California’s 17% cheaper home insurance isn’t as affordable as it looks

Tampa, Fla., November 14, 2022 /PRNewswire/ — A recent guide published by revealed that California homeowners pay surprisingly low home insurance rates compared to the rest of the country. logo (PRNewsfoto/

Average monthly premiums in California are $84 compared to $101 nationally. published additional statistics:

  • State population – 39,512,223
  • Average Home Price – $492,080
  • Homeownership Rate – 54.80%
  • Largest home insurance company – State Farm
  • Average annual rate $1,008
  • Annual Direct Bonuses Written – $8,365,295
  • Homeowners Insurance Losses – $56,835,067

Given the high cost of housing in California, this fact may seem shocking. However, other factors play a role. And in the end, California homeowners often end up paying more than average.

While this may seem contradictory, some analysis can make this fact easier to understand.

First, insurance rates are based on risk. While a more expensive home poses a higher risk for an insurer, the value of California’s buildings is comparable to national real estate values. In California, real estate values ​​drive house prices. It’s not uncommon for properties in desirable areas to sell for more than a million dollars.

Home insurance does not cover the value of the property. Instead, they cover the value of the house. The risk of the insurer does not fully reflect the purchase price.

Second, California homes face risks not covered by standard household insurance. While California homeowners pay less for traditional insurance, they often have to add other types of insurance.

Earthquakes are a real risk for California residents, but earthquake damage is not covered by standard household insurance. Many California homeowners are required to purchase separate earthquake insurance to cover the cost of damage caused by an earthquake.

Another additional policy that many California residents must purchase is flood insurance. Standard household insurance does not pay for flood damage caused by a weather event. So while they can cover damage from a burst pipe, they do not cover damage from a surge in flow.

Melanie Musson, a nationally recognized home insurance expert at, explains, “The benefit of slightly lower home insurance rates for California residents helps offset the additional cost of earthquake insurance and any additional coverage needed.”

In California, home insurance providers are required to offer earthquake insurance to their policyholders annually.

Read the full report here: California Home Insurance Guide 2022 (Companies + Rates)

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