California Homeowner's Insurance
The average cost of a California homeowner's insurance premium is $911, and includes 4 primary types of coverage. The policy insures against most of the perils your home faces. This type of policy is typically called a "broad policy" because it includes everything that is not listed under the exclusions portion of your policy. There are four primary types of coverage in the policy, and it is important that you understand what each type of coverage is meant for.
The dwelling is the primary occupied portion of the home. It is where your family lives, and where most of your personal property is probably located. Dwelling coverage will either pay for repairs or replacement of the home or its parts, such as water damage in a bathroom wall, or a roof that was torn off during a windy storm. If the garage is built into the structure of the dwelling it is considered to be part of the dwelling, but only if that is the case.
Any other building on the property is included in the other structures part of the policy. A fence around the property is an "other structure," but so is a storage shed, pump house or a garage that is not connected to the dwelling. Other structures can be decorative or functional, but must be free-standing constructions.
Personal property is everything you own that is kept on the property. Your wife's jewelry collection, your antique nautical equipment and the bunk beds in your kids' room are all part of your personal property, even the rugs on the floor and the pictures on the wall. Your wardrobe is part of your personal property, and so is your music and video collection. The problem is, you may have many thousands of dollars in personal property with a higher value than you are insured for. Most policies only insure personal property up to a percentage of the policy value, usually 10% or less.
Loss of Use
If you are not able to live in the home because of one of the covered perils, such as the roof caving in after a winter blizzard, then the money you have to spend to maintain your standard of living is covered under the "loss of use" portion of the policy. Your entire home does not have to be unusable, as might be the case after a kitchen fire. In that circumstance, your loss of use would include meals but not lodging. Keep all of your receipts; you will need them to validate your claim.
Average California Homeowner Insurance Rates vs. US
Cheaper California Home Insurance
Saving money on your homeowners insurance does not mean you have to skimp on coverage. Three basic areas where you can influence your insurance premiums are your deductibles, information about yourself and looking for other discounts that you qualify for.
Increase your Deductibles
The higher your deductibles, the lower your premiums will be. The danger in raising the deductible is that you must pay the deductible amount before the policy will pay out, so it is crucial that your deductibles are kept low enough that you can pay them out-of-pocket in an emergency.
Your credit score is important in determining the amount of your insurance premiums. Other personal information that will have an effect are things like your marital status (married people pay less), having more than one policy with the same insurance company, and quitting smoking to reduce the risk of house fires.
Look for Discounts
Everyone is eligible for some discounts, and some people qualify for most of them. Find out what discounts your home insurance company offers, and make certain that you are getting all of the breaks you deserve. The number and amount of discounts will vary by state, so you will have to familiarize yourself with what is being offered by your company of choice in your location of residence.
Home Characteristics Affecting California Insurance Rates
Your home also plays a part in determining what you pay to insure it. A home that is located in a zip code with a low crime rate will cost less than the same home in a high-crime area, for instance. Additionally, stone houses are less susceptible to insect infestations, decay and other dangers, making it less expensive to insure. If you have a large home, your rates will be higher than having a smaller one. The square footage of the home is a primary factor used to set individual home insurance premiums.
Defending Your Home Against Crime & Vandalism
California's crime rate is only slightly higher than the national crime rate. This does not mean you have nothing to worry about, but it does mean that your insurance company is not going to raise your premiums based on the local crime statistics. Things you can do to keep your home more secure and cheaper to insure include installing deadbolt locks, installing a monitored alarm system, or putting a fence around your property to keep unwanted visitors at bay.
Local Natural Disasters California Homeowners Should Consider Protecting Against
Each state has a different set of typical perils. Some states are more likely to experience a hurricane, and others are prone to earthquakes. In California, the risk of a tornado is relatively low, but the risk of floods or earthquakes is much higher than in other places.
California ranks 2 out of 51 for earthquake potential. What this means to your home insurance is that you really need to have earthquake coverage, and getting it will probably mean buying high-risk coverage through an insurance pool rather than buying it from the same company that handles you home insurance.
Flooding is extremely likely in parts of California at certain times of the year. Residents of the state filed 486 claims in 2009, compared to the national average of 46,621. Flood insurance is one extra type of coverage that you really cannot afford to do without.
Damage from hail is usually grouped with your wind damage or water damage coverage. The good news is that you are already covered under your standard policy, but the bad news is that you may not have enough coverage to pay for the replacement of your home and personal property. Review you insurance policy often to make sure it provides enough coverage.
California is prone to hurricanes, from June through November. Hurricanes are not specifically covered in your standard home insurance policy, but things such as water damage and wind damage are. Keep in mind that flooding and water damage are two different things, and that you will always have to buy flood insurance separately, not as part of your standard policy.
For a state the size of California, 6 tornadoes per year is hardly any, compared to 1,680 tornadoes scattered around the entire country in the same time period. Most of the damage caused by tornadoes comes from wind damage, and that is included in a standard home insurance policy. What is not included in a standard policy if the flood protection and localized flooding which is very often associated with tornadoes.
Each year, the nation experiences as many as 74,749 wildfires and a large percentage of those occur in California. A typical home insurance policy includes fire coverage of any type, but make sure your coverage is going to work for you before disaster strikes. If your coverage is for actual cash value, you'll probably have to shell out some additional money to get all the repairs and replacements done. If your policy is for full replacement value, then you've probably got the coverage you need in this respect.
California Homeowners Insurance Optional Coverage
Flood and earthquake damage are both major concerns in California, but there are other coverage you should consider as well. Personal injury liability coverage is an optional package that protects you against lawsuits or injuries suffered by other people on your property, as one example. And if you plan to have pets, it is a good idea to pick up pet insurance on your furry loved ones, just in case they become injured during a covered claim situation.
Important Contact Information
California Department of Insurance
Consumer Services Division
300 South Spring Street, South Tower
Los Angeles, CA 90013
Phone: (877) 927-4357
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