Residential Property Insurance Coverages in California
Key Points
- The valuation chosen for home property coverage is crucial for residential property insurance.
- Actual Cash Value (ACV) insurance costs less but also pays less based on the depreciated value of damaged property.
- Replacement Cost Value (RCV) insurance pays the cost to replace the property on the day of the covered loss and offers better protection.
- Homeowners insurance in California comes in five forms: Basic Form (HO-1), Broad Form (HO-2), Special Form (HO-3), Comprehensive Form (HO-5), and Modified Form (HO-8).
- Condo insurance (HO-6) covers interior features and personal possessions for condo owners, while the condo association master policy covers the exterior and common areas.
- Mobile home insurance (HO-7) protects factory-built homes and offers coverage for personal property, liability, loss of use, and trip collision.
- Landlords can purchase homeowner rental property insurance to protect their rental properties, with different forms available: Basic Dwelling Policy Form, Broad Dwelling Policy Form, and Special Dwelling Policy Form (DP-3).
- Renters insurance (HO-4) is recommended to protect personal belongings from perils like theft, vandalism, and fire.
Use the printable quote comparison worksheet to shop for coverage and to select the best quote (Homeowner / Renter).
CA Residential Insurance Coverages Overview
While the types of home insurance coverages in California differ based on the variations of ownership and occupancy, the most important factor of the home property coverage is the valuation you choose.
ACV vs RC in Home Insurance:
Actual Cash value insurance (ACV) typically costs less but also pays you less for the damaged property. ACV insurance claim accounts for the depreciated value of the damaged property based on its age, use, and other aging factors that lower its perceived value.
RCV insurance claim is based on the Replacement Cost value of the insured property. It pays however much it would cost you to replace the insured item on the day of the covered loss, up to the purchased policy limit. Home insurance policies that use RCV valuation typically cost a bit more than the ACV policy but offer much better protection.
Speak with a licensed California property insurance agent who can assess your home insurance needs and recommend the right amount of coverage to meet them.
HOMEOWNERS Insurance in California
There are over 7 million owner-occupied homes in California. In the state, single-family houses are the most prevalent types of dwelling units and can be covered under one of five types of policies. The five forms of California home owners insurance coverage that insurers offer to consumers are as follows:
Basic Form: Also known as** HO-1 Insurance Policy, **this policy covers losses or damage caused by ten common insured dangers, which include:
- Volcanic eruptions
- Crash from a vehicle
- Crash from an aircraft
- Smoke
- Explosions
- Theft
- Fire and lightning
- Hail and windstorms
- Vandalism
- Civil unrest
Finding the basic form policy in California may not be easy since most insurers do not offer it. Note that content coverage is not included in this policy.
Broad Form: Also known as** HO-2 Insurance Policy, **this policy provides extra risk protection for damages brought on by flying objects, electrical issues, home appliances, and snow/ice weight. The HO-2 insurance is a replacement cost policy which has more coverage than an actual cash value insurance policy, which pays the depreciated “actual” value. Thus, if your home is destroyed and you file a replacement cost value - RCV insurance claim, your insurer will cover the expense of rebuilding it. Insureds can get coverage for personal properties under this policy form.
Special Form: Also known as HO-3 Insurance Policy, this policy offers all-risk coverage for only the building. As such, it will pay up to the policy limit for a covered loss caused by any peril on the house unless the cause of the damage is specifically excluded by the insured. Other insurance protection available under the special form policy is additional living expenses, personal belongings, and personal liability. Even though the special form policy does not cover floods or earthquakes, a homeowner can add an endorsement for them or buy additional policies that do cover them.
Comprehensive Form: Also known as HO-5 Insurance Policy,** **this policy offers all-risk coverage for both the building and the damage to personal property of the insured. Policyholders can add additional coverage for personal liability, flood, earthquake coverage, and more under a separate cover.
Modified Form: Also known as **HO-8 Insurance Policy, **this home insurance form is for individuals who own historic structures or owner-occupied older buildings. Such structures, their contents, and liabilities are included under HO-8 insurance. However, the policy only covers specific hazards typical of the region in which the structure is situated.
CONDO Insurance in California
Also known as HO-6 Insurance Policy or Walls in insurance, California condo insurance provides financial protection for condo owners in the event of damages caused by named perils. Condo owners with one or more units in a big property complex need condo insurance to cover damages that can happen to their unit’s interior features and personal possessions. With active condo insurance, insureds can get additional living expenses when a named peril renders the condo uninhabitable for a brief period. Personal liability coverage is frequently included in a regular condo insurance policy if someone else files a claim or a lawsuit against you for property damage, personal harm, or both. Some mortgage lenders may need proof of condo insurance before approving the mortgage.
Note that a condo insurance policy differs from the condo association master policy. The master policy covers the exterior of your condo building and common areas that belong to your condo insurance association. If you purchase a condo unit in a property that maintains HO-6 insurance, you will be required to pay HOA membership fees. It is best to contact a knowledgeable insurance agent to help you find the best condo insurance that works in tandem with the master policy.
MOBILE HOME Insurance for California
There are more than 500,000 mobile homes in California. Owners of such factory-built homes need mobile home insurance, or HO-7 Insurance Policy, to repair or replace the physical building when it is damaged by a covered peril. The mobile homeowner can also include personal property coverage to protect their furniture, appliance, jewelry, or computer. However, only those specific hazards stated in the policy—which may include vandalism, theft, falling objects, fires, and hail—are insured for personal possessions. Additional coverage that may be available through mobile home insurance policy in California includes: personal liability coverage, loss of use coverage, and trip collision coverage (provides extra protection while transporting the mobile home to the installation site).
LANDLORD Insurance in California
With tenants occupying 45% of the entire housing units in California, landlords can ensure their investments are protected by purchasing homeowner rental property insurance, also known as landlords insurance policy. Landlord insurance in California protects the rental home and any personal items you keep on the property to help with maintenance or part of the rental unit. If someone is hurt on your property, your rental home insurance insurance will cover liability for their hospital costs or your legal expenses. Landlords insurance covers loss of rental income if your rental property is deemed uninhabitable due to covered damage. Your policy will pay you back the rent your renters would have been paying you while renovations are being made.
Most California P&C insurers offer three forms of home insurance for rented properties. The Basic Dwelling Policy Form provides coverage for a few risks and is often regarded as vacant home insurance since it is suited for older or unoccupied rental properties. The Broad Dwelling Policy Form covers more risks than basic dwelling policies, including the weight of ice or snow, falling debris, and water leaking from pipes. Lastly, the Special Dwelling Policy Form offers comprehensive coverage for all perils. A DP-3 is the most common type of dwelling insurance provided by several California insurance providers.
RENTERS Insurance in California
While renters in California may not have a physical building to insure, their personal belongings are at risk of common perils like theft, vandalism, civil unrest, and fire. Renters insurance (or **HO-4 Insurance Policy) **protects your personal belongings and also offers additional living expenses and liability coverage. Although California does not have a law requiring home renters insurance, some landlords may insist on it if you want to live in their property. Since your landlord's rental property insurance does not pay for damages to your personal belongings, it is typically a good decision to get renters insurance coverage. Without renters insurance the cost of replacing your possessions in the event of a wildfire, accident, or theft at the rental home will be your responsibility.
Insurance for California renters can be relatively affordable, especially for first-time renters. The cost of replacing or repairing personal possessions like computers, household appliances, and furniture can add up quickly and affect your finances. Meanwhile, you can buy a tenants insurance policy, which often costs between $15 and $30 monthly. This will give you peace of mind anytime your belongings get stolen, vandalized, or destroyed by unexpected or expected disasters.
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PRINTABLE WORKSHEETS
