The Cheapest Home Insurance in California for Wildfires
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California has wildfires, floods, landslides, earthquakes and severe weather events, not to mention eight potentially active volcanoes. Considering these perils, California homeowners want to have complete confidence in their home insurance to protect their financial stability when natural disasters strike.
Does standard homeowners insurance in California cover wildfire risk? Is there specialized wildfire insurance? Yes and yes.
This article focuses on wildfires and the home insurance coverage options that are designed to protect California homeowners against non-structural conflagrations. Read on for wildfire-related insurance tips, information and recent news that will help you to find the cheapest, best homeowners insurance for you, your family and your house.
California Has the Highest Wildfire Risk in the U.S.
California is the worst state in the U.S. for wildfires. Let's take a look at some recent, eyebrow-raising statistics:
In 2020, the Golden State had the highest number of wildfires (10,431) in the U.S., with Arizona a distant second (2,524), according to the National Interagency Fire Center.
In 2020, the Golden State had the most acres destroyed by wildfires (4,092,151) in the U.S., with Oregon a distant second (1,141,613), according to the NIFC.
Ten of the top-20 biggest fires in California history happened in 2020 and 2021, according to the California Dept. of Forestry and Fire Protection.
What's more, eight of the 10 most costly U.S. wildfires have occurred in California, according to the Insurance Information Institute. When you're looking for homeowners insurance in California, these facts may well change your idea of what constitutes enough insurance coverage.
California's Most Vulnerable Wildfire Areas
The 2020 Wildfire Risk Report from CoreLogic, an Irvine, Calif.-based company that provides financial, property and consumer information, analytics and business intelligence, says the following seven metropolitan areas in California are the most vulnerable to wildfires, starting with the most vulnerable:
Wildfire survivors with homeowners insurance in California can contact the California Department of Insurance for help with insurance claims or policy questions at 800-927-4357 (HELP) and through online chat at insurance.ca.gov.
Home Insurance Companies Offer Fire Coverage
"A standard homeowners policy covers destruction and damage caused by fire, which includes wildfires," according to the Insurance Information Institute. "In the event of a fire, your insurance company will pay to rebuild or repair your home [and] remediate smoke damage. This includes the outbuildings on your property—such as a garage or toolshed."
So, California homeowners who purchase a standard homeowners insurance policy automatically have protection against wildfires. Let's look at the wildfire protection that the four standard homeowners products afford.
The dwelling coverage portion of your homeowners insurance policy pays to repair or rebuild the physical structure of your house and its attached structures, such as a garage, when your house is damaged by a covered hazard, such as a wildfire.
While flood and earthquake insurance are sold as separate products, fire insurance is automatically included in your dwelling policy. When looking for dwelling insurance in California, you should make sure you have enough coverage to rebuild your house just as it was before the damage. If your house is in an area that's especially prone to wildfire, your premium will reflect that reality.
Replacement Value vs Actual Cash Value
So, you want a policy that pays for the full replacement value of your house, not just the actual cash value of the house. In short, homeowners insurance policies based on actual cash value only pay for what the house is worth after accounting for its market depreciation and don't take into account the rising costs of building materials and local labor.
If the expense to rebuild your home exceeds your dwelling coverage thresholds, you could be stuck paying the balance yourself. Full replacement value pays for rebuilding your house as it was, despite any market inflation or the increased cost of building materials and local labor. You should always review your home insurance policy to make sure your coverage limits keep pace over time with rising costs.
Extended Replacement Cost
Many home insurance carriers offer extended replacement cost, which pays for rebuilding expenses if your dwelling coverage should run out. Having this insurance guarantees that your house will be rebuilt just as it was, no matter the cost.
If a wildfire devastates your domicile, personal property coverage reimburses you for your clothing, furniture, rugs, kitchen appliances, sports gear and electronics, among other personal belongings. Policy limits for personal property insurance are usually set between 50% and 70% of your dwelling coverage. For example, if wildfire damaged your $300 La-Z-Boy chair, you may only get a $150 reimbursement.
Create an Inventory
The best way to determine how much personal property coverage you need is to make a home inventory, listing all your personal property and how much it would cost to replace everything. Your personal property home inventory should include receipts, pictures, video and any other documentation you can find.
Extra Personal Property Insurance?
You can buy more personal property coverage if your current insurance limits are too low. While California's recently passed Senate Bill 872 stipulates that wildfire survivors no longer have to use a insurer-specific inventory form for lost contents and can include groupings of categories, rather than listing every individual item, it's always good to keep a home inventory. After all, you might move out of California.
Additional Living Expenses
If a wildfire has made your home uninhabitable, coverage for additional living expenses (ALE), or loss-of-use insurance, will pay for a hotel stay, restaurant bills, boarding fees for pets and laundry services, among other costs. Just like personal property coverage, ALE typically pays out based on a percentage of your dwelling coverage, but you can always up your policy's limits.
If a visitor to your house gets injured or their property gets damaged during a wildfire, liability coverage can help to make restitution. Liability insurance can help to defray the costs of ambulance rides, hospital stays, X-rays, surgical procedures, dental work, pain and suffering and lost wages as well as your own legal costs.
While liability covers both injury and property damage, guest medical protection only pays for your injured guest's medical payments, including smoke inhalation. Often added as a "rider" to your basic homeowners liability policy, guest medical protection covers medical payments when your liability runs out; this kind of policy typically has lower reimbursement thresholds than liability coverage and it can apply to a wider range of situations.
Other Fire-Related Insurance Company Products
Even if you sign up with one of the cheapest homeowners insurance companies, your premium will be greatly affected by how much insurance you choose to purchase. For some insurance customers, add-on protection might allow for peace of mind; for others, some add-on protection might be absolutely necessary.
Other Structures Coverage
This insurance product pays for structures on your property if they are damaged or destroyed by wildfire or another event, but these structures must be detached from your domicile: a stand-alone garage, guest house, gazebo, pool house or fence, for example. Just as with personal property coverage, this insurance product will pay out based on a percentage of your dwelling coverage.
Comprehensive Auto Insurance
Homeowners insurance companies do not underwrite cars, trucks, motorcycles, ATVs, boats or any other form of transportation. If a wildfire manages to damage or destroy your ride, comprehensive insurance will cover the cost. This type of auto insurance policy also pays out when your car is stolen. If you need a lower insurance rate, visit our auto insurance page and enter your zip code.
This type of home insurance pays to replace the trees, shrubs and plants on your property if they are destroyed by a wildfire. It will even pay to replace your lawn! Once again, the coverage is based on the percentage of your dwelling coverage, and most home insurance carriers in California have set dollar-amount limits for any one tree, shrub or plant.
Specialized Fire Coverage Options
Even the best home insurance companies may not offer specialized fire coverage. Just as you can purchase specialized insurance to cover the cost of your jewelry, artwork or other big-ticket items, you can purchase specialized fire insurance for an expensive home or other high-value properties. For example, if your house costs more than a million dollars to rebuild, you might want to check out these homeowners insurance carriers:
AIG Private Client Group Wildfire Protection Services
Chubb Wildfire Defense
PURE Program's Excess & Surplus Insurance for Wildfire-Exposed Homes
These companies offer at-home consultations, monitoring, mitigation, risk management and recovery services after a wildfire. For example, services might include removing combustible material from your property before a wildfire hits or removing the fire-blocking gel from your home after a wildfire is gone. The insurance premiums are all fairly reasonable—about $1,100 a year (AIG), $1,500 a year (Chubb) and $1,200 (PURE)—and their J.D. Power customer satisfaction ratings are all fairly high.
Recently, State Farm has extended its new Wildfires Response Endorsement to its policyholders in California. This endorsement, or "rider," is automatically included in any State Farm home policy at no additional cost.
Partnering with Wildfire Defense Systems Inc., State Farm provides risk-management services, including installing temporary sprinkler systems, monitoring and extinguishing hot spots, removal of brush, combustible vegetation and debris, and the closing of doors and windows. If you live in the Golden State, you might want to check out State Farm for this added layer of protection during wildfire season.
How Is My Homeowners Insurance Rate Determined?
When home insurance providers calculate the dollar amount of individual premiums, they will look at many factors, including a house's location, type and age. The insurance writer will also consider the financial stability of the insurance industry, the U.S. market and the global economy as well as, among other factors, the increased risk of wildfires and the number and amount of claims filed in your area and state.
Every company, homeowner, house and location is different, so every premium is different. But there's some good news for California residents: Insurance companies in California are forbidden from using your credit score to set your premium; further, they cannot use your credit score to deny or cancel coverage.
How To Lower Home Insurance Premiums
The national average cost for a standard home insurance is about $1,500 per year. On the other hand, the average cost of California home insurance is about $2,000 per year. In other words, California residents are not uninterested in acquiring affordable insurance coverage.
If you're looking for the cheapest homeowners insurance, you've got to shop around, comparing homeowners insurance companies and their respective policies. Just enter your zip code on this page to begin doing so for free.
Here are some ways to lower your home insurance premium:
Raise Your Deductible
According to the terms of your policy, a deductible is an agreed-upon dollar amount that you are required to pay toward a loss before your insurance company starts to pay a claim. The higher your deductible, the more money you can save on your premium. For example, if you were to raise your deductible to $1,000 from $500, you could save up to 25% on your overall premium.
Bundle Your Home and Auto Policies
If you purchase your home and auto insurance from the same insurer—for example, State Farm—State Farm will give you a bundling discount. You could save up to 15% if you buy more than one policy from the same company.
Make Your House More Wildfire-Resistant
Carriers that offer homeowners insurance in California may offer you a discount for make your house more wildfire-resistant, especially if your domicile (or business) is located in a wildfire-prone area. Use non-combustible siding, fences and gates. Get a Class A fire-rated roof. Keep the area around your house free of combustible materials (brush, shrubs, overhanging branches, a trailer). Install a safe space of gravel, brick or concrete around your house. Regularly clean you roof and gutters. Install multi-pane, tempers glass windows. Fireproof you deck. Upgrade vents to 1/8th-inch metal mesh. Replace your dryer vent with a self-closing vent. Enclose any open eaves when possible. These preventative measures could add up to a nice savings.
Beef Up Your Home Security
Smoke detectors, fire alarms, fire extinguishers and a sprinkler system, not to mention dead bolts and burglary detection devices, may well earn you a discount. For example, the Home Fire Sprinkler Coalition says a home sprinkler system could lead to a 35% discount. Before you make any big changes, however, talk to your licensed insurance agent about how much you would save on your premium.
Get Other Discounts
Not all insurers offer the same discounts at the same amounts. For example, you may qualify for a discount if you are retired: Since you're at home a lot more, you'll be far more likely to spot a fire before it gets out of control. Here are some other discounts to look for:
New home construction
Age of home (five years or less, 10 years or less)
Upgrades to electrical, heating and plumbing systems
Construction type (fire resistive, superior)
Advance purchase of insurance policy
Longtime company loyalty
Review Your Coverage Limits
If your new house or townhome is in an area that's less prone to non-structural conflagrations than your previous domicile, you probably won't need as much dwelling insurance. However, if your new northern California house is in an area that the California Earthquake Authority has designated as a hot spot for seismic activity, you should inquire about earthquake insurance, which is sold as a separate, stand-alone product. (Flood insurance coverage is also sold as a separate, stand-alone product. If you can't find flood insurance from a carrier in your zip code, the National Flood Insurance Program should be able to help.) You don't want to spend money on coverage you don't need. The best homeowners insurance reflects you life and your lifestyle.
NOTE: Due to the recent passing of Assembly Bill 2756 into law, home insurers in California must now inform a policyholder in writing if their policy does not cover the peril of fire or the carrier has removed fire as a covered peril.
Does Condo Insurance Cover Wildfires?
If a wildfire burns down your condo complex, your homeowners association's master policy will pay for damage outside of each individual unit and, depending on the master policy, some things inside each unit: appliances, electrical and plumbing systems, and perhaps carpets.
After the fire has been extinguished, your own personal condo insurance can help you to recoup the cost of repairing or replacing damaged or destroyed items that are within the walls of your condominium and not covered by the homeowner association's master policy. Further, it can help to pay for the loss of personal property and provide additional living expenses, even if the fire never reaches your condo but you have been ordered to evacuate.
Insurance policies for condos differ from carrier to carrier. When deciding upon coverage options, ask your licensed agent loss-of-rent insurance, personal injury coverage, personal/family liability, animal liability, guest medical payments, and protection against the back-up of sewers and drains.
Does Renters Insurance Cover Wildfire Damage?
A landlord's insurance policy won't cover your personal items or extra expenses, such as hotel stays and meals if the apartment is destroyed.
New California Law Addresses Wildfire, Insurance
The Golden State is suffering record wildfire losses, resulting in all-time-high rate increases, non-renewals and cancellations. Luckily for the consumer, California Governor Gavin Newsom recently passed Senate Bill 872 into law, which streamlines the claims process, provides larger payouts for some claims and cuts a lot of red tape:
A home insurance company can no longer refuse to include the value of the land when paying a total cost claim on a homeowners policy.
California homeowners under mandatory evacuation for wildfire, even if they suffer no damage to their home, will receive additional living expenses (ALE) for at least two weeks, with extensions for good cause.
Insurance companies in California cannot restrict coverage for ALE if a home is made uninhabitable due to a wildfire or other natural disasters, even if the damage is not to the property itself. For example, a home may be uninhabitable because of damaged power and water lines.
In cases of a total loss related to a state of emergency, companies that offer home insurance in California must provide an advance payment of no less than four months of ALE if the consumer requests it, with additional benefits due after the advance period upon proper documentation.
Home insurers must offer a 60-day grace period on payment of policy premiums for properties located within the affected area defined in the declared state of emergency.
Can't Find Homeowners Insurance Because Your Home Is in a Fire-Prone Area?
California's Fair Access to Insurance Requirements (FAIR) Plan provides access to insurance products for individuals living in wildfire-prone areas of California. State residents can apply for the plan if they own property in California and meet certain building requirements.
While the FAIR Plan provides coverage solutions for wildfire-vulnerable homes, homeowners may want to thoroughly exhaust their options available on the open market—FAIR plans are typically more expensive, but they offer fewer coverage options and lower policy limits. For example, the current California FAIR Plan does not offer personal property or replacement-cost dwelling coverages. Further, the plan will not cover houses with existing damage that have no repair plans, long-term vacant or unoccupied homes, and properties used for federally illicit means, such as growing marijuana. So, ask your agent.
SmartFinancial Makes Shopping for Cheap Homeowners Insurance Easy
You've got to shop around if you want to snag cheap homeowners insurance with affordable coverage. Don't let the constant barrage of advertising campaigns overwhelm you: The most popular homeowners insurance company may not be the company for you.
Of course, research is key in getting to know the home insurance companies in California and the products the home insurance industry offers. Check out the state's department of insurance, the National Association of Insurance Commissioners, other home insurance-related websites (Quadrant Information Services, the International Risk Management Institute) and, say, your family's and friends' relative customer satisfaction with their policy and insurer.
Or you could just call SmartFinancial, which acts as an independent insurance agent, sorting through all the best homeowners insurance policies with the most affordable premiums in your area, all at no cost to you.
Using artificial intelligence, machine learning and its proprietary algorithms, SmartFinancial can pinpoint the right policy and the right insurer for you and your budget. Just enter your zip code below or call 855-214-2291 to speak with a live agent.