Homeowners Insurance in California

The most common form is the HO-3. It usually covers the house against any cause of loss the policy doesn't exclude, while your belongings are covered for a named list of causes such as fire, theft and water from a burst pipe. That difference matters if you ever compare it with the narrower, named-peril policy the FAIR Plan sells.

Coverage A drives most of the price and most of the risk. The California Department of Insurance (CDI) says the dwelling limit should equal the cost to rebuild, not the purchase price or market value, and notes that many homes were underinsured after past California wildfires. We go over the carrier's rebuild estimate with you: square footage, construction, roof and any remodel since you moved in.

• Actual cash value (ACV): the cost to repair or replace, minus a deduction for depreciation. Lower premium, bigger gap after a loss.
• Replacement cost: repair or rebuild without that deduction, up to your limit. Many policies pay the ACV amount first and the rest once repairs are underway.
• Extended replacement cost: a cushion above your dwelling limit, set as a percentage or dollar amount, for when rebuilding costs more than planned, such as during a demand surge after a large disaster.
• Building code upgrade (ordinance or law): the extra cost of rebuilding to today's codes. Some policies leave it out, and older homes can need a lot of code work after a big loss.

Earthquake coverage is a separate policy, from the California Earthquake Authority or a private insurer. Your home insurer has to offer it in writing every other year, and if you don't reply within 30 days, that counts as a no. Our page on earthquake insurance in California explains percentage deductibles and retrofit discounts.

Flood coverage is separate too. FEMA's FloodSmart program says most homeowners insurance does not cover flood damage, so a house near a wash or creek bed deserves a second look. One bright spot: California law requires your homeowners policy to cover fire caused by or following an earthquake.

Two similar houses can get very different answers. A home with a Class A roof on a newer street may draw quotes from more than one carrier, while one that backs onto open brush may get one offer or none, because carriers score wildfire risk for each property.

The CDI's Sustainable Insurance Strategy, completed in December 2024, lets insurers use wildfire catastrophe models in their rates if they commit to writing more policies in wildfire-distressed areas. Mercury and Travelers are both on the CDI's 2026 list of companies committing to stay and grow, and Travelers has told the CDI it plans to expand homeowners coverage statewide.

• FAIR Plan dwelling policy: fire and lightning, internal explosion and smoke. Vandalism and malicious mischief can be added for an extra cost.
• DIC policy: a separate policy from a different insurer, built to sit alongside the FAIR Plan. It typically adds water damage, theft and liability.
• The trade-off: two policies, two bills and two companies to call after a loss, in exchange for keeping the house insured.

If your home lands there, we'll explain how the FAIR Plan and DIC pieces fit together, then shop the standard market again at every renewal. Our California FAIR Plan guide goes deeper on how the plan works and what it leaves out.

• A reason and a way to push back. The notice must state the reason, list a phone number for the insurer's consumer staff, and explain how to ask the Department of Insurance to review it.
• Where to look next. A home non-renewal notice must also describe the FAIR Plan, DIC policies and the CDI's online Home Insurance Finder (opens in a new tab).
• Wildfire moratoriums. After a declared wildfire emergency, insurers can't cancel or non-renew homes in ZIP codes inside or next to the fire perimeter for a year just because the fire happened. After the January 2025 Hughes Fire, that covered ZIP codes from Valencia to Castaic, including 91355 and 91384.

Don't wait for the last few weeks. Call us with the notice in hand so we can start shopping while you have time. Our home insurance non-renewal guide lays out the timeline, and the CDI hotline (800-927-4357) can review the insurer's reason.

• The house: a Class A fire-rated roof, ember- and fire-resistant vents, enclosed eaves, multi-pane windows or shutters, and 6 inches of noncombustible material at the base of exterior walls.
• The yard: a 5-foot ember-resistant zone (including swapping attached wood fencing for metal), cleared space under decks, combustible sheds moved at least 30 feet away, and defensible space that meets state and local rules.
• The neighborhood: a recognized Firewise USA site or Fire Risk Reduction Community.

Discount size varies by carrier and isn't automatic. Mercury, for example, reviews photos of mitigation work sent through your agent, so photograph each project when it's done and email us the pictures. The full list is on the CDI's Safer from Wildfires page (opens in a new tab), and our article on wildfire risk and home insurance in Santa Clarita covers the local side.

Insuring something other than the house you live in? See condo insurance for HO-6 policies and landlord insurance for rentals we can quote with carriers like Steadily and Obie. If you also have two cars, our home and auto bundle page explains how we price it both ways.

We quote homes across California from one office in Valencia, by phone, email and e-signature. Local guides: Santa Clarita, Bakersfield, Palmdale and Lancaster, Ventura, Orange County, Modesto and Turlock.