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Average Cost of Homeowners Insurance in California, as of 2018

The vast majority of homeowners in California have a home insurance policy. Research conducted by the Insurance Information Institute (III) found that 95% of homeowners had some degree of coverage. But the cost of a home insurance policy in California can vary based on several factors, including the size of the deductible.

Fast facts from this article:

  • The average cost of home insurance in California is somewhere around $980, according to multiple sources.
  • Annual premiums can vary based on the size of the deductible, the type and extent of coverage, and other variables.
  • As a consumer, you have some degree of control over the cost of your policy.
  • Most mortgage lenders require home buyers to have a standard homeowners policy in place before closing.
  • Florida is the most expensive state in the country, when it comes to homeowners coverage.

Average Cost of Homeowners Insurance in California

The latest surveys for 2018 suggest that the average cost of homeowners insurance in California is somewhere around $980. That’s actually an average of the figures reported by several sources, including III and Insurance.com. But the size of your annual premiums could differ from this amount due to a number of variables (described below).

You might think that California would have a comparatively high cost of home insurance. After all, our state is home to some of the most expensive real estate markets in the country. But the dubious distinction of “most expensive homeowners insurance” goes to Florida. According to the sources mentioned above, and others, Florida has the highest average cost for home insurance of any state in the country.

As far as states go, California is actually near the middle in terms of the average cost of a homeowners policy. So residents are often surprised to discover that insurance costs are fairly reasonable within the state. If we divide the statewide average mentioned above ($980) over 12 months, we end up with a monthly premium of around $82. That’s a relatively small price to pay for the peace of mind a home insurance policy brings.

But again, the cost of homeowners coverage can vary. As a consumer, you actually have some control over the price of your policy. So let’s talk about that next.

Variables That Influence the Price

The latest data for 2018 indicate that the average cost of home insurance in California is just below $1,000 per year. Some homeowners pay more than that amount, while others pay less. But why?

There are a number of factors that can determine the final cost of a home insurance policy. These include the location of the house, liability limits, the deductible amount, and the type of coverage. Let’s look at two of the most important variables — the deductible and the coverage type.

Deductibles: With any kind of insurance policy, the deductible is a pre-determined amount the policy holder must pay toward a loss, before the insurer covers the rest. The premium on the other hand is the basic cost of the policy (i.e., the amount you pay each month). California homeowners can often lower their annual premiums by choosing a higher deductible amount. This is one area where you, as the homeowner, have some control over the cost of your home insurance policy.

Market value or replacement cost: There are different types of coverage for homeowners, and the option you select can affect the overall price of the policy. For instance, purchasers can often choose between market value or full replacement cost. Many consumer advocates recommend replacement cost coverage, because it insures you for the amount that would be needed to rebuild the home if it were destroyed or seriously damaged.

Mortgage questions? Bridgepoint Funding has been helping California homeowners and home buyers with their mortgage needs for more than 16 years. Please contact us if you have financing-related questions, or if you’d like to receive a mortgage quote.

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