Geico and Mercury: Cheapest Insurance in California
According to a recent survey by Clearsurance.com, Geico and Mercury are the cheapest home insurance providers in California.
Geico writes policies nationwide, while Mercury Insurance writes policies in only a few states, specializing in California coverage.
Top 10 Home Insurers in California.
Clearsurance.com’s list of top 10 insurers in California with monthly rates is as follows:
- Geico – $67
- Mercury – $70
- AAA – $75
- Traveler’s – $85
- State Farm – $90
- Allstate – $95
- Nationwide – $100
- Farmer’s – $110
- Amica – $125
- Chubb – $150
The premiums listed above represent what a customer would pay for $200,000 of home insurance coverage. Finding a $200,000 home in California is nearly impossible in most areas, so customers should expect higher premiums to reflect the home’s actual value.
Geico’s rates continue to be the lowest on average, even when home values increase. Geico is often a top contender for low-cost home insurance. They are also rated the cheapest home insurer in Florida.
Insurance Complexities in California
California homeowners face risks that aren’t common to residents of other states.
California experiences earthquakes that can damage homes, and residents need earthquake insurance because standard home insurance does not cover earthquake damage.
Recently, wildfires have taken a primary role in home insurance claims in California. As a result, many homeowners are finding out that insurers are pulling out of the region or are excluding coverage for wildfires.
Those who can find coverage in a high-risk wildfire area may have a separate wildfire deductible that is much higher than a standard deductible. According to Clearsurance.com, it’s not uncommon to have a $20,000 deductible for a $400,000 home.
California FAIR Plan
Many California homeowners are turning to California FAIR Plans to secure home insurance. If a homeowner is unable to get coverage through the competitive marketplace, they can use a FAIR Plan as a last resort.
These plans are expensive, their coverage is limited, and the program struggles to fund and pay claims. Still, when there are no options, it’s better than nothing.
Melanie Musson, a nationally recognized insurance expert with Clearsurance.com, encourages homeowners struggling to find coverage to “look into property upgrades that lower risk and make the home insurable.”
Exterior sprinklers, metal roofs, and other measures can lower fire risk and help homeowners secure coverage in the competitive market.
California Home Insurance Discounts
Most home insurance providers in California offer a discount for bundling home and auto insurance. Each of the top 10 insurers in the state offers a bundling discount of 10% to 20%.
The most significant discount available is for having a claims-free status. Homeowners who don’t file a claim for three years or longer may be eligible for this discount that can save homeowners as much as 25%.
These providers also offer green home, loyalty, and home security discounts. When homeowners stack these savings, their premiums can be significantly reduced.
Home Insurance Protection
Home insurance covers a home’s structure, but coverage extends beyond just that. Homeowners can get a policy that covers external structures like garages, sheds, and barns.
Home insurance also covers personal belongings in the house, and even belongings outside the house, like luggage when traveling.
Standard insurance coverage protects the policyholder and their family against liability. If someone in the family inadvertently damages another person’s property or if a guest injures themselves on the policyholder’s property, liability coverage will provide protection.
If a home is damaged and unlivable, home insurance will cover temporary housing and additional living expenses while the property is repaired or rebuilt.
Deductibles and Premiums
The higher the deductible, the lower the premiums. Many homeowners choose a deductible as a percentage of their home’s insured value, but some choose a round number like $1,000 or $2,000. One of the easiest ways to pay lower premiums is to increase the deductible, thereby shifting risk from the insurance provider to the homeowner.
As with car insurance deductibles, homeowners are responsible for the deductible amount, and the insurance provider will cover costs above that, according to the policy terms.
As noted above, earthquake insurance is separate from home insurance and will have its own deductible. Additionally, in high-risk areas, wildfire coverage may have its own separate deductible.
For more information, read Clearsurance.com’s entire report here: Best and Cheapest Home Insurance in California.