to the rest of the U.S.
To insure a home in California, you’ll need to consider several of the state’s unique environmental risks, such as wildfires and earthquakes. These factors substantially impact how much you’ll pay for homeowners insurance.
NerdWallet analyzed rate and policy information from 26 companies to determine the best insurance options for California homeowners.
Best homeowners insurance companies in California
These companies sell homeowners insurance in California and are on NerdWallet's list of the Best Homeowners Insurance Companies for 2021:
Company | NerdWallet rating | Average annual premium |
|---|---|---|
Chubb | 5.0 NerdWallet rating | $1,840 |
Nationwide | 5.0 NerdWallet rating | $1,233 |
USAA* | 4.5 NerdWallet rating | $787 |
State Farm | 4.5 NerdWallet rating | $945 |
Travelers | 4.5 NerdWallet rating | $752 |
*USAA is available only to active military, veterans and their families. | ||
Here's a little bit more about the top insurers:
Chubb
Although Chubb is one of the most expensive insurers in the state, its standard policy includes coverage options for which others often charge extra. For example, homeowners who buy Chubb's Masterpiece policy can receive the full amount it costs to replace damaged or destroyed personal items rather than the items' depreciated value.
Nationwide
Like Chubb, Nationwide offers several features in its standard policy that many other companies do not. For example, if a part of your home is damaged or destroyed and you discover it needs to be brought up to current building codes during repairs, Nationwide may pay for the required upgrades (up to 10% of your total dwelling coverage).
USAA
If you're an active military member or a veteran, or are a family member of one, USAA offers several benefits that normally cost extra from other insurers. Identity theft coverage and replacement cost for damaged or stolen personal items are just two of the benefits available to policyholders in most states.
State Farm
State Farm's standard "increased dwelling limit" coverage may appeal to California homeowners because of the financial cushion it provides if you need to rebuild your home. As long as the home is insured for the amount State Farm estimates it will cost to replace it, State Farm provides up to an additional 20% of that amount should costs go up while rebuilding.
Travelers
Although Travelers is the cheapest option in California, its standard policy does not come with some of the coverage options provided by other insurers. Travelers does, however, offer unique add-ons such as green home coverage that can help cover the cost of using sustainable materials to rebuild or repair your home.
How much is homeowners insurance in California?
The average cost of homeowners insurance in the state of California is $1,224 per year, according to a NerdWallet analysis. However, considering California's size, your rate could vary a lot depending on where you live. The difference between the most and least expensive areas in California is over $650 per year.
However, living in one of California's largest metropolitan areas doesn’t necessarily mean you'll pay much more than the average rate. In some areas, you may even pay less.
Here are the average rates for the five largest metro areas in the state, according to the U.S. Census Bureau:
Metro area | Average annual premium |
|---|---|
Los Angeles-Long Beach-Anaheim | $1,335 |
San Francisco-Oakland-Hayward | $1,149 |
Riverside-San Bernardino-Ontario | $1,345 |
San Diego-Carlsbad | $1,169 |
Sacramento-Roseville-Arden-Arcade | $1,152 |
Biggest insurance companies in California
If you're looking for coverage from a company with a significant presence in California, these insurers have the largest market share in the state according to the most recent data from the National Association of Insurance Commissioners:
State Farm.
Farmers.
Liberty Mutual.
CSAA.
Allstate.
USAA*.
Auto Club of SoCal.
Mercury.
Nationwide.
Travelers.
*USAA is available only to active military, veterans and their families.
And this is how those insurers' average annual premiums stack up (note that Liberty Mutual's rate information was not available, so it is not included in the analysis):
Cheapest home insurance in California
California homeowners have many options for cheap homeowners insurance. In fact, 14 of the 26 analyzed companies offered premiums that overall were cheaper than the state average of $1,224. Those insurers were:
Company | Average annual premium |
|---|---|
Travelers | $752 |
Allstate | $768 |
USAA* | $787 |
Mercury | $803 |
American Strategic | $880 |
State Farm | $945 |
Armed Forces Insurance | $964 |
Auto Club of SoCal | $972 |
Pacific Specialty | $1,011 |
Grange Insurance Association | $1,012 |
CIG | $1,015 |
National General | $1,046 |
Farmers | $1,175 |
CSAA | $1,178 |
*USAA is available only to active military, veterans and their families. | |
California home insurance factors
Homeowners in California face unique circumstances that factor into decisions about home insurance. Some things to consider include:
Wildfires. California experienced over 10,000 wildfires in 2020, an average of more than 28 per day. Although wildfires are typically covered by standard home insurance policies, if you live in a high-risk area you may need to purchase additional coverage.
Earthquakes. A standard home insurance policy doesn’t cover earthquake damage, so California residents should consider adding a separate earthquake insurance policy. Homeowners can get it through a private insurer or turn to the California Earthquake Authority for coverage.
Flooding. California is particularly prone to flooding throughout the state, and homeowners insurance won’t cover flood damage. To make sure costs related to flooding are covered, homeowners in California can purchase flood insurance from the National Flood Insurance Program or a private insurer.
NerdWallet averaged rates for 40-year-old men and women from a variety of insurance companies in every ZIP code across the state. Sample homeowners were nonsmokers with good credit living in a single-family, two-story home built in 1983. They had a $1,000 deductible and the following coverage limits:
$300,000 in dwelling coverage.
$30,000 in other structures coverage.
$150,000 in personal property coverage.
$60,000 in loss of use coverage.
$300,000 in liability coverage.
These are sample rates generated through Quadrant Information Services. Your own rates will be different.
