Insurance in California: A Guide to Auto & Home Coverage
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California is a large and diverse state with varying climates, city sizes, and more. This diversity also comes with a wide range of insurance options, which can make California’s insurance laws and processes seem overwhelming. Below, we look to streamline the insurance landscape for you by exploring the various types of insurance, insurance costs, factors affecting premiums, available resources, and more.
Types of Insurance Coverage Available in California
You have several main types of insurance in California that protect specific parts of your professional and personal life. The typical insurance policies in California are:
- Auto insurance
- Home insurance
Let’s review each so you have a firm understanding of them.
Auto Insurance in California
You must have proof of financial responsibility to operate a vehicle in California. The most common way to prove this is having state-mandated motor vehicle liability insurance.
Car insurance companies in California also offer various optional coverages for additional protection, including:
- Collision coverage: Covers damage to your car caused due to a collision with another vehicle or object.
- Comprehensive coverage: Covers damage to your car caused by something other than a collision, such as theft, fire, flood, and vandalism.
- Uninsured/Underinsured motorist coverage: Provides coverage if you're in an accident with someone without insurance or with insufficient coverage.
Auto insurance premiums vary greatly in California based on factors such as age, vehicle year, make and model, driving history, claims history, and more.
Having at least the state minimum in car insurance coverage is critical to owning a vehicle. If you're in an accident with insufficient insurance coverage in California, your license will be suspended for up to four years. However, you can get your license back after just one year if you provide a California Insurance Proof Certificate and keep the insurance coverage in place for the last three years of your suspension.
Home Insurance in California
Homeowners insurance protects you from financial loss caused by damages to your home or injuries to others on your property. The typical California home insurance policy includes the following coverages:
- Dwelling protection: Protects your house and any attached structures, such as an attached garage, damaged by a covered event
- Other structures: Protects unattached structures on the property, such as a shed or detached garage
- Personal property: Protects your home’s contents and other personal belongings you or other members of the household own
- Loss of use: Helps pay additional living expenses if you cannot live in your home due to covered damage
- Personal liability coverage: Protects you and other household residents if you’re legally responsible for injuring others
- Medical payments to others: Covers medical expenses for anyone accidentally injured on your property
Given California's unique risks, such as earthquakes and wildfires, many homeowners opt for additional coverage options to protect from these natural disasters.
These natural disasters can also make it challenging to secure commercial homeowners insurance. This is where the California FAIR plan can provide you with temporary basic fire insurance coverage.
Fortunately, California has a relatively good climate and is mostly sunny year-round. Hurricanes are a rarity in the state, so you generally don't have to worry about getting extra coverage for damage from natural disasters, such as hurricane coverage.
With this coverage in place, you're protected from just about any financial losses you could experience with your home or property. It also shields you from lawsuits if someone gets injured on your property or by someone or an animal living in your home.
Average Cost of Insurance in California
California insurance costs vary greatly depending on the type of insurance you get, the risk factors, coverage amounts, and more. Common insurance policies and their statewide average costs include:
Auto insurance: $668 annually for state minimum coverage and $2,810 annually for full coverage.
Homeowners insurance: $1,250 annually
It's important to remember that these are just averages. You exact premiums will vary based on a wide range of factors. Getting an online quote is the best way to determine how much your insurance coverage will cost you. Next, we'll look into some of the factors that impact these premiums.
Factors Affecting Insurance Rates in California
Various factors impact insurance rates in California. Two big ones are the risk of wildfires and earthquakes in the state. These factors can significantly impact home, and auto insurance. On the other side, California generally has a great climate with a lot of sunshine, so hurricanes, flooding, and other climate event that can increase insurance rates are not an issues. This likely plays a big role in why its average homeowners insurance is 35% less than the national average.
Also, large, dense cities like San Francisco, Los Angeles, Oakland, and others have a higher risk of theft, vandalism, and car accidents, impacting home, business, and auto insurance premiums. This added risk can also increase your premiums.
Useful California Insurance Resources
You can leverage various resources to guide you through insurance in California, such as :
If you’re searching for cheap car insurance in California, check out EverQuote. We allow you to compare multiple car insurance quotes and find the best California auto insurance for you.