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Explanation of the FAIR Plan

Coverage for High-Risk Homes

FAIR Plans Help Cover Higher-Risk Properties

The fair plan and high-risk insurance.

  • Where To Get Insurance for a High-Risk Area

What Makes a Home High Risk?

  • If You Have Trouble Finding Home Insurance
  • Who Is Eligible for the FAIR Plan?

When To Look for FAIR Plan Insurance

  • Where To Find FAIR Plan Insurance State by State
  • How To Get Insurance in a High-Risk Area

FAIR Plan Administrator Phone Numbers by State

Frequently asked questions (faqs).

MoMo Productions / Getty Images

The Fair Access to Insurance Requirements (FAIR) Plan is a state-mandated program that provides fair access to insurance for individuals who are having trouble insuring their property due to the fact that insurers consider them high risk. The FAIR plan is a "shared market plan."

Key Takeaways

  • FAIR Plans provide insurance to people that would otherwise be denied insurance on their property due to being in a high-risk area or having other major problems.
  • High-risk homes include those in regions prone to natural disasters or in high-crime areas, residences in disrepair, or homes with many previous claims.
  • Extra steps may be needed in order to be eligible for a FAIR Plan, such as limiting your risk by installing alarm devices, water backup valves, or replacing your home's wiring.

FAIR Plans are state programs that are sometimes subsidized by private insurance companies. These plans often provide insurance to people who would otherwise be denied coverage on their property due to being in a high-risk area or having other related high-risk problems.

Your state insurance department can give you more information on its particular FAIR Plan, or you can check out the state-by-state list of where you can get help for the FAIR Plan insurance program below.

With high-risk insurance, the insurance company has decided that the risk of having claims in a specific location or area is high based on:

  • Geographic data
  • Maintenance
  • "Loss history" or having a high number of claims incidents for the location or specific home.

Where Do You Get Insurance for a High-Risk Area?

Standard insurers do not specialize in high-risk properties and therefore will often refuse to insure them by either not insuring in the first place or by refusing to renew a high-risk location once the insurance policy term is up. An insurance company's underwriting guidelines will usually dictate which risks they are comfortable with. You can get insurance for high-risk properties from specialty insurers, some of which may be non-admitted insurers. Non-admitted insurance companies will often think outside the box or specialize in risks that other insurers are uncomfortable with.

  • If you live in an area that is prone to natural disasters, like tornados , or where there is a high incidence of hurricanes or windstorms , your property may be considered high-risk.
  • If you live in an area that is prone to high crime levels, such as vandalism or theft.
  • If your home has not been renovated or is in disrepair.
  • If you have had many claims .

What To Do if You Have Trouble Finding Home Insurance

If you are purchasing your first home  or a new property and are having a hard time finding an insurance company to insure you, try asking your realtor whether they know of local insurance companies or brokers that will write policies in the area. Insurance brokers have access to many different insurance companies and will work to find you something.

You can also contact your local state insurance commissioner's office, and they will point you in the right direction. You may still be able to find a policy with a private insurer that is comfortable and offers good coverage . The FAIR Plan should be used as a last resort.

You can also try to negotiate: Consider the reasons that you are being refused insurance, and try negotiating with the insurance company. Very often, if you make adjustments or repairs, or consider higher deductibles , you may be able to obtain coverage. Make sure you try everything with a few standard insurers before going to the FAIR Plan.

Conditions To Be Eligible for the FAIR Plan

According to the Insurance Information Institute, even the FAIR Plan has conditions that must be met. Just because you have a high-risk home, it does not mean the FAIR Plan will accept you. You may be asked to limit the risk of fire, theft, or water damage by installing anti-theft or alarm devices, or you may be asked to install water backup valves or make repairs on your home, such as replacing or fixing a roof or your wiring. If these types of conditions would have made you eligible for standard insurance, you are probably better off doing your necessary repairs and sticking with a standard insurance company. Standard insurance companies are usually less expensive than high-risk insurers.

If you have exhausted all of the options outlined above, and you can't seem to find an insurance company to accept your risk, then you have the option of applying for insurance with the FAIR Plan. Keep in mind, however, that if the reason for a refusal to insure your property is not due to matters beyond your control, even the FAIR Plan has the right to refuse coverage if you do not adhere to the recommendations. The situation varies case by case, so the best idea is to contact them directly to discuss the conditions of the FAIR Plan as they apply to your situation. You may also be eligible for additional  insurance endorsements  that may improve the base coverage.

Where To Find FAIR Plan Insurance Help State by State

Alabama Insurance Underwriting Association

California FAIR Plan Association

Connecticut FAIR Plan

Insurance Placement Facility of Delaware

District of Columbia Property Insurance Facility

Citizens Property Insurance Corporation [Florida]

Georgia Underwriting Association

Illinois FAIR Plan Association

Indiana Basic Property Insurance Underwriting Association

Iowa FAIR Plan Association

Kansas All-Industry Placement Facility

Kentucky FAIR Plan Reinsurance Association

Louisiana Citizens Property Insurance Corporation

Maryland Joint Insurance Association

Massachusetts Property Insurance Underwriting Association

Michigan Basic Property Insurance Association

Minnesota FAIR Plan

Mississippi Windstorm Underwriting Association

Missouri Property Insurance Placement Facility

New Jersey Insurance Underwriting Association

New Mexico Property Insurance Program

New York Property Insurance Underwriting Association

North Carolina Joint Underwriting Association - FAIR Plan

North Carolina Insurance Underwriting Association - Coastal Property Insurance Pool

Ohio FAIR Plan Underwriting Association

Oregon FAIR Plan Association

Insurance Placement Facility of Pennsylvania

Rhode Island Joint Reinsurance Association

South Carolina Wind and Hail Underwriting Association

Texas FAIR Plan Association

Texas Windstorm Insurance Association

Virginia Property Insurance Association

Washington FAIR Plan

West Virginia Essential Property Insurance Association

Wisconsin Insurance Plan

How To Get Insurance When You Live in a High-Risk Area

If you have been unsuccessful in obtaining insurance for your home because it is designated as high risk, or you have been refused insurance, and you have already tried to negotiate with standard private insurers and have exhausted all other options, then you can contact the FAIR Plan administrator in your state to find out more information about the FAIR Plan and how to get insurance on your home.

Alabama: 334-943-4029

California: 213-487-0111

Connecticut: 860-528-9546

Delaware: 215-629-8800

District of Columbia: 202-393-4640

Florida: JUA 850-513-3700

Florida Windstorm Underwriters Association: 904-296-6105

Georgia: 770-923-7431

Hawaii: 808-531-1311

Illinois: 312-861-0385

Indiana: 317-264-2310

Iowa: 515-255-9531

Kansas: 785-271-2300

Kentucky: 502-425-9998

Louisiana FAIR Plan: 504-831-6930

Maryland: 410-539-6808

Massachusetts: 617-723-3800

Michigan: 313-877-7400

Minnesota: 612-338-7584

Mississippi: 601-981-2915

Missouri: 314-421-0170

New Jersey: 973-622-3838

New Mexico: 505-878-9563

New York: 212-208-9700

Ohio: 614-839-6446

Oregon: 503-643-5448

Pennsylvania: 215-629-8800

Rhode Island: 617-723-3800

South Carolina: 803-737-6180

Texas: 512-899-4900

Virginia: 804-591-3700

Washington: 425-745-9808

West Virginia: 215-629-8800

Wisconsin: 414-291-5353

What does FAIR plan insurance cover?

FAIR Plans do not cover as many perils as a standard homeowners insurance policy, but the exact coverages vary by state. All FAIR plans cover losses due to fire, vandalism, riots, and windstorms. In California, coverage also includes losses for brush fires. Georgia and New York both offer wind and hail coverage for some coastal areas. A dozen states also include liability coverage.

How much is high-risk insurance for a home?

Premium rates for FAIR Plans vary by state, coverage area, and your risk level, but they can be significantly higher than the rates for standard policies.

Insurance Information Institute. " What if I Can't Get Coverage? " Accessed Jan. 6, 2022.

Things to Know About California's New Proposed Rules for Insurance Companies

California's insurance commissioner says he will write new rules for insurers in the nation's most populous state

Things to Know About California's New Proposed Rules for Insurance Companies

Adam Beam

California Insurance Commissioner Ricardo Lara speaks during a news conference in a Sacramento, Calif., on Thursday, Sept. 21, 2023. Lara announced a new plan aimed at keeping insurance companies from leaving the wildfire-prone state. (AP Photo/Adam Beam)

SACRAMENTO, Calif. (AP) — Months after California 's home insurance market was rattled by major companies pausing or restricting their coverage, the state's top regulator said Thursday that he would write new rules aimed at persuading insurers to continue doing business in the nation's most populous state.

Seven of the 12 largest insurance companies by market share in California have either paused or restricted new policies in the state since last year.

Some state lawmakers tried to come up with a bill that would address the issue. But they failed to reach an agreement before the Legislature adjourned for the year last week.

Here's a look at what California Insurance Commissioner Ricardo Lara proposed and how it would affect the state's insurance market:

WHAT ARE THE RULES FOR INSURANCE COMPANIES?

Unlike most states, California heavily regulates its property insurance market.

Photos You Should See

A farmer equipped to face police tear gas poses for a photo as Indian farmers who have been protesting for a week to demand guaranteed crop prices wait to march to the capital near Shambhu border that divides northern Punjab and Haryana states, some 200 kilometers (120 miles) from New Delhi, India, Wednesday, Feb.21, 2024. The protesting farmers began their march last week, but their efforts to reach the city have been blocked by authorities. (AP Photo/Altaf Qadri)

In 1988, California voters approved Proposition 103. It said insurance companies had to get permission from the state Department of Insurance before they could raise their rates.

When setting their rates, insurance companies cannot consider current or future risks to a property. They can only use historical data.

Insurance companies also buy insurance themselves, a process known as reinsurance. Companies are not allowed to consider their reinsurance costs when setting rates for California homeowners.

WHAT IS THE PROBLEM?

Climate change has intensified wildfires in California. Of the 20 most destructive fires in state history, 14 have occurred since 2015, according to the California Department of Forestry and Fire Protection.

Insurance companies say that because they can't consider climate change in their rates, it makes it difficult to truly price the risk for properties. They also complain that they are having to pay more for reinsurance, which they cannot recoup from ratepayers.

Many insurers have responded by pausing or restricting new business in the state. They've also opted to not renew insurance coverage for some homeowners.

When homeowners who need insurance can't get it from private insurance companies, they must purchase policies from the California Fair Access to Insurance Requirements (FAIR) Plan. The plan is primarily funded by policies sold to customers. Insurers only pay into the fund if it is insolvent or to keep it from going insolvent.

The number of people on the FAIR Plan has nearly doubled in recent years. Insurance companies are worried about this trend. If the fund were to go insolvent, insurance companies would have to cover the cost.

WHAT IS THE STATE'S PLAN?

California Insurance Commissioner Ricardo Lara said he will write new rules that would let insurers consider climate change when setting their rates. He has also pledged to consider rules that would let them consider some of their reinsurance costs.

The rules requiring insurance companies to get permission from the state to raise their rates would not change.

Lara said the state will only let companies use these new rules if they write more policies for people who live in areas threatened by wildfires. He said this means companies must write policies in these areas of no less than 85% of their statewide market share. That means if a company insures 20 out of 100 homes, the company would have to also write 17 policies for homeowners in an area threatened by wildfires.

HOW WILL THIS AFFECT RATES?

Some consumer groups, including the California-based Consumer Watchdog, fear that allowing insurance companies to consider climate change in their rates will lead to dramatically higher prices for homeowners.

But Lara said the new rules could also benefit homeowners. He said insurance companies could also consider improvements that owners have made to make their homes more resistant to wildfires. Companies could also consider the billions of dollars in public money that the government has spent to better manage forests and reduce wildfire risks.

If the rules work and more companies stay in California's insurance market, it could increase competition for customers — potentially holding rate increases in check.

WHEN WOULD THE RULES TAKE EFFECT?

It would take a while for state regulators to write the rules. The process includes lots of time for insurance companies and consumer groups to give their input. Lara said he has given the department a deadline of December 2024 to have the new rules completed.

This story has been corrected to say that the FAIR plan is primarily funded by policies sold to customers. Insurers only pay into the fund if it is insolvent or to keep it from going insolvent.

Copyright 2023 The  Associated Press . All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Tags: Associated Press , business , wildfires , California

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Home Insurance

Best homeowners insurance in California February 2024

Amy Fontinelle

Kara McGinley

Kara McGinley

“Verified by an expert” means that this article has been thoroughly reviewed and evaluated for accuracy.

Updated 6:01 a.m. UTC Feb. 14, 2024

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The best homeowners insurance companies in California are still writing new policies at reasonable prices in a state that poses serious challenges.

Insurers in the state took a major hit from catastrophic wildfire losses in 2017 through 2022. Since then, they’ve faced regulatory barriers to charging premiums that reflect heightened risks from climate change, inflation and homebuilding in fire-prone areas.

Unsurprisingly, insurance companies have responded by reducing their footprints in California. If they can’t stay profitable, they won’t be able to pay anyone’s claims.

More than 100 insurance companies still offer coverage, but major mid-market insurers like State Farm and Allstate have stopped issuing new coverage and are only renewing existing policies. Farmers has also limited how many new policies it will write in California.

Wealthy California homeowners aren’t immune to these changes, either. High-end insurers AIG and Chubb pulled back in 2022.

Why trust our home insurance experts

Our team of home insurance experts evaluates hundreds of insurance products and analyzes thousands of data points to help you find the best product for your situation. We use a data-driven methodology to determine each rating. Advertisers do not influence our editorial content. You can read more about our methodology below.

  • 92 rates reviewed.
  • 23 insurers evaluated.
  • 5 levels of fact-checking.

Top-rated homeowners insurance in California in 2024

Travelers is the best home insurance company in California, according to our analysis, due to its affordable rates and low customer complaint levels.

  • Travelers .

Travelers

Annual average rate in CA

Customer complaint level, am best rating, what you should know.

Travelers has been around since the 1800s. Its first product was accident insurance, and today it offers a wide range of insurance products for individuals and businesses. California was the company’s largest property and casualty market in 2022, representing over 10% of the company’s business.

Pros and cons

  • Cheapest rates of our top California home insurers.
  • Offers extended replacement cost coverage.
  • Offers replacement cost coverage for contents.
  • Very low customer complaint level.
  • Online quote tools may tell you to contact a local independent agent to get a quote.
  • May ban or restrict home insurance coverage for certain dog breeds.

More details

Additional coverage and upgrades

  • Extended replacement cost coverage for dwellings: Provides a higher reimbursement for your home if the claim exceeds your initial dwelling coverage limit.
  • Replacement cost coverage for contents: This coverage ensures you’re paid out at today’s prices if your belongings are damaged by a covered problem.
  • Valuable Items Plus endorsement: This provides a higher level of coverage for your high-value personal items, collectively. Standard home insurance reimburses you a limited amount — like $1,500 — if certain types of valuable items, like jewelry, are stolen.
  • Personal articles floater: This is basically the same as Valuables Items Plus, but it offers a higher level of coverage for individual high-value personal items.
  • Water backup and sump pump discharge or overflow coverage: Covers damage caused by dirty water or untreated sewage when your sump pump fails or overflows, your drain backs up or the neighborhood sewer lines get clogged. This type of damage is excluded from standard home insurance.
  • Identity fraud coverage: Provides up to $25,000 for expenses associated with restoring your identity after it is stolen or compromised.
  • Green home coverage: Can provide additional reimbursement to rebuild with environmentally friendlier materials after a covered loss.
  • Umbrella insurance: Provides up to $10 million in excess liability coverage beyond what’s provided by your property and vehicle policies.

Discounts available

  • Automatic sprinklers: 5%.
  • Claim free on renewal: 11% to 30%.
  • Protective devices (burglar and fire alarms, smart home devices): 1% to 14.5%.
  • Auto + homeowners bundle: 5% to 17%.
  • New home: 10%.
  • Community-level wildfire mitigation: 1% to 2%.
  • Property-level wildfire mitigation: 3% to 5%.

USAA

Military members get additional perks when purchasing homeowners insurance through USAA, including coverage for military equipment and deductible waivers if personal property is lost or damaged due to war.

USAA will also cover the cost of replacing or repairing your uniform with no deductible while you’re on active duty. The company’s focus on the unique needs of military members and their families makes it the best homeowners insurance option for those who serve.

Learn more: USAA home insurance review

  • Has a strong reputation for customer satisfaction.
  • Only available for the military community and eligible family members.

More detials

Additional coverages

For an additional premium, you can get further protection through USAA in several areas:

  • Cellphone: Through ProtectCELL, USAA connects policyholders with optional loss, theft and accidental damage coverage for cell phones.
  • Computer: After meeting a $250 computer coverage deductible, you’ll get reimbursed for repairing or replacing accidental damage to computers and tablets.
  • Earthquake: Offers earthquake coverage through the California Earthquake Authority.
  • Flood insurance: USAA can help you get coverage through the National Flood Insurance Program. All standard homeowners policies, not just those from USAA, exclude flood damage.
  • Home Protector: Get reimbursed up to 25% more for your claim if building ordinances or laws require you to rebuild to a higher standard after a covered loss.
  • Replacement cost coverage for contents: This coverage is superior to actual cash value coverage, which only reimburses you for the depreciated value of your possessions.
  • Umbrella insurance: This coverage is a separate policy that can add up to $5 million in personal liability coverage beyond what your homeowners policy provides, which may only be $300,000.
  • Valuable Personal Property: This coverage is also a separate policy and provides extra protection against accidental damage or loss to pricey items such as jewelry, cameras, musical instruments and fine art. It has no deductible.

Discounts and credits available

In California, USAA offers homeowners the following discounts and credits that can reduce premiums:

  • Automatic sprinklers: Up to 10% savings.
  • Claim free on renewal: Up to 10% savings.
  • Multi-policy: Up to 20% savings when you insure your vehicle with USAA.
  • Central or police station burglar alarm: Up to 5% credit on homeowners insurance.
  • Central or police station fire alarm: Up to 5% credit.
  • Community-level mitigation: Up to 20% Firewise Community credit on homeowners insurance.

CSAA

Homeowners insurance from the California State Automobile Association (CSAA) may be an option if you live in Central or Northern California. CSAA offers coverage in 44 of California’s 58 counties, but none of them is in Southern California. It’s affiliated with AAA, the American Automobile Association.

CSAA does not offer homeowners insurance in these 14 counties:

  • Los Angeles
  • San Bernardino
  • San Luis Obispo
  • Santa Barbara

However, your local equivalent may offer homeowners insurance in these areas. For example, AAA appears to offer homeowners insurance in Los Angeles County.

  • Very low customer complaint rating.
  • Not available in Southern California and parts of Central California.
  • Doesn’t offer extended or guaranteed replacement cost coverage.
  • Replacement cost coverage for contents: Reimburses you for the cost to replace your damaged personal items with new ones after a covered loss.
  • Earthquake: Adds coverage for damage caused by earth movement.
  • Flood: Provides coverage against water that enters your home from the ground up from causes such as heavy storms.
  • Identity theft: Provides up to $15,000 to deal with restoring your identity.
  • Building code coverage: Increases your claim payment if the latest codes require you to rebuild to a higher (and more expensive) standard.
  • Increased limits for valuable personal items: Boosts your coverage for jewelry and watches in case of theft.

In California, CSAA policyholders can enjoy several discounts and credits to reduce their premiums:

  • Claim free on renewal: Up to 10%.
  • Multi-policy (auto + home bundle): 13%.
  • New home: Up to 32%.
  • Persistency/renewal: Up to 10%.
  • Senior citizen: Up to 10%.
  • Central station or police station burglar alarm: Up to 10%.
  • Local burglar alarm: Up to 5%.
  • Community-level wildfire mitigation: Up to 5%.
  • Property-level wildfire mitigation: Up to 15%.

Farmers

Farmers was founded in Los Angeles in 1928 to provide preferred auto insurance rates to farmers and ranchers. Today, Farmers is made up of three companies that are owned by their policyholders.

Farmers has limited how many new policies it will write in California. It’s unclear whether you’ll be able to get a homeowners policy from Farmers or how to increase your odds of being one of the lucky ones.

We found that the best way to get a quote was to use the “Find an Agent” tool, then search for your location, pick an agent and click on “Get a Quote” instead of requesting a quote through the main homeowners insurance page.

Learn more: Farmers home insurance review

  • Find a local agent through the website.
  • Provides wildfire mitigation response services that may protect your property during a wildfire if resources are available.
  • Offers extended replacement cost coverage for your dwelling and replacement cost coverage for your contents.
  • May not be available depending on when you apply and where you live.
  • Main online quote tool may tell you to contact a local Farmers agent or refer you to another provider.

Farmers Smart Plan Home lets you customize your coverage with the following options:

  • Extended replacement cost: Pays up to 25% more than your policy limit under certain conditions, such as a widespread disaster that pushes rebuilding costs up.
  • Sewer and drain water damage: Reimburses you for losses related to water or sewage entering your home through waste pipes.
  • Scheduled personal articles: Lets you insure valuable individual items for higher amounts than your homeowners policy ordinarily allows in case of theft, and covers more types of loss.
  • Building Ordinance or Law: Increases your claim payment if building codes require additional repairs related to a covered loss.
  • Umbrella insurance: Provides excess liability coverage beyond what your homeowners policy provides. Coverage is available in $1 million increments up to $10 million.
  • Flood insurance: Farmers can help you get a National Flood Insurance Program policy.
  • Earthquake insurance: Farmers can help you get a California Earthquake Authority policy.

These are some of the premium reductions you could qualify for with a Farmers home insurance policy in California:

  • Automatic earthquake gas line shutoff: Discount of 2% for installing a device that cuts off the flow of natural gas to your home after an earthquake of a certain magnitude to reduce the risk of fire and explosion.
  • Claim-free: Discount of 1% to 30% at renewal if you haven’t filed a claim in at least three years.
  • Multi-policy: Discount of 25% for also insuring your vehicle with Farmers.
  • New home: Discount of up to 48% for having a house that was built in the past 14 years.
  • Protective devices: Credits for having a burglar alarm that reports to a central station or police station (20%), local burglar alarm (6%), security system or internal automatic sprinklers (15%).
  • Earthquake insurance: You may enjoy lower premiums if you have a California Earthquake Authority policy on your house.
  • Declining Deductibles: Lowers your deductible each year you remain a customer.
  • Wind mitigation: Potential discounts or credits for fire-proofing your property.

How much does homeowners insurance in California cost?

Here’s the average annual cost of a home insurance policy with $350,000 in dwelling coverage in California, by company. Keep in mind that some insurers only offer coverage in certain areas of the state. 

Homeowners insurance California cost comparison

Methodology

Our home insurance experts evaluated 23 insurers to determine the best homeowners insurance companies in California based on the availability of new policies and reinsurance, average home insurance rates for Californians and consumer complaints against each company using the National Association of Insurance Commissioners Complaint Index. Each category was assigned a different weight, adding to a score of 100.

Rates: 75 points. We analyzed home insurance rates from Quadrant Information Services. The average rates are based on policies:

  • For a 45-year-old homeowner with a good credit score and no claims history.
  • For a 2,500-square-foot house constructed in 2020.
  • Dwelling coverage amounts of $200,000, $350,000, $500,000 and $750,000.
  • Other structures coverage limit of 10% of dwelling coverage limit.
  • Personal property coverage limit of 50% of dwelling coverage limit.
  • Loss of use coverage limit of 10% of dwelling coverage limit.
  • Medical payments to others coverage limit of $1,000.
  • Personal liability coverage limit of $100,000.
  • A $1,000 deductible.

Consumer complaints: 25 points. We collected complaint data from the National Association of Insurance Commissioners (NAIC), which shows the volume of home insurance consumer complaints against each company to state insurance departments.

Why some companies didn’t make the cut

Insurance companies that had significantly higher rates and/or consumer complaints than the California average did not make our rating. If an insurance company stopped selling home insurance or renewing its home insurance policies to all residents in California, it didn’t make the cut. We didn’t include any companies that received lower than a 2-star rating.

Have home insurance rates increased in California?

Yes. California homeowners insurance rates increased from an average of $1,070 in 2017 ($1,190 in 2021 dollars) to almost $1,460 in 2021 — a 23% increase, according to California Department of Insurance Data published by the San Francisco Chronicle.

Homeowners in some high-risk wildfire areas who don’t qualify for regular home insurance coverage may have to purchase two policies — a California FAIR Plan policy and a difference in conditions policy — to get the equivalent of an HO-3 policy, the most common type of homeowners insurance .

How to save money on homeowners insurance in California

Insurers say that California’s regulatory climate has made the state a less hospitable place to offer coverage. State Farm and Allstate both stopped writing new home insurance policies in California. The problems with insurers leaving the state or temporarily not offering new policies — forcing more and more homeowners to purchase expensive coverage of last resort — largely relate to wildfires.

There are common discounts you may qualify for, like:

  • Bundling auto and home insurance .
  • Security and protective devices.
  • Claims-free.
  • Paperless billing. 

So, aside from doing the usual things like shopping around and comparing home insurance quotes , some California homeowners may be able to save money on homeowners insurance by carefully evaluating their property’s wildfire risk. 

Insurers are increasingly offering lower rates for fire-hardened houses and neighborhoods. Programs like FireWise USA and Wildfire Prepared Home help communities fireproof their houses to prepare for California wildfire season . If you pass an inspection with these programs, your insurer may offer you a discount. 

What does homeowners insurance cover in California?

Standard home insurance covers the structure of your house if it is damaged by any problem, unless it’s specifically listed as an exclusion in your policy. An example of excluded damage would be flood damage. 

Here’s how the coverages in a home insurance policy work. 

Dwelling 

This coverage pays to repair damage to the structure of your house, unless it’s listed as an exclusion. It’s recommended that you have enough dwelling coverage to rebuild your house from the ground up after a covered disaster. 

Other structures

This coverage pays to repair damage to other structures on your property, like a shed or pool house.

Personal property

This pays to replace your belongings if they’re destroyed by a covered disaster, like a wildfire.

With standard home insurance, your belongings are covered if damaged by 16 listed problems, or perils, in your homeowners policy. 

  • Fire and lightning.
  • Windstorm and hail.
  • Explosions.
  • Riot or civil commotion.
  • Damage caused by aircraft (not your own).
  • Damage caused by vehicles (not your own).
  • Vandalism or malicious mischief.
  • Theft and home break-in. 
  • Volcanic eruption.
  • Falling objects.
  • Weight of snow, sleet or ice. 
  • Accidental discharge or overflow of water or steam.
  • Sudden and accidental tearing apart, cracking or burning.
  • Sudden and accidental damage from an electrical current (like a power surge in some cases).
Tip: When filing a property damage claim, your deductible will be subtracted from the claim payout. The higher your deductible is, the cheaper your home insurance payments will be, but the less you’ll be reimbursed in the event of a claim. 

Loss of use

Also called additional living expenses, loss of use coverage pays for things like temporary housing, restaurant meals and pet boarding if you temporarily need to stay elsewhere while your house is being rebuilt after a covered disaster. 

If you’re at fault for someone’s injury or damaged property, liability coverage can pay for their medical bills or repair fees. It can also pay for your legal expenses and settlements if you’re taken to court over the matter, like if your dog attacks someone at the park and they sue you. You can typically get $100,000 to $300,000 in liability coverage. 

Medical payments to others

This pays for someone else’s more minor medical expenses, regardless of who was at fault for the accident. You can typically get up to $5,000 in medical payments to others coverage. 

What is not covered under homeowners insurance in California?

No homeowners insurance policy will protect your property against every possible risk. Home insurance doesn’t cover the following problems, however you may be able to purchase coverage add-ons or separate policies for some of them. 

  • Earth movement: Damage caused by earthquakes and certain types of earth movements, such as mudslides. You may be able to add earthquake coverage or purchase earthquake insurance .
  • Flooding: Home insurance never covers flood damage, including stormwater runoff, overflowing rivers or streams, hurricane flooding and more. You will need flood insurance to be financially protected against flood damage. 
  • Fungus: Home insurance doesn’t cover maintenance issues. Fungus and rot are not covered because they’re considered avoidable with general upkeep. 
  • Neglect: Home insurance doesn’t cover damage you could have prevented by taking better care of your home.
  • Water or sewer backup: Home insurance doesn’t cover damage that occurs when your sump pump fails, your drain backs up or the neighborhood sewer lines get clogged and you end up with dirty water or untreated sewage in your home.

Homeowners insurance typically excludes damage caused by flood, mudslide and debris flow unless, California Department of Insurance Commissioner Ricardo Lara says, these disasters “are directly or indirectly caused by a recent wildfire or another peril covered by the applicable insurance policy.” For more information, see the state’s Department of Insurance fact sheet on flood, mudflow, mudslide, landslide or sinkhole losses after a wildfire.

Common insurance risks for California homeowners

California homeowners face many natural disaster risks — and some of them require supplemental insurance. A tool called Risk Factor by First Street Foundation can help you see the potential losses your California home faces from risks, such as the following.

Thirteen of California’s most destructive wildfires have occurred since 2017, destroying nearly 50,000 structures in Napa, Sonoma, Butte and many other counties. Wildfires are covered by homeowners insurance , but if you live in a high-risk area, you may struggle to find home insurance or have limited coverage options. 

Because wildfires obliterate homes, take years to recover from and drive up demand for contractor labor, building materials and remaining housing, California homeowners should consider the value provided by extended replacement cost and building code upgrade coverage for their dwellings, replacement cost coverage for their belongings and generous additional living expense limits.

You may also want to consider taking steps to fireproof your house as many insurers offer discounts and credits for such measures. 

Earthquakes

All California homeowners are at risk of earthquake damage, but earthquakes aren’t covered by homeowners insurance. If you want coverage, you can get a California Earthquake Authority policy or a private earthquake insurance policy .

Everyone is at risk of flooding — it’s just a question of how much risk. If your home is in an area the federal government has designated as high risk, and if you have a mortgage, you’ll typically be required to carry flood insurance . Otherwise, it’s up to you to evaluate your risk and decide how much coverage, if any, to purchase. Keep in mind that federal flood maps don’t always provide an up-to-date or comprehensive assessment of your home’s flood risks.

Many people don’t realize this until it’s too late, but flooding is not covered by homeowners insurance. While coverage is available through the National Flood Insurance Program (NFIP), many California homeowners would find its $250,000 dwelling policy limits inadequate if faced with a major loss. Private flood insurance companies offer higher coverage limits that may be suitable depending on your needs. 

Mudflows, mudslides, debris flows and landslides

None of these disasters are typically covered by homeowners insurance in California — unless you can prove that a problem covered by these home insurance, such as a wildfire or flood, was the “efficient proximate cause.” It’s a battle you could have to fight in court.

For protection against these risks, you may want to purchase a difference in conditions policy from a surplus lines insurance company. One policy can cover multiple risks — landslides, mudflows, earthquakes and flooding, for example. This arrangement may provide more comprehensive and cost-effective coverage than cobbling together separate policies.

How to find the best home insurance company in California

Given the additional challenges with insuring a home in California, these tips may be especially helpful when you’re trying to find the right home insurance company.

  • Get competing quotes. No matter which strategy you use to find homeowners insurance, make sure you compare home insurance quotes from multiple companies — and make sure each quote is for the same amount of coverage, same type of policy and has the same deductible if you want to make an accurate price comparison. You won’t always be able to make apples-to-apples comparisons because some companies offer different levels and types of coverage than others, but do your best.
  • Ask your neighbors who they use. If you’re struggling to find coverage, consider asking neighbors who they insure with. Don’t put too much weight on whether your neighbors are happy with their premiums. Your premiums won’t be the same as theirs. You’re just trying to get a sense of your options. Keep in mind, however, that your neighbors’ policies may be with insurers that aren’t currently offering new policies in your area (or anywhere in the state).
  • Work with an insurance broker. A broker can help you compare policies from different California home insurance companies. Ask how many insurers they work with to get a sense of how competitive of an offer they may be able to bring you. The insurance company you choose will pay your broker for this service; you won’t owe the broker anything. A broker may be especially helpful if you’re limited to the FAIR plan and need a solid difference-in-conditions policy.

Best home insurance companies in California FAQs

By direct premiums written, State Farm was the largest home insurer in California in 2022 according to the Insurance Information Institute. However, as of May 26, 2023, State Farm decided to temporarily stop offering new homeowners policies in the state. Farmers is the second largest home insurance company in California, followed by CSAA.

Travelers has the best cheap home insurance in California according to our analysis, followed by CSAA. If you’re looking for cheap homeowners insurance , you might want to start with these companies. 

Just keep in mind that factors like your location, insurance score and coverage decisions will influence your premiums, so the companies that are cheapest on average may not be cheapest for you. Ideally, you’ll look for the policy that offers the best value for the coverage you want — which won’t necessarily be the cheapest.

No, California does not require homeowners to carry homeowners insurance. If you have a mortgage, however, your mortgage servicer will require you to carry enough homeowners insurance to rebuild your home in case of a total loss. Also, if your property is in a high-risk flood zone according to federal flood maps, your lender will require you to carry flood insurance .

No. Unlike auto insurance requirements for vehicle owners, the state of California does not impose minimum insurance requirements on homeowners. It’s up to you to determine what coverage you need, which may include homeowners, earthquake and flood insurance.

Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.

Blueprint has an advertiser disclosure policy . The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.

Amy Fontinelle

Amy Fontinelle has more than 15 years of experience helping people make informed decisions about their money, whether they’re refinancing a mortgage, buying insurance or choosing a credit card. As a freelance writer trained in journalism and specializing in personal finance, Amy digs into the details to explain the products and strategies that can help (or hurt) people seeking greater financial security and wealth. Her work has been published by Forbes Advisor, Capital One, MassMutual, Investopedia and many other outlets.

Kara McGinley is deputy editor of insurance at USA TODAY Blueprint and a licensed home insurance expert. Previously, she was a senior editor at Policygenius, where she specialized in homeowners and renters insurance. Her work and insights have been featured in MSN, Lifehacker, Kiplinger, PropertyCasualty360 and more.

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The Best Home Insurance in California for 2024

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Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

Earthquakes. Wildfires. Floods. California has its share of natural disasters, which means it’s important to find the best homeowners insurance to cover your home.

The average cost of homeowners insurance in California is $1,300 per year, or $108 per month. For comparison, the national average is $1,820 per year. NerdWallet analyzed rate and policy information from several companies to determine the cheapest and best insurance options in California.

Note: Due to underwriting practices and market volatility, some companies in this article may no longer write new policies in your area.

Our writers and editors follow strict editorial guidelines to ensure fairness and accuracy in our writing and data analyses. You can trust the prices we show you because our data analysts take rigorous measures to eliminate inaccuracies in pricing data and may update rates for accuracy as new information becomes available.

We include rates from every locale in the country where coverage is offered and data is available. When comparing rates for different coverage amounts and backgrounds, we change only one variable at a time, so you can easily see how each factor affects pricing.

Our sample homeowner had good credit, $300,000 of dwelling coverage, $300,000 of liability coverage and a $1,000 deductible.

The best homeowners insurance in California

If you’re looking to buy homeowners insurance from a well-rated brand, consider one of these insurers, all of which have a NerdWallet star rating of 4.5 or higher.

» MORE: The best home insurance companies

More about the best home insurance companies in California

See more details about each company to help you decide which one is best for you.

insurance-product-card-logo

Coverage options Ratings are based on the number of coverage options a company offers in comparison to other insurers.

Discounts Ratings are based on the number of discounts a company offers in comparison to other insurers.

NAIC complaints Ratings are based on complaints to state regulators relative to a company’s size, according to three years’ worth of data from the National Association of Insurance Commissioners. NerdWallet conducts its data analysis and reaches conclusions independently and without the endorsement of the NAIC.

  • Significantly fewer consumer complaints than expected for a company of its size.
  • Standard coverage includes features that many companies only offer as extras.
  • Large number of discounts.
  • Most consumers aren't able to get a quote online and will instead need to contact a local agent.

Chubb generally serves affluent policyholders with high-value homes, offering lofty coverage limits and plenty of perks. For example, the company covers water damage from backed-up sewers and drains, and pays to bring your home up to the latest building codes during reconstruction after a claim. (Many insurers charge more for these types of coverage.)

California homeowners can also sign up for free Wildfire Defense Services. These services include personalized recommendations for protecting your home and deployment of firefighters to your house if a wildfire is approaching.

Learn more with our Chubb homeowners insurance review .

  • User-friendly features on website and app.
  • Discounts for eco-friendly homeowners.
  • Draws fewer consumer complaints than expected for a company of its size.
  • Doesn’t insure mobile or manufactured homes.

Travelers offers a robust online experience. You can use the website to get a homeowners insurance quote, file and track claims, make payments and learn about insurance basics.

Its coverage offerings are similarly strong. For example, you may be able to add extra coverage in case the dwelling limit on your home isn’t enough to rebuild your house after a disaster. One unique option is Travelers’ green home coverage, which pays extra if you want to use eco-friendly materials when repairing or rebuilding your home after a covered claim.

Learn more in our Travelers homeowners insurance review .

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  • Offers some coverage standard that other companies charge extra for.
  • Many discounts available.
  • Website offers lots of useful features and information.
  • Doesn't insure mobile or manufactured homes.

Nationwide’s standard homeowners policies include ordinance or law coverage, which pays to bring your home up to the latest building codes after a covered claim. They also include coverage for unauthorized credit or debit transactions. For an extra cost, you may be able to add coverage for things like water backup, identity theft and stronger materials to replace your roof.

The Nationwide website offers plenty of ways to manage your policy, including filing and tracking claims, paying bills and getting quotes.

Learn more with our Nationwide homeowners insurance review .

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Cincinnati Insurance

  • Various coverage options.
  • Far fewer complaints than expected for a company of its size.
  • Has special coverage packages for higher-value homes.
  • No online quotes.

Cincinnati Insurance sells homeowners policies through independent agents, with various options for standard and high-value homes. You may be able to add coverage for things like identity theft, personal cyberattacks or certain types of water damage.

Cincinnati may offer you a discount for bundling home and auto insurance, having a newer home or installing a centrally monitored alarm system.

Learn more with our Cincinnati Insurance homeowners insurance review .

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  • Policies include standard coverage that often costs extra elsewhere.
  • Far fewer customer complaints to state regulators than expected for a company of its size.
  • Average rates are below the national average, according to NerdWallet’s analysis.
  • Available only to active military members, veterans and their families.

USAA sells homeowners insurance to veterans, active military members and their families. If that description fits you, you may want to consider a USAA policy. That’s because the company’s homeowners insurance has certain features that other insurers may charge extra for.

For example, USAA automatically covers your personal belongings on a “replacement cost” basis. Many companies pay out only what your items are worth at the time of the claim, which means you may not get much for older items. USAA pays enough for you to buy brand-new replacements for your stuff.

Learn more in our USAA homeowners insurance review .

How much does homeowners insurance cost in California?

The average cost of homeowners insurance in California is $1,300 per year, or about $108 per month. That’s 29% less than the national average of $1,820.

The amount you pay will vary depending on where you live in the state. For example, the average cost of homeowners insurance in Los Angeles is $1,645 per year, while Sacramento homeowners pay $1,170 per year, on average.

Average cost of homeowners insurance in California by city

» MORE: What’s the average cost of homeowners insurance?

The cheapest home insurance in California

Here are the insurers we found with average annual rates equal to or below the California average of $1,300.

» MORE: Get the best cheap homeowners insurance

What you need to know about California homeowners insurance

Homeowners in California face unique circumstances that factor into decisions about home insurance.

California wildfires have caused billions of dollars of damage to homes and other buildings across the state over the past few years.

Several insurance companies offer discounts for California homeowners who have made efforts to reduce the risk of fire on their property, according to the California Department of Insurance [0] California Department of Insurance . Insurers Currently Offering Discounts . Accessed Dec 15, 2023. View all sources . Such efforts could include things like rebuilding your roof with fire-resistant materials and limiting vegetation near your home.

Most homeowners policies cover fire and smoke damage, but insurers may be reluctant to cover those in high-risk areas. California’s insurance commissioner has issued several moratoriums to keep insurers from dropping the policies of homeowners affected by recent fires. But once those moratoriums expire, you could find yourself scrambling for coverage.

If you have trouble finding a policy, you can turn to the California FAIR Plan, the state’s insurer of last resort. FAIR Plan coverage is currently limited, paying only for damage due to fire, lightning, smoke and internal explosions.

The insurance commissioner has ordered the FAIR Plan to offer more comprehensive coverage, similar to a traditional homeowners policy, but the change has been tied up in litigation. In the meantime, a “difference in conditions” policy can help fill the coverage gaps. An independent insurance agent can help you find one.

Learn how to protect your home from climate change , including wildfires.

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 one through a private insurer or turn to the California Earthquake Authority for coverage. Read our guide to earthquake insurance .

California is prone to flooding throughout the state, and homeowners insurance won’t cover flood damage. To cover costs related to flooding, homeowners can purchase flood insurance from the National Flood Insurance Program or a private insurer.

Not sure if you’re at risk for flooding? Enter your address into the Federal Emergency Management Agency's flood maps or visit RiskFactor.com , a website from the nonprofit First Street Foundation.

» MORE: How to choose the best flood insurance company

California Department of Insurance

If you want to file a complaint against your insurance company or get more information about your rights as a policyholder, the California Department of Insurance may be able to help. The department’s website has useful resources such as a home insurance finder tool and a list of companies offering difference in conditions policies. Assistance is available in English and Spanish at 800-927-4357.

Looking for more insurance in California?

Best car insurance in California .

Cheap car insurance in California .

Fresno car insurance .

Los Angeles car insurance .

Sacramento car insurance .

San Diego car insurance .

San Francisco car insurance .

San Jose car insurance .

California renters insurance .

Best pet insurance in California .

Medicare Advantage plans in California .

If you have a mortgage on your home, your lender will likely require hazard insurance — the part of a homeowners policy that covers the house’s structure. Those who buy homes with cash or have paid off their mortgage could legally go without homeowners insurance. However, it’s a risky proposition in a state prone to wildfires and other natural disasters.

For more information, read Is Homeowners Insurance Required?

Coverage for fires is a standard part of most homeowners policies. But in California, you may have trouble finding a company willing to insure you if your home is in a high-risk zone for wildfires. You can turn to the California FAIR Plan for fire coverage as a last resort.

Following recent wildfires in California, insurance companies have found themselves paying billions of dollars in claims. They’ve responded by passing their costs along to policyholders in the form of higher rates. Additionally, inflation and supply chain issues have raised building costs across the country. That means it would cost more to rebuild your home if it were damaged — another factor leading to higher homeowners insurance prices.

To save on your premium, ask your insurer if you qualify for any home insurance discounts .

If you have a mortgage on your home, your lender will likely require

hazard insurance

— the part of a homeowners policy that covers the house’s structure. Those who buy homes with cash or have paid off their mortgage could legally go without homeowners insurance. However, it’s a risky proposition in a state prone to wildfires and other natural disasters.

For more information, read

Is Homeowners Insurance Required?

To save on your premium, ask your insurer if you qualify for any

home insurance discounts

NerdWallet averaged rates for 40-year-old homeowners from various insurance companies in every ZIP code across the state. All rates are rounded to the nearest $5.

Sample homeowners were nonsmokers with good credit living in a single-family, two-story home built in 1984. 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.

$1,000 in medical payments coverage.

We made minor changes to the sample policy in cases where rates for the above coverage limits or deductibles weren’t available.

These are sample rates generated through Quadrant Information Services. Your own rates will be different.

Star rating methodology

NerdWallet’s homeowners insurance ratings reward companies for customer-first features and practices. Ratings are based on weighted averages of scores in several categories, including financial strength, consumer complaints, coverages, discounts and online experience. These ratings are a guide, but we encourage you to shop around and compare several insurance quotes to find the best rate for you. NerdWallet does not receive compensation for any reviews. Read our full homeowners insurance rating methodology .

Complaint methodology

NerdWallet examined complaints received by state insurance regulators and reported to the National Association of Insurance Commissioners in 2020-2022. To assess how insurers compare with one another, the NAIC calculates a complaint index each year for each subsidiary, measuring its share of total complaints relative to its size, or share of total premiums in the industry. To evaluate a company’s complaint history, NerdWallet calculated a similar index for each insurer, weighted by market shares of each subsidiary, over the three-year period. NerdWallet conducts its data analysis and reaches conclusions independently and without the endorsement of the NAIC. Ratios are determined separately for auto, home (including renters and condo) and life insurance.

On a similar note...

Free homeowners insurance comparison

Compare top home insurance companies.

california assigned risk homeowners insurance

California homeowners’ ‘insurer of last resort’ quickly becoming only viable option

california assigned risk homeowners insurance

  • Copy link to this article

In the past week, Californians learned that two of the state’s largest insurance companies, State Farm and Allstate, have decided to stop signing new homeowner policies in the state.

Moreover, State Farm has sought significant rate hikes for its existing customers from California regulators.

Industry experts say both companies’ decisions are part of a broader trend in which insurers retreat from insuring California homeowners due to wildfire risks, climate change and construction costs that outpace inflation.

The two companies’ decisions raise the specter that more California homeowners will have to sign up for the FAIR Plan, a private “insurer of last resort” for properties located in high-risk areas that can’t otherwise get insurance.

“But nobody should want to be on the FAIR plan,” said Rex Frazier, president of the Personal Insurance Federation of California, an industry lobbying group.

That’s because FAIR has downsides: It covers less and charges higher premiums. Additionally, critics say the FAIR is underfunded and mismanaged, and it doesn’t always pay out when it ought to.

Are you a homebuyer concerned about accessing insurance? Email us at  [email protected] . You can also call us at 415-408-6000 or send us a text message at 415-408-6282.  

What Is FAIR?

california assigned risk homeowners insurance

The Fair Access to Insurance Requirements (FAIR) Plan is California’s solution to an increasingly common problem: homeowners who cannot purchase fire insurance for their properties on the market. 

Although it was created under California law in 1968, FAIR is not a state or public entity. Rather, it is a consortium of all the companies licensed to sell property and casualty insurance in California.

“Each member company participates in the profits, losses and expenses of the plan in direct proportion to its market share of business written in the state,” the FAIR Plan states on its website.

FAIR’s rates are higher than those of standard insurance companies because its risk pool is skewed toward higher risk. Nonetheless, its insurance satisfies home lender requirements to complete a sale of a home.

In other words, without FAIR, many people would not be able to buy their homes.

In recent years, as more companies back off insuring California properties—which Frazier terms “quiet quitting”—consumers have had to look elsewhere.

One of those places was FAIR. Between 2018 and 2022, its total policies more than doubled, growing from around 127,000 to nearly 273,000.

“You can see between State Farm’s growth and the FAIR Plan’s growth, that’s where people have been going over the last several years,” said Frazier.

Now State Farm has halted new homeowner insurance plans.

“There will be FAIR Plan-only communities,” Frazier said.

What’s Wrong With That?

california assigned risk homeowners insurance

If your home is located in an area with high wildfire risk, FAIR is an important lifeline. But it also has limitations.

First, FAIR is not supposed to be permanent insurance.

“The FAIR Plan is not intended to compete with or replace traditional insurers and is meant to serve as a temporary safety net for property owners until traditional insurance coverage becomes available,” FAIR said in a statement. 

Additionally, unlike regular insurance, it only covers a set of “named perils” explicitly listed in the plan. They include fire and lightning, “internal explosion” and smoke damage, according to the plan’s website.

In practice, however, policyholders have often found FAIR to exclude smoke damage. 

In response to policyholder complaints about this, the California Department of Insurance carried out a targeted examination of FAIR claims between 2017 and March 2021.

That investigation turned up numerous violations. Among them, FAIR had failed to provide coverage equivalent to standard fire insurance and had “denied or discouraged” smoke damage claims.

"The FAIR Plan’s policy language for smoke claims was negotiated with and approved by the California Department of Insurance," FAIR said in a statement. "The FAIR Plan will pay to remediate direct physical loss caused by a covered peril at the properties that it insures."

But those denials can cause serious problems for policyholders, said Dylan Schaffer, an Oakland-based attorney who represents people suing the California FAIR Plan Association. 

According to him, in 2017, FAIR took a position that homes that didn’t burn in wildfires but suffered smoke damage weren’t actually damaged, but simply dirty. As a result, it has refused to pay to have these homes cleaned and repaired.

READ MORE: State Farm Asks California for Huge Insurance Rate Hike as Home Coverage Halts

“They’re putting people at risk for health and safety problems because their homes are contaminated,” he said. 

Schaffer sees a conflict of interest in the plan’s structure: The very companies that refuse to insure properties in high-risk areas are still insuring them through the “back door” of FAIR.

These companies don’t like FAIR and, as a result, “it’s very poorly funded and very poorly run,” he said. “I consider it one of the most challenging insurance companies.”

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Best homeowners insurance in California for 2024

Based on Bankrate’s research, USAA, Chubb, Travelers, Nationwide and Encompass offer Californians some of the best home insurance policies in the state.

Natalie Todoroff is an insurance writer for Bankrate, prior to which she wrote for a popular insurance comparison shopping app. She has a Bachelor of Arts in English and has written over 800 articles about insurance throughout her career.

Lisa McArdle is an insurance editor who joined the Bankrate team in 2023. She has more than 15 years of experience writing, editing and managing content in a variety of industries, including insurance, auto news and pop culture.

Mark Friedlander is director of corporate communications at III, a nonprofit organization focused on providing consumers with a better understanding of insurance.

The Bankrate promise

At Bankrate, we strive to help you make smarter financial decisions. To help readers understand how insurance affects their finances, we have licensed insurance professionals on staff who have spent a combined 47 years in the auto, home and life insurance industries. While we adhere to strict  editorial integrity , this post may contain references to products from our partners. Here’s an explanation of  how we make money . Our content is backed by  Coverage.com  LLC , a licensed entity (NPN: 19966249). For more information, please see our  Insurance Disclosure.

What To Know First

California is a risk-prone state, so it may be surprising to learn that its average home insurance rate is $1,266 per year for $250,000 in dwelling coverage, which is 14 percent lower than the national average of $1,759 per year for the same amount of coverage. Even so, homeowners in California have special considerations to take into account when shopping for home insurance, like the state’s shrinking home insurance market, wildfires and earthquake coverage.

Bankrate’s insurance editorial team, which includes licensed insurance agents and industry professionals, can help you understand how to find proper insurance coverage in the Golden State. We assessed the average rates, coverage options, discounts, third-party scores and ratings, and digital tools of California home insurance companies to find the options that stand out.

According to Bankrate’s research, the best homeowners insurance companies in California include:

  • Best for military-focused coverage: USAA
  • Best for high-value homes: Chubb
  • Best for pre-packaged coverage: Travelers
  • Best for unique coverage options: Nationwide
  • Best for bundling with auto insurance: Encompass

Our research determined that the average cost of home insurance in California is $1,266 per year for $250,000 in dwelling coverage.

On This Page

  • Compare the best home insurance companies in California for 2023
  • Best California homeowners insurance companies in detail

Additional California home insurance companies to consider

Cheapest home insurance companies in california, best home insurance discounts in california, how much is home insurance in california, what does home insurance cover in california, additional home insurance coverage types in california, frequently asked questions.

Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next.

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Our insurance team is composed of agents, data analysts, and customers like you. They focus on the points consumers care about most — price, customer service, policy features and savings opportunities — so you can feel confident about which provider is right for you.

We guide you throughout your search and help you understand your coverage options.

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What to know about insuring your California home

Best california home insurance companies.

To choose the best CA home insurance, Bankrate reviewed customer service ratings, average rates, financial strength ratings and other metrics.

Cheapest home insurance companies

Even with limited options, Bankrate found California providers that offer cheaper average rates.

California home insurance cost

How do your home insurance costs compare to the rest of the state? Compare your ZIP code to others in the Golden State.

Insuring your California home

Learn about California’s unique insurance risks and how you can guard against them.

  • Compare the best home insurance companies in California for 2024

Compare the best homeowners insurance companies in California

Our research revealed that the five carriers below are among the best California homeowners insurance companies. On our list, USAA and Chubb earned the highest Bankrate Scores, which may make them particularly worthy of consideration if you’re looking for carriers with strong third-party ratings. In our quest to find the best California homeowners insurance, we reviewed average rates, financial strength scores from AM Best and customer satisfaction ratings from the J.D. Power 2023 U.S. Home Insurance Study , coverage offerings, discounts, digital tools and more.

If you’re shopping for the best homeowners insurance in California, you may want to consider these companies:

Bankrate's trusted insurance industry expertise

The home insurance market can be complicated, but Bankrate's insurance editorial team used our unique perspective to bring readers information they need to make educated decisions when shopping for home insurance.

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Leaving so soon your custom quotes are just minutes away., the top 5 home insurance companies in california.

Best for military-focused coverage

california assigned risk homeowners insurance

Avg. premium for $250K dwelling

Customer satisfaction

Why USAA made our list: Although its eligibility restrictions preclude it from official ranking, USAA earned the highest J.D. Power score for customer satisfaction in addition to tying for Best Home Insurance Company Overall 2024 Bankrate Award . For those eligible to become USAA members, the company is often one of the most affordable California homeowners insurance companies. It also has unique options beneficial to active-duty military members, like coverage for uniforms damaged in a covered loss.

Who USAA may be good for:  If you are affiliated with the military or a qualifying family member, USAA could be a good choice. The company offers low average rates and coverage options tailored to military families.

Pros and cons

Checkmark Pros

  • Low average rates
  • High J.D. Power customer satisfaction score
  • Coverage options for military families

Close X Cons

  • Strict eligibility requirements
  • No in-person insurance locations
  • Does not write earthquake insurance in California

Additional Coverage

USAA’s home insurance policies come standard with $5,000 of identity theft protection and  replacement cost coverage . To further build out your policy, you can add the following endorsements:

  • Home Protector : Raises your dwelling and other structures limits by 25 percent if a covered loss exceeds your policy limits. Exclusions may apply.
  • Personal injury : Covers the qualifying expenses related to a libel, slander, or defamation of character lawsuit against you.
  • Water backup : Also known as sewer backup coverage, this add-on can help with the cleanup and repair expenses that stem from water that backs up and overflows from your home’s plumbing system.
  • Electronics coverage : Extended coverage limits for pricey tech items like TVs, gaming systems, mobile phones, computers and even wearable tech.

Compare rates by city

Best for high-value homes

california assigned risk homeowners insurance

Why Chubb made our list: Chubb's product line is geared more towards high-net-worth individuals, earning it our 2024 Bankrate Award for Best for High-Value Homes. However, eligibility may be restricted based on home value, so Chubb may not be an option for all homeowners. One key offering that may appeal to California homeowners is the company's Wildfire Defense Services , which works year-round to monitor, prevent and mitigate losses to your home and valuables from wildfire.

Who Chubb may be good for:  Chubb may be a good choice for high-value homes needing specialty earthquake or flood coverage since Chubb offers both options for eligible homes. Specializing in custom policy coverage, homeowners with wine, jewelry and art collections may be interested in Chubb's tailored coverage and HomeScan risk-mitigation consulting.

  • Unique Wildfire Defense Services may appeal to homeowners in fire-prone regions
  • Offers flood, earthquake, wildfire, hurricane and hail coverage in many states
  • Unique endorsement selection and additional policies, such as home equipment breakdown coverage
  • Higher average rates than many other carriers
  • Eligibility may be restricted based on home value
  • Scored below average in the J.D. Power 2023 U.S. Home Insurance Study

Because Chubb’s Masterpiece plan already includes such a wide breadth of coverage, its add-ons are more limited. The Masterpiece policy includes extended replacement cost coverage, water backup coverage, replacement value for your personal property, identity theft coverage and other coverages that are typically only offered as endorsements from other insurers.

That said, California homeowners interested in a Chubb policy may also want to know about its other home-related insurance lines:

  • Equipment breakdown coverage : Chubb offers clients two different tiers of  equipment breakdown coverage , Essential and Enhanced. The Essential tier has a $250,000 limit and can cover HVAC systems, appliances, water heaters, swimming pool equipment,m well pumps, permanent generators and permanent home security systems. The Enhanced tier has a higher coverage limit of $500,000, and when paired with the Masterpiece Contents plan, can cover the same items as the Essential tier in addition to computers, humidifiers and countertop appliances.
  • Valuable articles insurance : If you have something expensive in your home, whether it’s a vintage wine collection or a prized baseball card collection, Chubb can probably insure it. Chubb offers separate endorsements for jewelry, wine and spirits, fine art and personal collections.

Best for unique coverage options

california assigned risk homeowners insurance

Why Nationwide made our list: Nationwide offers several endorsements, including the unique Better Roof Replacement option, water backup coverage and identity theft protection. Additionally, the company may help California homeowners obtain flood and earthquake insurance . The company also offers a wide selection of home insurance discounts, which helped it win the 2024 Bankrate Award for Best Budget Home Insurance Company. However, Nationwide does have a lower-than-average J.D. Power customer satisfaction score.

Who Nationwide may be good for:  Shoppers looking for unique coverage may want to consider Nationwide. The company’s unique Better Roof Replacement option and ability to help homeowners obtain separate policies like flood coverage could help round out your insurance portfolio.

  • Offers several endorsements
  • Numerous discounts available
  • Local agents available
  • Below-average J.D. Power customer satisfaction score
  • Customer service is not 24/7

Nationwide’s home insurance policies already include credit card coverage and ordinance law coverage, which helps with the added costs of getting your home up to code following a covered loss. You can expand the scope of your home insurance coverage with these endorsements:

  • Brand New Belongings : This is Nationwide’s version of replacement cost coverage for your personal property. If your belongings are damaged in a covered claim, Nationwide can pay you  actual cash value . After you replace or repair your items, Nationwide can reimburse you for the added cost.
  • Valuables Plus : An extra layer of higher-limit coverage for expensive items.
  • Identify theft coverage : Can reimburse up to $25,000 of out-of-pocket expenses related to identity theft and set you up with an identity theft specialist.
  • Service line coverage : Covers costs related to repairing underground service lines like gas, electricity and water. This can include excavation costs, additional living costs, repairs and other related expenses.

Best for green homes

california assigned risk homeowners insurance

Why Travelers made our list : Travelers standard home insurance policies are on the simpler side, but the insurer offers policyholders multiple ways to customize with a healthy list of insurance endorsements like water backup coverage, identity theft coverage and higher limits for valuables like jewelry and silverware. Although these add-ons will likely increase your premium, there are a nice handful of discounts available to help you save. These include a multi-policy discount, a claims-free discount, a discount for a newly purchased home and one for homes with protective devices like smoke detectors and home security systems.

Who Travelers may be good for : It’s no secret that California is pushing for  greener homes . If you’re ahead of the game and already live in a Leadership Energy and Environmental Design (LEED) certified home, you could save up to 5 percent on your Travelers home insurance premium. Travelers also offers specialized green home coverage, which can help shoulder the added costs of repairing or replacing your home with green materials following a covered loss.

  • Special discount and coverage for green homes
  • Customizable policies
  • Ranked third-to-last in the 2023 J.D. Power Home Insurance Study
  • Online quotes not available in California

Travelers’ list of additional coverage options is not the longest compared to some other providers, but it’s also not the shortest. In addition to the endorsements mentioned above, Travelers offers the following:

  • Personal articles floater : Unlike a jewelry and valuable item endorsement, this is an additional policy if you need higher coverage limits than what your home insurance policy offers for certain items.
  • Contents replacement cost : Insurers your personal property at its replacement cost value,  instead of its actual cash value . Expensive items may require a deductible.
  • Special personal property coverage : This add-on expands the personal property arm of your policy to cover damage resulting from any disaster, except ones that are specifically excluded.
  • Additional replacement cost protection coverage : Following a covered loss, if your home’s repair costs exceed your dwelling limit, additional replacement cost protection can increase your limit to help curb out-of-pocket expenses.

Best for bundling with auto insurance

california assigned risk homeowners insurance

Why Encompass made our list:  Although Encompass is on the pricier end of premiums in the state, the company offers a plethora of discounts and highly customizable policies that may help your premium stretch. Encompass’ standout money-saving feature is its single deductible option: if you purchase your home and auto insurance policies from Encompass, your claims for both policies could be subject to just a single deductible if the loss occurred from the same event. Home and auto policies from Encompass are available in three coverage tiers — Special, Deluxe and Elite — each with its own list of coverage options and limits.

Who Encompass may be good for:  Homeowners looking to house their home and auto insurance policies under one roof may be interested in Encompass. However, the inability to get a quote or file a claim online may deter some shoppers.

  • Highly customizable policies
  • Deluxe and Elite tiers offer 200 percent property location limits
  • Superior AM Best financial strength rating
  • Quotes are not available online
  • High average premiums
  • Cannot file a claim online

In terms of customization, you will likely have the most flexibility when you choose between Encompass’s policy tiers versus when you choose individual coverage endorsements. Endorsements vary based on the plan you choose, but the list below can give you a good idea of what’s available from Encompass:

  • Ordinance coverage : Increases policy limits to bring your home up to code following a covered loss.
  • Replacement cost coverage : Increases your coverage if your home’s rebuild costs exceed your initial policy limits.
  • Covered losses for structure and contents : This expands the scope of your home insurance policy to protect your personal possessions from more  perils .
  • Lifestyle endorsement:  Raises personal liability and property coverage limits in multiple scenarios, like if a family member is in a healthcare facility. It also helps lower deductibles for sports and hobby equipment and can offer higher jewelry coverage limits.
  • Identity theft coverage : Provides access to a fraud specialist and up to $20,000 for related expenses.
  • Boat and watercraft coverage : Includes underinsured/uninsured boat coverage, replacement cost coverage and personal property coverage for your boat.

AAA

Who this may be best for

Homeowners who are already AAA members

The American Automobile Association, or AAA for short, writes home insurance in California through its subsidiary insurance groups. Depending on your ZIP code, your California home insurance policy could be underwritten by CSAA, Automobile Club of Southern California or AAA Northern California, Montana, Nevada and Utah Insurance Exchange. AAA’s home insurance policies are fairly standard, and may only be worthwhile for those who are already members. It may not make financial sense to join AAA solely for its home insurance policies, but some homeowners may be interested in AAA’s other perks, like its travel discounts and famous roadside assistance.

Mercury

Homeowners on the California FAIR plan

Mercury only writes home insurance policies in 10 states, California being one of them, and may appeal to homeowners who prefer a smaller company. Its difference in conditions, in particular, may appeal to homeowners who have had to resort to the California FAIR plan , an insurance program for homeowners unable to secure coverage in the private market. The difference in conditions endorsement can help fill in coverage gaps found in the FAIR plan, such as rain, theft, water service line and liability coverage.

How Bankrate chose the best home insurance companies in California

California residents have multiple insurers to choose from, several of which offer more affordable premiums for homeowners insurance than the state average. To help you find the best home insurance company for you, we calculated a Bankrate Score to analyze each company across several categories. The rating sections include average annual premiums from Quadrant Information Services, available coverage, discounts and policy features. We also reviewed J.D. Power customer satisfaction ratings to indicate how satisfied customers are with their company’s service and AM Best ratings to assess financial stability. The higher a company ranked in each category, the higher its overall Bankrate Score — 5.0 being the highest possible.

Methodology

Bankrate utilizes Quadrant Information Services to analyze the latest rates from February, 2024 for ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on 40-year-old male and female homeowners with a clean claim history, good credit and the following coverage limits:

  • Coverage A, Dwelling: $150,000, $250,000, $350,000, $450,000, $750,000
  • Coverage B, Other Structures: $15,000, $25,000, $35,000, $45,000, $75,000
  • Coverage C, Personal Property: $75,000, $125,000, $175,000, $225,000, $375,000
  • Coverage D, Loss of Use: $30,000, $50,000, $70,000, $90,000, $150,000
  • Coverage E, Liability: $300,000, $300,000, $300,000, $300,000, $500,000
  • Coverage F, Medical Payments: $1,000

The homeowners also have a $1,000 deductible and a separate wind and hail deductible (if required).

These are sample rates and should be used for comparative purposes only. Your quotes will differ.

Bankrate Scores

Our 2024 Bankrate Score considers variables our insurance editorial team determined impacts policyholders’ experiences with an insurance company. These rating factors include a robust assessment of each company’s product availability, financial strength ratings, online capabilities and customer and claims support accessibility. Each factor was added to a category, and these categories were weighted in a tiered approach to analyze how companies perform in key customer-impacting categories.

Each category was assigned a metric to determine performance, and the weighted sum adds up to a company’s total Bankrate Score — out of 5 points. Our scoring model provides a comprehensive view, indicating when companies excel across several key areas and highlight where they fall short.

  • Tier 1 (Cost & ratings): To determine how well auto and home insurance companies satisfy these priorities, 2023 quoted premiums from Quadrant Information Services (if available), as well as any of the latest third-party agency ratings from J.D. Power , AM Best , Demotech and the NAIC , were analyzed.
  • Tier 2 (Coverage & savings): We assessed companies’ coverage options and availability to help policyholders find a provider that balances cost with coverage. Additionally, we evaluated each company’s discount options listed on its website.
  • Tier 3 (Support): To encompass the many ways a home insurance company can support policyholders, we analyzed avenues of customer accessibility along with community support. This analysis incorporated additional financial strength ratings from S&P and Moody’s and factored a company’s corporate sustainability efforts.

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Finding cheap home insurance in California

Not every California homeowner will be able to secure a cheap policy, particularly those in a high-risk wildfire area . In fact, homeowners with homes at elevated risk for wildfire damage may struggle to secure any insurance policy, let alone a cheap one. That said, getting familiar with the cheapest home insurance companies in California can be a good starting point if you’re looking for coverage on a budget.

How Bankrate chose the cheapest home insurance companies in California

Bankrate sources our rate data from Quadrant Information Services. In order to find the best cheap home insurance in California, we started by reviewing the most up-to-date rates available. From there, we narrowed the search to include rates from the larger insurers in the state by market share. Given the volatility of the California home insurance market, we ensured that each provider on our list is still writing policies in the state.

How to get cheap California home insurance

Finding the right California home insurance for your needs is an important part of securing your financial health. Home insurance is designed to help shield your finances from the fallout of unexpected home damages and can help you keep your finances intact if you suffer a loss. To find the best homeowners insurance in California at a price that works for you, you may want to consider these steps:

  • Determine what you need. Home insurance needs can vary, so you may want to do some research to determine how much home insurance you need . This can help you avoid overpaying and under-insuring your home. Using an online tool can help you determine what’s right for your home. You may also want to make a home inventory for your personal belongings.
  • Decide what factors matter most to you. When it comes to shopping for home insurance, finding the cheapest rate may be important to one shopper, while another shopper may need specialty coverage. For another shopper, having access to digital tools may be essential. That’s why it may help to assess what features in a home insurance company are important to you. Once you determine that, you can look for a company that meets those requirements.
  • Search for companies. Once you have a list of factors that you’re looking for in a home insurance company, you can start your research. It may be a good idea to find several companies that meet your needs.
  • Request quotes. Next, request quotes from the companies that you think might be a good fit. You’ll be able to review coverage offerings, discounts and average rates to determine which is going to ultimately be best for your coverage needs and budget.
  • Buy your policy. Once you have a quote that you’d like to proceed with, your agent or a representative from the company will help you buy your home insurance .

Home insurance discounts are an easy way to lower your premium. Most major insurers offer at least a few savings opportunities that might help you get a cheaper rate. Here are some common home insurance discounts in California:

How to save on home insurance policy renewals in California

For better or for worse, your insurance premium is not permanent. If you’re looking to lower your home insurance rate without going through the trouble of changing insurers, there are a couple of steps you can take to secure a more favorable rate:

  • Fortify your home against wildfire damage . Wildfire damage is a key concern for most home insurance providers in California, and you could be rewarded with a discount if you take measures to protect your home from wildfire damage.
  • Minimize claims . You may not need to file a claim every time your home is damaged. In fact, it may even be cheaper in the long term to avoid it. Many home insurance providers view customers who have filed a claim in the past as more likely to do so in the future, and may charge them higher rates. To avoid this surcharge, it may be cheaper to pay for damages out-of-pocket if they’re close to your deductible.
  • Raise your deductible — if you can afford it . Opting for a high-deductible home insurance policy may help you get a lower rate. However, be cautious when doing so, and make sure that your deductible is still something you can realistically pay at a moment’s notice without breaking your budget.
  • Boost your home’s security. Shoring up your home’s security can do more than just give you added peace of mind, it may also result in added savings. Many insurance providers extend discounts to homeowners who take steps to further secure their homes. Depending on your insurer, this could be as simple as adding a deadbolt, or as involved as a whole-home alarm system.
  • Peruse discounts . Home insurance policies typically renew annually, which leaves plenty of time to check for missed discounts. It may be worth setting aside some time with your insurance agent to see what discounts you potentially missed when you first signed up for your policy, and which ones you’ve only recently qualified for.

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Understanding home insurance costs in California

The average cost of homeowners insurance in California for $250,000 in dwelling coverage is 1,266 per year. Although this is below the national average cost of homeowners insurance of $1,759 per year, the insurance premium for every home may be higher or lower than either of these averages depending on the home’s size, age and location, coverage options, and other individual rating factors. When looking for the best homeowners insurance in California, it’s helpful to consider how these factors could affect your final premium.

If you’re wondering why California’s home insurance rates are so low considering how risky the state is, it’s largely because of strict consumer protection laws. California state laws (Proposition 103, in particular) prohibit insurers from raising rates more than 7 percent without approval from the state’s Department of Insurance. As you can imagine, this clogs up the process and results in home insurance rates getting stuck at unsustainably low levels. 

While this may seem like good news for homeowners, it is actually one of the many factors that contributed to the market instability plaguing the state.

California homeowners insurance rates by city

When hearing that location can influence home insurance costs, many people’s minds jump to state-by-state cost considerations. While the state you live in plays a role in the cost of your insurance, so does your ZIP code. The interactive map below shows home insurance rates from across the state to help you compare.

  • The cheapest cities for homeowners insurance in California
  • The most expensive cities for homeowners insurance in California
  • Badger: $1,118 per year — 12 percent below state average
  • San Gabriel: $1,121 per year — 11 percent below state average
  • Temple City: $1,128 per year — 11 percent below state average
  • Alhambra: $1,128 per year — 11 percent below state average
  • Brookdale: $1,133 per year — 11 percent below state average
  • Cedarpines Park: $1,518 per year — 20 percent above state average
  • Lake Arrowhead: $1,510 per year — 19 percent above state average
  • Idyllwild: $1,503 per year — 19 percent above state average
  • Compton: $1,497 per year — 18 percent above state average
  • Wrightwood: $1,490 per year — 18 percent above state average

*Rates are for $250,000 in dwelling coverage.

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Before panic-buying every home insurance endorsement your insurer offers, it’s helpful to first understand which disasters are specifically covered in your policy. Once you have a better understanding of what’s covered by your home insurance policy , you can identify potential coverage gaps and purchase more coverage if you need it.

The most common type of home insurance policy is an HO-3 . This type of home insurance provides dwelling coverage, other structures coverage and personal property coverage, in addition to liability, medical payments and additional living expenses. Your dwelling and other structures are typically insured on an “open peril” basis, meaning they are protected from everything except what is specifically excluded as outlined in your policy. Your personal property, however, is only protected from the losses, or “ perils ,” that are named in your policy.

A study from Mercury Insurance identified the most common insurance claims filed by California homeowners. We’ve listed them below by popularity and provided context on how they are already covered by a standard home insurance policy:

  • Water damage: Water damage claims made up nearly 57 percent of California’s home insurance claims. Leaky appliances, burst pipes and other sudden and accidental water damage can all be covered by your home insurance policy. Notably, almost all home insurance policies do not cover flood damage.
  • Wind: Home insurance can help when a gentle breeze turns not-so-gentle. High winds can damage your roof, siding and other areas of your home, but your home insurance policy could be able to help pay for the repairs.
  • Fire: Your dwelling and personal property are financially protected from fire damage, with some key exceptions. Intentionally set fires are not covered by home insurance, and if you live in a wildfire-prone area, your insurer could exclude wildfire damage from your policy.
  • Theft: While it’s not a natural disaster, theft can be just as devastating on a personal level. Theft is a named peril on the vast majority of home insurance policies and can cover your dwelling, other structures and personal property up to your specified coverage limits.

In a state prone to wildfires, mudslides and earthquakes, asking insurance companies specific questions about what your policy does and does not include is important. For instance, even though California is prone to earthquakes, home insurance companies do not typically include coverage for such incidents. Due to common natural disasters, many insurance experts recommend these extra coverage types for California homeowners:

  • Earthquake coverage: Due to its position along the San Andreas Fault, California is one of the most earthquake-prone states in the country. You can usually purchase California earthquake coverage as a separate policy, often sold by the California Earthquake Authority . A private insurance company may also sell earthquake policies.
  • Flood insurance: California is considered a flood-prone state due to its valleys and coastal land areas. However, standard home insurance does not include damage caused by floods. Instead, you can buy flood insurance through the National Flood Insurance Program (NFIP) and some private flood insurers.
  • Fire insurance: Although coverage for some fires is included in basic homeowners insurance policies, Californians are at an increased risk because of the high probability of wildfires. If you live in an area where finding home insurance coverage is difficult because of the involved risk, you may consider purchasing a separate policy like the FAIR Plan. California FAIR Plan (CFP) recommends only getting coverage through its association as a last resort, but it could offer fire insurance for your home.
  • Scheduled personal property: If you own high-value items, like artwork or jewelry, these may not be fully covered by the personal property coverage on your homeowners policy. Some solutions can be to increase your personal property coverage limits or purchase a scheduled personal property endorsement as additional coverage. Because each insurance company may have different guidelines in how it approaches expensive belongings, it can help to speak to an insurance agent to see what the best solution is for you.

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Common california home insurance problems.

California has something to offer for all kinds of homeowners with its buzzing cities, hundreds of miles of coastline, sky-grazing mountain ranges, mild winters and otherworldly desertscapes. While California’s cultural cachet and natural beauty make it a desirable place for many to put down roots, finding the right home insurance policy can be a challenge. Here are a few hurdles homeowners may encounter:

  • Dwindling coverage options: In the past year, three of California’s largest home insurance providers by market share, State Farm, Allstate and Farmers have either stopped accepting new home insurance policies. Together, these three insurers wrote nearly 22 percent of all home insurance policies in California, and their departure from the state signals an unstable insurance landscape.
  • Difficulties finding a policy: Wildfires are among the most devastating and expensive home insurance claims. In 2022, the National Interagency Coordination Center estimated that California wildfires did $380 million in damage. With that in mind, USAA has tightened its wildfire safety standards to only write policies for homes below a certain risk threshold. While it’s unclear how the new guidelines will affect current policyholders, it certainly doesn’t make it easier for new homeowners to get coverage.
  • Strained FAIR plan: The FAIR plan is supported by California’s private home insurers, and if too many homes are on the plan, it could take just one bad wildfire season to wreak havoc. The potential payout required from private insurers in the event of widespread wildfire losses could put them at risk for financial solvency and incentivize them to limit the number of new home insurance policies.
  • Natural disasters: California’s natural beauty comes at a steep price. While there’s plenty to enjoy about the great outdoors here, earthquakes, landslides, floods and wildfires pose major threats to homeowners across the state. When shopping for homeowners insurance, California property owners will likely need to consider endorsements or additional policies to be financially protected from Mother Nature’s wrath.

Due to the increased frequency and devastation of wildfires in California, some insurance providers are limiting the number of new home policies they accept , while others are declining to write any new home coverage in the state. When carriers back out of a state, it likely has implications for all homeowners, so Bankrate's insurance editorial team is closely monitoring this rapidly evolving situation. We will revise Bankrate articles as circumstances change so you have the latest and most accurate information to help make sound insurance decisions. Significant recent changes in the California home insurance market include:

  • Sept. 21, 2023: California Governor Gavin Newsom issued an executive order calling for “prompt regulatory action” to “improve the efficiency, speed and transparency of the [home insurance] rate approval process.” The order is expected to grant insurers permission to adjust rates that more accurately reflect California’s wildfire risk. While this likely means higher rates for homeowners, the order states that insurers will only be able to do so if they agree to write more policies in high-risk fire areas. New regulations are not expected to be drafted until December 2024.
  • Aug. 30, 2023: USAA publicized its plan to limit new California home insurance coverage in March 2024. The insurer plans to raise its wildfire safety standards and only insure homes that pose a lower risk. For now, it is unclear how this decision will affect active USAA policies.
  • Aug. 2, 2023: Safeco announced its plans to cancel home insurance policies for homeowners in San Francisco in the Bay Area beginning October 2023.
  • July 21, 2023: Smaller insurers AmGUARD and Falls Lake filed withdrawals with the California state insurance regulator. Unlike Farmers, State Farm and Allstate, these two insurers intend to drop policyholders at their renewal dates.
  • July 7, 2023: Farmers announced that it will limit new home insurance policies in California to “a level consistent with the volume [it] projected to write each month before recent market changes.” Similar to Allstate and State Farm, Farmers credited catastrophic weather events, rising rebuild costs and inflation for the coverage limit.
  • As of May 27, 2023: State Farm stopped accepting new property and casualty applications for homeowners, condominium and commercial policies — new auto insurance policies are still being issued. State Farm cited high reinsurance and rebuild costs in its reason behind the decision, as well as wildfire concerns.
  • On Nov. 2, 2022: Allstate quietly paused writing new homeowners and condominium insurance policies in California. California's fourth biggest home insurer cited more frequent wildfire claims and rebuilding costs being too costly to underwrite.

There are still more than 100 available home insurers in California. However, homeowners should be aware of this shift in availability. If you cannot secure insurance for your home, you may want to consider the California Fair Plan , which provides coverage for homes considered high-risk. As of 2021, the FAIR Plain insured 268,231 policies .

What is the cheapest homeowners insurance in California?

Several large providers in California offer cheaper homeowners insurance policies (compared to the state average). To find the most affordable policy for your situation, you may want to compare quotes from multiple providers and see how adding discounts will affect your premium.

How do I get homeowners insurance in California?

Many insurance companies offer online quotes, but you can also call a company or visit a local agency. You will need to provide information about yourself, like your name, date of birth and address, along with information about your home, like your roof age, square footage and details about any custom features. Once you have a quote and would like to buy a policy, a company representative will walk you through the application process.

How can I save on California homeowners insurance?

The California FAIR Plan is a last-resort solution for homeowners who have difficulty obtaining home insurance from traditional carriers. Their home could be denied coverage due to factors like severe wildfire risk, condition of the home, occupancy status or other reasons. Under the FAIR Plan, California homeowners can obtain very limited coverage for named perils only, although more options may be added on for an additional charge. Keep in mind that the FAIR Plan is not meant to be a permanent solution, but rather a temporary one while homeowners look for a permanent home insurance carrier that will extend them coverage.

Why is it so hard to get home insurance in California?

It’s a complicated issue, but it essentially boils down to two things: California’s strict insurance laws and increased natural disasters. In California, insurers cannot raise rates in step with how risk levels are rising. With wildfire damage on the rise and insurers lacking the ability to increase rates to compensate for the increased risk, they have little choice but to limit new business in order to remain financially solvent.

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Why should all Californians pay for the fire insurance risk only a few face?

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A home burns as the Dixie fire jumped Highway 395 south of Janesville on Aug. 16, 2021. Photo by Ethan Swope, AP Photo

Insurers are seeking rate increases as California leaders try to prevent companies from fleeing over disaster risk, particularly wildfires and floods. As costs surge for utilities and other goods, a Sacramento homeowner asks if the needs of the many outweigh the needs of a few.

Guest Commentary written by

Jacquelyn Johnson

Jacquelyn Johnson

Jacquelyn Johnson is a retired Sacramento area transit worker.

After State Farm said it would stop selling new home insurance policies in California , Insurance Commissioner Ricardo Lara responded that the state will explore new rules allowing insurance companies to consider climate change when setting their rates.

But companies will only get to do this if they agree to write more policies for homeowners who live in areas with the most risk, including communities threatened by wildfires. This move is aimed at preventing insurers from fleeing the state over fears of massive losses from natural disasters.

While a multi-year surge of non-renewals affected roughly 235,000 households by 2021 , there are more than 13.3 million households in California . Lara’s rule change could mean higher rates for all homeowners, who are already seeing dramatic cost increases, and could result in more expensive homeowner and renter insurance bills.

Eight insurance companies have asked California for rate increases of at least 20% or higher, according to the state Department of Insurance. State Farm’s request was approved in December.

Why should the remaining 13 million households be required to pay higher rates when we do not live in communities threatened by wildfires? Why not instead ban home construction and the rebuilding of homes that have burned in fire-prone areas? At a time when climate change is making wildfires more common and more dangerous , isn’t it time to consider banning such construction?

Starting this month, PG&E will increase customer rates by 13% to cover the cost of undergrounding 1,230 miles of powerlines and place covered conductors on another 778 miles. The utility said that undergrounding lines essentially eliminates the risk caused by their transmission and distribution lines.

Again, why should millions of households have to pay higher rates when we do not live in these areas?

In 2018, the group 1000 Friends of Oregon released a report  that recommended avoiding development in high-risk areas, “unless they are related to farming or forestry.” Many have backed the idea. Five days before his 2018 retirement as director of Cal Fire, Ken Pimlott told the Associated Press that officials should consider banning home construction in vulnerable areas, saying “we owe it” to homeowners, firefighters and communities “so that they don’t have to keep going through what we’re going through.”

It is also extremely expensive to live in California especially with inflation increasing. The consumer price index , which measures the prices paid by typical consumers for retail goods and other items, increased by 7.3% for fiscal year 2023-24. It rose 5.6% the previous year.

No wonder people are leaving California – who can afford to live here? Perhaps, California should be as equally concerned with people fleeing the state as they are with insurance agencies fleeing.

I don’t blame State Farm, American International Group, Chubb and others for not renewing insurance for customers in fire-prone areas. In fact, I think they should have the ability to choose not to pay if customers decide to rebuild in those areas after a wildfire.

If California officials represent the entire constituency of the state, why then should the vast majority of households have to shoulder the costs for a small percentage who live in fire-prone areas?

When assessing rates and financial burden, California officials should consider the price tag for the majority of households instead of the few. Considering the financial costs and far-reaching harm wildfires produce, it is time to ban house development and building in fire-prone areas.

reader reactions

Banning fire rebuilds is the nuclear option. Give California’s rural communities a chance

Banning fire rebuilds is the nuclear option. Give California’s rural communities a chance

Some California residents are frustrated with rising insurance and utility costs, reviving questions about barring fire rebuilds altogether. A Magalia resident says that would be the nuclear option, especially given all the other forms of risk management available.

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More than 348,000 California homeowners insurance policies in wildfire risk areas have been dropped since 2015, according to data released by the California Department of Insurance. Wildfires can cost California insurers billions of dollars, and as a result, they are one of the common reasons companies are increasing rates or dropping high-risk homeowners policies.

The Camp Fire in 2018 is the most destructive California wildfire to date. It destroyed more than 153,000 acres and nearly 19,000 structures . Last year, California experienced more than 8,000 fires that caused more than $18 billion in damage.

With more destructive wildfires, it’s likely more California homeowners policies could be dropped by their insurance provider. In areas prone to wildfires in California, your home insurance company will likely either increase your home insurance rates when it comes time for you to renew or not renew your policy. If your California homeowners insurance cancels you, find out what you need to do.

What can you do if your home insurance company drops you?

It can be difficult for California homeowners to find home insurance in areas at risk of wildfires and other natural disasters. If your California home insurance company has dropped you, you’ll need to start looking for new coverage ASAP to avoid being uninsured. If you have a mortgage contract, your mortgage company requires homeowners coverage and will not accept insurance cancellation as a valid reason for your home to be uninsured.

Here are four things you can do if your California homeowners company has canceled your policy:

Get quotes from other California homeowners insurance companies

Talk to your neighbors to see what company they use, call the california department of insurance, look into home insurance with the california fair plan.

If you’ve received a notice of cancellation or nonrenewal notice by your homeowners insurance company in California because of the wildfire risk in your area, you may be able to find another company to insure you. All insurance companies have different standards to determine who to insure. To start, go through our California homeowners insurance rankings to find the best companies according to consumers and get quotes.

Make sure you try to get quotes from many different companies. Home insurance rates in areas of high fire risk are pricey, so this can help you find the best price for your policy. If you previously used an insurance agent, you can see if your agent can help you get quotes.

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You can turn to your neighbors and others who live in your area to see which home insurance company they have to protect their home. See if they’ve been dropped by their insurance company or if they’ve had luck with any company in particular. This can help you find a company that may be able to cover your home despite your risk.

You can also ask neighbors what insurance agent they use and find out if the agent was an expert in finding policies for your specific risk.

The California Department of Insurance can provide you with insurance help and resources. The department may be able to provide you with a list of insurance companies that sell policies in your area or offer you information about other options for high-risk homeowners that live in wildfire risk areas.

You can call the California Department of Insurance at 1-800-927-4357.

The California FAIR plan is a last resort for California homeowners who need insurance. It stands for California’s Fair Access Insurance Requirements plan. If you’re unable to get insurance from the voluntary insurance market in California, you can get home insurance through the FAIR plan.

The FAIR plan is an insurance pool. It covers damage to your home caused by fire, riot and windstorm. California FAIR Plan does not cover personal liability, theft, flood, earthquake, hail or vandalism, so you won’t have the same level of coverage as your previous insurance. In California, FAIR plan insurance covers damage and destruction from brush fires.

Before you try to get coverage with the FAIR plan, make sure you’ve tried to get home insurance quotes from many California private homeowners insurance companies. Once you’ve exhausted all other options, you can apply for homeowners insurance through the FAIR plan. Make sure you meet the submission guidelines before applying.

There are requirements in order to get insurance through the FAIR plan. You may be asked to make improvements to your home to better protect it from fire, theft, water damage or more. Some examples include updating your electrical wiring or repairing your roof.

If you end up getting coverage from the California FAIR Plan, you should shop again in six months to see if you can secure coverage in the voluntary market. You’ll have limited coverage and higher insurance rates with the California FAIR Plan.

California home insurance laws

Living in a high risk area is one of the main reasons homeowners insurance companies drop policyholders from coverage. But there are still laws that insurance companies have to follow before they cancel your coverage in California.

In California, a non-renewal notice must be sent to homeowners at least 45 days before cancelation. This is meant to give homeowners time to find coverage with another company or plan.

Gov. Gavin Newsom signed legislation into law in October that will require California homeowners insurance companies to give 75 days notice of non-renewals, rather than 45 days. However, this law won’t go into effect until July 1, 2020.

Additionally, insurance companies have a two year moratorium against canceling policyholders after a disaster, including a wildfire. This means that your insurance company can’t drop you after a covered loss for two years after it happened. However, after this, home insurance companies can drop you for living in a high-risk area.

Even if your insurance company doesn’t cancel your coverage, it may increase your rates significantly. In California, insurance companies need to get approval from insurance regulators before increasing your rates. This helps avoid extreme rate increases, though your rates can still increase significantly.

Which insurance companies are dropping California homeowners because of fires?

As many California policyholders across the state are experiencing non-renewal from their home insurance carrier or dramatic price increases, which companies are the ones dropping customers? We searched social media threads, online forums and news articles to see what California residents have reported. Note: this is by no means a comprehensive listing of companies, simply anecdotes we found in our research.

You can see numerous complaints about price increases and policy cancelations because of fires in California in the comments of our Facebook post about how the fires have affected California home insurance increases. The comment below is from a California homeowner who was dropped by AAA after 20 years.

In an interview with the Ventura County Star , two homeowners complained of non-renewal notices from their insurance companies last year. One homeowner had AAA and the other had Liberty Mutual. These policy cancelations are said to be a result of the insurers determining their homes too much of a fire risk because of their closeness to brush-heavy areas.

Paul Abate, a homeowner canceled by AAA after having a policy for 28 years, said to the VC Star, “I called the underwriter and he said that they changed their underwriting guidelines to state that any home within 1,000 feet of brush is an unacceptable risk.”

The VC Star reported that homeowner Jim Harrison was dropped by Liberty Mutual and was taken by surprise. The VC Star wrote that Harrison “received a non-renewal notice from Liberty Mutual earlier in the summer and was blindsided by the news, as the brush was not on his property.”

Even California residents who weren’t directly affected by any wildfires have seen an increase in homeowners insurance rates. The comment below is from a reddit thread: California homeowners face higher insurance costs after fires .

Even if you’ve had your insurer for many years, you could still be canceled and need to find a new insurer. Frances Mann Craik told CBS News that her homeowners insurance policy was canceled and she had the same coverage for 18 years prior.

Are you one of the hundreds of thousands of residents dropped by your home insurance company? Let us know if you were able to find home insurance coverage and how you did it in the comments section below. Or share your story in a review of your insurance company.

The content on this site is offered only as a public service to the web community and does not constitute solicitation or provision of legal advice. This site should not be used as a substitute for obtaining legal advice from an insurance company or an attorney licensed or authorized to practice in your jurisdiction. You should always consult a suitably qualified attorney regarding any specific legal problem or matter. The comments and opinions expressed on this site are of the individual author and may not reflect the opinions of the insurance company or any individual attorney.

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About The Author: Alison Tobin

Feature Insurance Writer

Alison Tobin is a Feature Insurance Writer at Clearsurance. Her writing interests include “How to” guides across different insurance types as well as other educational pieces. Alison earned a BA in Communication and Media from Merrimack College in Massachusetts. She has been working in the insurance space for 4 years.

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Insurers such as State Farm and Allstate are leaving fire- and flood-prone areas. Home values could take a hit

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Some insurance companies are pulling back coverage from fire- and flood-prone areas, leaving homeowners with limited affordable options. This trend may even affect the property value of American homes, experts say.

The nation's largest homeowner's insurance company, State Farm, stopped accepting new applications for policies on property in California in May. Allstate announced in November 2022 that it would "pause new homeowners, condo and commercial insurance policies in California to protect current customers," the Associated Press reported in June.

This trend will likely continue across the insurance industry, said Jeremy Porter, head of climate implications research at First Street Foundation, a nonprofit research organization that compiles comprehensive climate risk data.

“They know the risk is just too high to be actuarially sound for their business," he said.

In its announcement, State Farm said too many buildings are being destroyed by climate catastrophes, inflation is making it too expensive to rebuild, and it can't protect its investments any longer.  

More from Personal Finance: Why a 'death note' is as important as having a will, advisor says Economists say the labor market is strong, but job seekers don’t agree Amid FAFSA delays, what to do if your financial aid letter is late

The problem is not just in California, where wildfires are prevalent. Louisiana and Florida homeowners are also contending with a lack of access to insurance , due to flood risk.  

"Losses are increasingly related to climate risk," said Sean Kevelighan, president and CEO of the Insurance Information Institute, an insurance industry association. "As that risk increases, so does the cost of insuring those assets that people have on hand."

Even though there wasn't an increase in major disasters in 2023, he said, the industry is still expecting to see $50 billion in losses just because of "severe convective issues" such as flash flooding and the implications of heavier everyday storms. 

What happens when a homeowner can't get insurance

Without insurance, many homeowners can find themselves in big financial trouble. 

Darlene Tucker, 66, and Tom Pinter, 68, are longtime homeowners in Sonora, California. The couple bought their "dream home" 18 years ago and have been enjoying their retirement from their respective jobs in manufacturing.

Tucker also cares for her horses and a rescued 100-pound tortoise on the property, and runs a dog day care center to help make ends meet. She said Pinter also works as a delivery driver to help out.

The couple received a nonrenewal notice from Allstate in November. Tucker told CNBC she has been working with her Allstate agent to find another insurer.

"I had one company step up and said they'd do it for $12,000 a year," she said — that's roughly six times her previous annual premium under Allstate of about $2,000.

She said there was no way the couple could afford that new policy, and they would likely have to move. 

But Tucker and Pinter may find that selling their home also comes with a steep cost.

Porter said First Street Foundation's research in California concluded that "the moment that an individual gets a non-renewal letter from the private insurance market, they essentially lose 12% of their property value."

Insurance costs 'should be an alarm' for homebuyers

Experts say the insurance landscape in California is particularly tricky because, in addition to the wildfire risk, the state has a law that adds extra approval measures, including board approval and review by the insurance commissioner, if an insurance company wants to raise the rate of insurance by more than 7%. That's been in effect since the 1980s.

Kevelighan, of the Insurance Information Institute, said that law, called Proposition 103, creates a regulatory environment in California that restricts the industry from adequately including climate risk in its forecasting and is one of the reasons the industry is being forced to pull back coverage in the state.

"Risk management does not come into play until it's entirely too late when it comes to individual personal property purchasing," Kevelighan said. "It comes into play when the mortgage provider needs you to go get it."

"And that's the first time when a consumer even begins to think about where they're living and what the risks might be," he said. "The cost reflects that risk. That should be an alarm to tell them that they're living in a risky place and then ask themselves: How could I reduce that risk? Or do I need to think about living somewhere else?"

'Give me something to work with'

With just days remaining until Tucker and Pinter's Allstate policy expires, on Feb. 15, the couple is still looking for more options. Tucker told CNBC that a recent quote they received was three times what they were originally paying, with a $10,000 deductible.

Of the whole situation, she said she feels frustrated.

"We're doing everything we can," Tucker said. "You know, we worked hard, we retired. We take good care of our house. I'm never late on my bills. I paid that [policy] for 18 years ... And you just give me no choice. That's the part that bugged me the most, I think. Give me a list. Give me something to work with. Raise [the price] if you need to, reasonably. But don't just give me no choice. That's not right."

Tucker's insurance agent from Allstate told CNBC that "most insurance companies are not currently writing polices in high fire prone areas," and confirmed the company was trying to help her find other options.

A spokesperson for Allstate said the company is "working with the California Department of Insurance to improve insurance availability in the state. We'll be able to offer home insurance policies to more Californians with the use of our advanced wildfire modeling and reinsurance."

State Farm did not respond to CNBC's requests for comment.

Watch the video to learn more about why some American homeowners are losing their property insurance and the changes the insurance industry would like to see to be able to offset some of the mounting risks.  

Clarification: This story has been updated to clarify when Allstate announced it would pause accepting applications for new insurance policies in California.

How floating cities and amphibious homes may help coastal towns adapt to sea-level rise

CNN

Storms in California hit homeowners already facing an insurance crisis

The storms pummeling California this week hit a part of the US already being battered by a home insurance crisis.

Insurance costs in much of California have become exceedingly high, with some insurers abandoning the market, unwilling to take on the risk presented by the frequency and severity of climate disasters in the region.

With insurers strained by climate change and inflation, many are demanding higher premiums, making it much harder to find affordable (or any) home and fire insurance.

But it is not just California; homeowners in other areas prone to weather events like Florida, Louisiana, and Texas are also facing challenges.

“It has evolved from a very regional crisis impacting few areas to a much bigger crisis,” said Amy Bach, executive director of United Policyholders, a personal insurance consumer advocacy group based in San Francisco.

Nationally, home insurance premiums shot up an average of 21% between May 2022 and May 2023, according to Policygenius, which analyzed internal policyholder data from renewals. And that’s on top of a roughly 12% increase the year before.

Some insurers have decided to leave certain markets altogether, making it even harder for homeowners to protect what is often their most valuable asset.

For example, last May, State Farm, California’s largest home insurer, announced it would pause issuing policies in the state, citing wildfire risks. That came after Allstate also stopped issuing policies in the Golden State. Meanwhile, in hurricane-battered Florida, Farmers Insurance deemed it too risky to continue insuring homes and pulled out of that market entirely.

“With many carriers pulling out, that leaves other companies underwriting these really expensive policies,” said Michael Monaghan, a real estate agent with Coldwell Banker Sellers Realty in northern California. “Policies that cost $10,000 for a year? That is impossible for some buyers who have to pay that all at once [along] with their closing costs.”

The average cost of a homeowner’s insurance policy is $126 per month, or $1,516 per year, according to Value Penguin. But that varies significantly by location, from $57 per month in Vermont to $242 a month in Colorado. Many places require additional policies, and the cost will go up if you’ve filed previous claims.

The affordability and availability of insurance is one more worry in the current rough housing market, said Jennifer Branchini, a Compass agent in Pleasanton and president of the California Association of Realtors. A lack of options can push buying a home, in a market already the least affordable in several decades, further out of reach for prospective homeowners and hurt current homeowners’ odds of selling their homes.

“Buyers are facing high interest rates,” she said. “There is already a lack of availability and lack of affordability. And for many of the properties that are on the market you can’t obtain insurance? Or it is very unaffordable insurance?”

More severe storms

As climate change builds, a standoff has developed over who should pay the cost of insuring homes against ever-growing risks.

Last year was a record-breaking year for costly extreme weather. There were 28 weather and climate disasters in the US, each with losses exceeding $1 billion, according to the National Oceanic and Atmospheric Administration. By comparison, between 1980 and 2023, the typical annual average was 8.5 climate disasters, and the average for the most recent 5 years was 20.4 per year.

Disasters in 2023 included one drought, four floods, 19 severe storms, two tropical cyclones, one winter storm and one wildfire and surpassed the previous record of 22 events in 2020. Damages last year came to a total price tag of at least $92.9 billion, as costs from events in December are still being tallied.

Home insurance woes are becoming even more widespread

As insurance becomes scarcer and costlier, homebuyers are walking away from deals more often than in the past, said Bach of United Policyholders.

“Florida and Louisiana have been having extreme property insurance drama for a while, starting from Hurricane Andrew in 1992, then Hurricane Katrina in 2005 ,” Bach said. “The severity of the storms and the price tag of the repairs started to get insurers’ attention.”

Bach said that in places like Louisiana, insurers were shown the large-scale risk mitigations put in place in the face of more frequent and harsher storms, such as stronger levees.

“But I don’t think they are there yet,” she said. “Insurers are not yet accepting the value of risk reduction. They aren’t able to reduce prices, they aren’t willing to have it impact their underwriting. That is where the heart of the fight lies now.”

In the meantime, she said, on top of climate change, other issues are also pushing the risk and cost even higher.

“This isn’t just climate change, it is climate-change-plus,” Bach said. It is climate change, plus the Covid hangover pushing costs up, plus inflation , plus technology that allows insurers to evaluate risks in a wider array of ways.

Her organization, whose main focus was once helping those impacted by disaster to recover money from insurance companies, is now primarily devoted to working on insurance availability and affordability issues.

Still, Bach said, it is important to keep the crisis in perspective. In California, for example, the share of homeowners using FAIR plan — the insurer of last resort made up of a syndicated fire insurance pool comprised of all insurers licensed to issue property and casualty in the state — remains under 5%, according to the California Department of Insurance.

But competition isn’t coming to save the day.

While insurers have always dropped out of markets or changed their conditions in reaction to a policy, Bach said a competitor would always move in.

“Competition would, in fact, heal the wound,” she said. “But that isn’t happening now.”

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Assigned Risk Insurance

Consumer Services And Help

California High Risk Insurance

Consumer resources for ca car insurance..

CA Auto Insurance Consumer Resources Online

Get help and insurance quotes from California Assigned Risk Insurance Customer Quoting Service (657) 217-8484.

CAARP-ARAIP-PAIP-CAIP-AIP Assigned Risk or High Risk automobile residual insurance markets consists of licensed drivers unable to purchase automobile insurance through the Voluntary Market due to a variety of factors, such as their driving history, accident history or status as a first-time driver. The CA auto insurance Assigned Risk or CA High Risk Automobile Insurance Plan often charges higher rates in your state, and is a last resort for licensed drivers that cannot obtain car insurance coverage elsewhere in the California preferred or voluntary automobile insurance marketplace. To combat soaring insurance prices experts recommend educating yourself and then obtain California Car Insurance quotes from at least two sources.

Consumers may request one or several free car insurance quotes at (657) 217-8484.

Save money with California free auto insurance quotes below. Enter your information below for California car insurance companies that want your business today.

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An informational consumer guide on California assigned risk auto insurance and preferred risk CA automobile insurance. What is the Latest on CA ARP – California High Risk Auto Insurance? SUMMARY

SB 858 would require the California Automobile Assigned Risk Plan (CAARP) to provide agents and insurers, upon request, with confidential policyholder information for the purpose of allowing the requesters to offer CAARP policyholders competing auto insurance coverage.

What is the difference?

CAARP Existing law

1. Requires the Insurance Commissioner to approve an “assigned risk” plan for automobile insurance, known as CAARP (California Automobile Assigned Risk Plan). Drivers who are unable to obtain insurance coverage from the voluntary market are “assigned” by CAARP to specific insurance companies on a fair share basis.

2. The Insurance Information and Privacy Protection Act requires insurers, agents and insurance-support organizations to protect the confidentiality of policyholder information. According to the Department of Insurance CA (DOI), information submitted to CAARP is covered by this Act.

3. The Information Practices Act, and other state laws, generally require the DOI and other state agencies to protect the confidentiality of information provided to the government. In addition, the provisions of CAARP state that specified information provided by the Plan to DOI regarding applicants shall be kept confidential by CA Dept of Insurance.

What is proposed and what will it change?

1. Includes legislative intent to require CAARP to make available to insurers, agents and brokers, on request, information about CAARP policyholders in order to allow these insurers, agents and brokers to offer CAARP policyholders insurance coverage through a source other than CAARP.

2. Would require CAARP to provide policyholder information in both paper and electronic form upon payment of a fee covering the cost of producing the information. The requester shall have the option of receiving information on a statewide basis or by geographic region. The information shall include all of the following:

“(1)The name and address of each named insured who applied for a plan policy within the previous 12-month period.

“(2)For each vehicle insured by the policy, the description, vehicle identification number, and garaging address.

“(3) For each driver listed on the policy, the name, age, gender, marital status, and driver’s license number, and whether the driver is required to file proof of insurance with the Department of Motor Vehicles pursuant to Division 7 (commencing with Section 16000) of the Vehicle Code.

“(4)Coverages and limits requested.”

3. Would require that this confidential information could only be used for the purpose of offering auto insurance, excluding CAARP coverage. Any requester must agree to indemnify CAARP with respect to any liability related to the use of the information.

4. States that the insurance-related information provided under this bill is subject to the restrictions set forth in the Insurance Information and Privacy Protection Act.

Why would my California auto insurer cancel my policy?

Technically, in most states your insurer may cancel your policy only if: you fail to pay your premium; you lose your driver’s license; you are guilty of material misrepresentation during the application process i.e., you fail to notify your insurer of a recorded violation, such as a drunken driving, or possession of drugs or any illegal activity offense; or you fail to report a substantial change of risk, such as buying a new high performance sports car to replace an old high mileage family sedan.

However, your insurer can choose not to renew your policy for a variety of reasons. Do you have a bad driving record? Have you received a lot of speeding tickets? Have you ever been caught driving drunk? Not only are these scenarios considered unsafe and illegal, they are justifiable cause for your insurer to label you a bad risk and refuse to renew your policy. Some underwriters may feel compelled to cancel policies after only one accident. Where do you live? Has the neighborhood changed in the last few years? Have the accident or crime rates risen noticeably? As regions are reassessed periodically, their status could change and you could suddenly find yourself living in a higher risk area, where your insurer’s rates may not be adequate to cover losses.

What do I do if my California Insurance Company cancels or refuses to renew my CA Auto Insurance policy?

Even “good” drivers can find themselves in the position of being dropped by their current carrier. Reasons range from a couple of moving violations, or multiple accidents, or other serious violations that make you a high risk to situations outside your control, such as when insurers in your state are suffering severe business losses. Overall rises in claims or losses can cause insurers to become highly selective in determining whom they can afford to offer to insure. That is why it is important to note that if you are licensed to drive, by law, you are eligible for insurance. However, your options for new coverage may be limited. Each state has created and regulates a market of last resort for those who cannot otherwise obtain coverage. These groups have various names, depending on the state you live in, such as assigned risk automobile insurance plans or the residual market, or the high risk pool. Your agent or insurance producer will know more about the particulars in your state. Regardless of the reason you were dropped or canceled by your insurer, you need to act immediately to get another policy. Under no circumstance should you drive your vehicle without knowing one hundred percent that you have current insurance. Call your local agent to help you find new coverage. If you do find yourself in the assigned risk residual market pool, the price may be higher but it may be your only alternative in maintaining your freedom to drive.

How do I keep my insurance company from canceling my policy?

The most obvious way to maintain your low risk status is to keep a clean California DMV driving record. If you’ve been in an accident, consider taking a defensive driving course. Even those of us who have been driving for years rarely know the simple tricks to preventing accidents through defensive driving. Also, look into purchasing special safety and security features for your car, such as anti-lock brakes and an alarm system, or try OnStar. Your CAARP insurance agent can give you further tips on how to convince your insurer you’re a safe driver.

What steps can I take to reduce my CA Car Insurance rates?

California Insurers often discount their rates in order to encourage good driving practices and the use of safety and security precautions. Depending on the insurance company, you can often lower your rates from 5 to 55 percent. Sometimes the investment you make in your vehicle is worth the discount, and sometimes it’s simply worth some peace of mind. For example, the purchase of anti-lock brakes merits a discount from nearly every insurer, but the discount probably will not pay for the brakes which cost several hundred dollars during the normal life of your vehicle. Anti-lock brakes are touted, nonetheless, as a life-saving feature and deserves serious consideration when safety is a top priority. Insurers generally offer discounts for: Safety Features Anti-lock brakes, air bags and passive restraint systems i.e., automatic seat belts. Defensive Driving Clean violation record, driver’s education courses for teenagers and defensive driving or accident prevention courses for adults insurance discounts for the latter are required in some states. Security Systems Alarms, electronic locks, VIN etching and automotive disabling devices. Changing The Driving Habits Try commuting by public transit, using a company vehicle for work-related travel and car-pooling. Formal Agreements Not to Drink and Drive The availability of a discount for signing such an agreement varies among insurers and states, however is a powerful idea that works. Buying Home Owners and Auto Policies from the Same Company If you own a home and an automobile and you are insured by two different companies, check into the cost of carrying both policies by one insurer. Your agent can give you guidance as to which insurers offer discounts. This will always offer your the best buy, so put it in your corner when shopping for rates You can also lower your insurance rates by requesting higher deductibles, which is the amount of money you pay out of pocket before you make a claim. Increasing your deductibles on collision and comprehensive coverage from $100 to $250, or even $500, will bring your rates down. Moreover, you may not need collision and comprehensive coverage if you drive an older car. Ask your agent which discounts are available to you.

How does adding drivers to my policy affect my rates?

The more people you allow to drive your vehicle on a regular basis, the greater the chances of your vehicle being in an accident. Teenagers are especially expensive to insure because they are the least experienced drivers. A driver’s-ed course can help ease the burden of insurance costs since it teaches your teenager defensive driving techniques. If your child’s high school does not offer driver’s-ed, try to find one offered by another school or a private firm in the area. After all, the cost of driver’s-ed could be cheaper than the extra cost of your insurance. Many insurers offer “good student” discounts as well. An adult’s driving experience can also affect your rates significantly. Don’t assume that every adult you know has been driving since age 16 or 17 or is a competent driver with a clean driving or insurance record. Again, taking a defensive driving course is a good way for adults to prove they are also responsible drivers, thus lowering their risk and their insurance premium rates.

Finding the best coverage and lowest prices for Automobile insurance is not that difficult to shop for. Rates vary widely from company to company. To help make shopping, comparing rates and saving money on your insurance easier, Assigned Risk Auto Organization provides free auto insurance comparison rates 24 hours a day, seven days a week. Get competitive non biased help with Receive a quote from our consumer comparison rating service any time day or night, over the Internet. Spend a couple of minutes answering a few questions about yourself, your driving record, vehicle information and insurance needs. Local Assigned Risk Insurance Agents will tell you how much their company would charge you for an annual premium for your automobile insurance, in addition to rate comparisons from other major auto insurers including most household name brand insurance companies in your specific zip code.

Getting yourself out of the CA high or assigned risk driver pool category is going to take a little time. You may need to consider the following, cleaning up a bad driving record and paying your bills on time. And some factors will fade with time. Most insurance companies rate a driver with no points for three years as a good or preferred risk. But there are a few things you can do to cut high risk auto insurance costs now! Consider driving an older car and dropping collision and comprehensive coverages. Or, if you can accept the risk, carry lower amounts of other standard coverages. And don’t forget that shopping online is a great way to access assigned risk automobile insurance CAARP certified producers and companies that serve Local Consumers in our area. You may even be able to comparison shop between several offers. If you get a FREE QUOTE from each of the national quoting services you will have the best service from someone Local in your area .

What’s Assigned Risk Auto Insurance?

Assigned risk auto insurance is state-sponsored coverage for high-risk drivers who can’t secure insurance coverage elsewhere. it usually comes with more expensive premiums..

Aly J. Yale

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Bylines include Forbes, Bankrate, and CBS News

Aly is a reporter specializing in real estate, mortgages, and personal finance. You can find her work in Hearst newspapers and numerous financial publications.

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Courtney Mikulski

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Updated January 23, 2024 at 11:00 AM PST

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Table of contents

  • What is assigned risk?
  • How it works
  • Who qualifies?
  • Standard insurance
  • Leaving assigned risk

Table of contents Compare quotes

Assigned risk auto insurance is an option for drivers who have trouble securing a standard car insurance policy, often due to a poor driving record, a low credit score, or because they live in an area at high risk of theft or vandalism. [1]

States establish assigned risk auto insurance programs and require private insurers to participate. Drivers get coverage by applying to their state’s risk pool, and the state assigns them an insurer. While insurers can’t deny eligible drivers coverage through this program, assigned risk car insurance policies aren’t cheap . [2]

Here’s what you need to know about assigned risk insurance, and why it’s important to compare rates from multiple companies before applying for assigned risk coverage.

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State-minimum policies start at $22 per month

What is an assigned risk auto insurance pool?

An assigned risk auto insurance pool is a state-supervised insurance market for high-risk drivers who can’t secure private-market car insurance. These are also called shared insurance markets, as they spread the risk of these higher-risk drivers among various insurance companies in the state.

Drivers can apply for their state’s assigned risk pool, and the state will assign them to an insurance company that must provide them coverage.

Pros and cons of assigned risk car insurance

Guaranteed coverage: Assigned risk insurance guarantees all drivers can get state-minimum coverage — regardless of their driving record, credit score, driving history, or other factors.

Helps drivers comply with law: Most state laws require car insurance, and drivers who don’t have coverage can face fines or criminal charges.

Provides legal protection: Beyond ensuring drivers comply with the law, liability coverage also helps protect you if another driver sues you for damages or injuries.

More expensive rates: Because assigned risk insurance is for higher-risk drivers, premiums are more expensive on these policies than on traditional car insurance. [1]

No choice in insurer: The state assigns drivers participating insurers within the pool, so drivers can’t comparison shop for insurance .

Limited coverage: Assigned risk pools typically only offer the minimum coverage the state requires. Drivers may not have access to additional coverages for more protection.

How assigned risk car insurance works

To get assigned risk car insurance, find your state’s assigned risk insurance pool. For example, in Ohio, it’s the Ohio Automobile Insurance Plan (OAIP). High-risk drivers in New York can use the New York Automobile Insurance Plan (NYAIP) for coverage.

You’ll then apply for your state’s pool using an official application. You can often do this online or by contacting a certified insurance broker or agent within your state.

Once the state approves you for the assigned risk pool, it’ll match you with an insurance company. The insurer assesses your driving record, credit score, location, vehicle, and other factors to determine your policy’s rate. Your coverage amounts and any driving convictions will affect your costs. For example, Texas assigned risk plans require a 60% additional charge if you have a driving under the influence (DUI) conviction. [3]

Who qualifies for assigned risk auto insurance?

Assigned risk car insurance eligibility requirements vary by state. In some states, you may need to certify that you’ve applied for and been denied private market car insurance in a certain period. In others, you just may need to be a resident of the state, have your car registered there, and hold a valid state driver’s license.

You also must be up to date on your recent car insurance premiums. For example, in North Dakota, you’re ineligible if you have any late premiums in the past year.

How to Get Car Insurance With a Suspended License

How to Get Car Insurance With a Suspended License

Factors that make a driver “high risk”.

Assigned risk insurance is for high-risk drivers, though this doesn’t mean only drivers with incidents on their driving records. Insurance companies may deny you traditional coverage for many reasons, including: [1]

Having no or a bad driving record: Inexperienced drivers, particularly teenagers , may find it difficult to get traditional car insurance coverage, as they’re at a higher risk of potential accidents. Plus, having speeding tickets , at-fault accidents, moving violations, DUI convictions, and more on your record can make you a high-risk driver for insurers.

Lapses in coverage and payment: If you’ve regularly let your insurance coverage lapse or forgotten to pay your premiums, this also makes you a higher risk to insure.

Bad credit scores: Depending on your state, insurance companies may be able to use your credit score to indicate your risk as a policyholder. Insurance companies believe drivers with poor credit are more likely to file a claim. [4]

Living in a risky location: Some areas have higher chances of theft, vandalism, or accidents. If you live in a high-risk area, you may have trouble securing traditional coverage.

Driving a unique or special car: Driving a custom, high-performance, unique, or classic vehicle could put you at higher risk for theft — and make you a higher risk for insurers.

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Assigned risk vs. standard auto insurance.

While assigned risk insurance plans ensure drivers can secure the minimum required coverage for their state, they’re not the same as standard car insurance policies. Here’s how these policies differ.

How to leave the assigned risk pool

Leaving the high-risk pool depends on why you’re a high-risk driver in the first place. If you have a traffic violation or accident on your record , you may need to wait until the incident falls off your record to qualify for a traditional car insurance policy.

You can work on leaving the assigned risk pool by:

Cleaning up your driving record: In some states, you can take defensive driving courses to dismiss violations or citations. This could help you more easily secure insurance coverage.

Improving your credit score: A better credit score may make it easier to get coverage, too. Paying your bills and debts on time, disputing errors on your credit report, and reducing your debts can help boost your score.

Driving a safer car: If you’re buying a car, consider one with high safety ratings, low theft rates, and anti-theft features. The less likely you are to file a claim, the lower your risk to insurers.

You can also simply wait it out. As you establish a record of driving safely and pay your insurance premiums on time, you become a lower risk to insurers. Some state plans require insurers to provide coverage for an extended period while you work to improve your insurance and driving records. In New York, insurers must cover you for at least three years before they can choose not to renew your policy.

Car Insurance for High-Risk Drivers in New York (2024)

Car Insurance for High-Risk Drivers in New York (2024)

Assigned risk auto insurance faqs.

Assigned risk auto insurance can be confusing, but it’s necessary for high-risk drivers who can’t buy coverage elsewhere. If you need more information regarding assigned risk insurance, see the answers to frequently asked questions below.

What is an assigned risk car insurance plan?

An assigned risk car insurance plan is a state-supervised insurance plan. Statewide insurers must participate in the plan and provide coverage to any eligible driver the state assigns to them. These plans typically come with much higher rates than traditional car insurance policies

What does “high risk” mean in auto insurance?

“High risk” means a driver is more likely to file a claim. High-risk drivers are usually drivers with poor driving records, low credit scores, little driving experience, or a history of not paying previous car insurance premiums.

Who writes assigned risk car insurance policies?

Private insurance companies write assigned risk car insurance policies. The state requires companies to participate in the assigned risk market and assigns these insurers to eligible drivers.

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Aly J. Yale

Aly J. Yale is a freelance writer and reporter covering real estate, mortgages, and personal finance. Her work has been published in Forbes, Business Insider, Money, CBS News, US News & World Report, and The Miami Herald. She has a bachelor’s degree in radio-TV-film and news-editorial journalism from the Bob Schieffer College of Communication at TCU and is a member of the National Association of Real Estate Editors.

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COMMENTS

  1. California FAIR Plan Review: Last-Resort Coverage

    The bottom line. The California FAIR Plan is a state-mandated program founded in 1968 that provides basic home insurance coverage to high-risk homeowners who've been denied coverage by standard insurers. As an insurance pool, all licensed insurance companies in the state are required to write policies and share in paying out claims through the California FAIR Plan.

  2. The FAIR Plan Explained and How To Get This Policy

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    Coverage for individually owned residential properties and personal property of tenants and condo owners through the California Earthquake Authority (CEA). Need more coverage?

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  7. Compare FAIR Plans for High-Risk Home Insurance

    Updated Jan 10, 2024 FAIR plans are homeowners insurance plans that help provide coverage to high-risk homes. FAIR insurance coverage is different for each state. Most plans offer a maximum of $500,000 to $600,000 of protection for the structure of your home. Some states allow you to add extra coverage, like protection for your personal property.

  8. California homeowners insurance: A complete guide

    California homeowners insurance can cover property damage and liability risks. Home insurance rates in California are lower than the national average but carriers are leaving the state. California law does not require homeowners insurance but does include some protections for policyholders regarding fair claims management.

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  11. California Automobile Assigned Risk Plan (CAARP)

    The California Automobile Assigned Risk Plan is the state's residual auto insurance market, which is also called the nonstandard market. Consumers may use CAARP if: They can't find an insurer in the regular market to give them a quote. They can't access cheaper car insurance that better-rated drivers get.

  12. Best high-risk homeowners insurance companies (2024)

    Homeowners insurance / How to buy homeowners insurance / Second home insurance / Best high-risk homeowners insurance companies (2024) The best high-risk home insurance companies in 2024 are State Farm, Allstate, AIG, Stillwater, and Foremost. Find the best high-risk homeowners insurance for your needs today. By Pat Howard Edited by Jennifer Gimbel

  13. Best Homeowners Insurance in California (2024)

    The average cost of homeowners insurance in California is $115 per month or $1,383 per year for $300,000 in dwelling coverage, according to our latest insurance pricing analysis. While the average home insurance premium in California may be relatively low compared to the national average, record wildfire losses and high inflation have led many ...

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    Phone Numbers. Main number: (213) 487-0111. Toll free number: (800) 339-4099.

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    After State Farm said it would stop selling new home insurance policies in California, Insurance Commissioner Ricardo Lara responded that the state will explore new rules allowing insurance companies to consider climate change when setting their rates.. But companies will only get to do this if they agree to write more policies for homeowners who live in areas with the most risk, including ...

  18. What to do if your California home insurance cancels you

    More than 348,000 California homeowners insurance policies in wildfire risk areas have been dropped since 2015, according to data released by the California Department of Insurance. Wildfires can cost California insurers billions of dollars, and as a result, they are one of the common reasons companies are increasing rates or dropping high-risk homeowners policies.

  19. High Risk Homeowners Insurance Help Available

    Vacant Dwellings Builders Risk Risks with losses Lapse in coverage High Valued Homeowner Programs Coastal Risks Distressed risks Vacant homes Builders Risk Personal Liability Umbrella Admitted markets & Non Admitted Stand alone CPL available Limits up to $10,000,000 Excess Umbrella Coverage High profile insured's

  20. What homeowners need to know as insurers leave high-risk climate ...

    Without insurance, many homeowners can find themselves in big financial trouble. Darlene Tucker, 66, and Tom Pinter, 68, are longtime homeowners in Sonora, California.

  21. Storms in California hit homeowners already facing an insurance crisis

    In California, for example, the share of homeowners using FAIR plan — the insurer of last resort made up of a syndicated fire insurance pool comprised of all insurers licensed to issue property ...

  22. What is the California Assigned Auto Risk Plan (CAARP)?

    The California Automobile Assigned Risk Plan is the state's residual or non-standard car insurance marketplace — that just means it's a special program for drivers who can't find car insurance coverage in California the normal way.

  23. California High Risk Insurance

    The CA auto insurance Assigned Risk or CA High Risk Automobile Insurance Plan often charges higher rates in your state, and is a last resort for licensed drivers that cannot obtain car insurance coverage elsewhere in the California preferred or voluntary automobile insurance marketplace.

  24. What's Assigned Risk Auto Insurance?

    Assigned risk auto insurance is an option for drivers who have trouble securing a standard car insurance policy, often due to a poor driving record, a low credit score, or because they live in an area at high risk of theft or vandalism. [1] States establish assigned risk auto insurance programs and require private insurers to participate.