Getting the Right California Insurance Coverage for Your Home

If you are are a homeowner or are planning to buy a home in California, you have undoubtedly thought about obtaining California homeowners insurance to protect you and your biggest investment. There are many different insurers and different types of coverage available. The following are several ways to approach insurance needs to make sure you get the right California insurance coverage for your home.

Understanding What You Want to Protect

The purpose of California homeowners insurance is to remove the financial risk associated with a highly valued asset that is susceptible to damage or loss. As someone that owns a home, you should know how much it would cost if the worst scenario took place and your home was completely destroyed by fire or some other disaster. What would it cost to rebuild and what would it cost to replace the contents of that home? Once you know that, you are in a position to know how much coverage you need.

Accidents Do Happen

In addition to protecting the physical structure and contents of your home, liability insurance is the other important component of California homeowners insurance. To protect your home and any other assets from being seized in the event someone is injured while on your property, you should always carry liability insurance. The amount you carry is a function of your net worth and the value of your estate that might be exposed in a law suit filed by an injured party. You should have enough liability insurance to cover the cost of a legal defense as well as any reasonable settlement that might be awarded to an injured party that sues or files a claim against you.

How to Obtain a California Insurance License

Because California has such a large population, licensed California insurance agents can make a great deal of money selling auto and home insurance to clients across the state. In order to get a license to sell California automobile insurance or California homeowners insurance, potential insurance agents must follow a series of steps. This is a brief rundown of the process.

  1. Fingerprinting
    All licensed California insurance agents must have their fingerprints on file with the state. This is accomplished by visiting one of the state’s approved live scan vendors and paying the appropriate fees.
  2. Education
    California homeowners insurance agents and California car insurance agents must complete 20 hours of accident and health pre-licensing study and 12 hours of study of ethics and the insurance code of the state of California.
  3. Online Application
    Only those who make an online application will be licensed to offer policies and charge California insurance rates. Make this application at the California Department of Insurance website. Appropriate licensed fees must be paid when the application is made.
  4. Pass the Insurance License Exam
    The California Insurance License Exam lets the licensing agency know that the applicant has the minimum amount of knowledge necessary to sell California car insurance and California home insurance properly.

These steps apply to anyone who wants to sell San Diego auto insurance, San Francisco homeowners insurance, Sacramento auto insurance, or auto and/or homeowners insurance in any other Californian city. Those who attempt to sell insurance without a license can be arrested and rendered ineligible to earn a license in the state or anywhere else in the country. Thus, the requirements should be followed with the utmost sincerity.

What Should I Look for When I am in the Market for California Homeowners Insurance?

When you are in the market for California homeowners insurance you should consider the premium you will have to pay, the level of service the insurance company can and will provide and how well claims are handled.

The Premium You Pay

The premium is the amount you pay for California home insurance. Usually, your mortgage company will pay the insurance company once per year from an escrow account that you fund monthly along with your principal, interest and tax payments. Premiums differ depending upon the amount of coverage you choose, the value of your house, the neighborhood you happen to live in and many other factors. Generally, new homes and homes in near-perfect condition and complying with all the latest building codes receive lower overall premiums than similarly sized homes that are old and not in such good condition. Premiums for California homeowners insurance are based on risk assessment just like any other type of insurance. The less risk your home presents, the lower the premium you will be charged to insure it.

The Level of Service You Receive

When you purchase California homeowners insurance it is best to go with an insurance company that is easily accessible if you have any questions or problems with your policy. Some insurance companies are very customer friendly while others are much more conservative in their approach to business. Some companies may nickel and dime you with fees to provide a report or have limited hours available for contacting them. On the other hand, some insurance companies give you 24 hour web access, toll free customer service and little or no waiting time to respond to your inquiries. The more customer friendly, the better your experience will be.

Handling of Claims

Simply stated, you want an insurance company that will handle all of your claims fairly and with minimal delay. There are many homeowners all across the country that find out too late that the insurance they thought they had will not pay off when they need it the most. If you doubt that statement, just ask some of the New Orleans homeowners who lost their homes during Hurricane Katrina.

Temporarily Lowering Insurance Costs

Lower Insurance CostsWhether you have California auto insurance, California homeowners insurance, or both, if you are thinking of taking action to temporarily lower your insurance costs, you better think twice. If you cut back on your coverage, you are adding to the risk and may expose yourself to higher out-of-pocket expenses in the event of an accident that results in bodily injury or property damage.

In today’s difficult economy, many people are struggling just to be able to pay their regular monthly bills. If you are thinking of raising your deductible or temporarily cancelling some optional insurance in order to save some money on your monthly premium, you could be making a bad decision.

Imagine what would happen if you cut back on your coverage on your automobile insurance and then got in a serious accident. Trying to save $100 or $200 per month can wind up costing you thousands of dollars because of inadequate coverage or high deductibles. Instead of cutting back on insurance, maybe it would be better to give up the premium TV subscription or cut back on some other non-essential expenses.

California homeowner insurance can protect you if your home is damaged by fire, wind, or other forces of nature. Depending on the type of coverage you have, you will be reimbursed for theft, vandalism or other types of contingencies that might occur on your property. Temporarily lowering your insurance costs can wind up costing you a lot of money. If a tree falls through your roof and you do not have coverage, it could cost you thousands to repair.

Why take a chance? If you have a house, you do not want to lose it because you were trying to save a few dollars. As hard as it may be to pay the extra premium amount, it is the responsible and right thing to do.

California Homeowners Insurance Requirements

Know Its RequirementsYour home is most likely your biggest and most valuable asset, and you should have California homeowners insurance to cover any physical damage to your home and any liability you may incur as the owner of that home.

If you have a mortgage on your house in the state of California, or for that matter, in any state, your lender will require you to purchase and maintain homeowners insurance on that home. Even if you have completely paid off the mortgage and own the house outright it is still very prudent to have a California homeowners insurance policy.

In order to qualify for a mortgage every lender will require you to have an insurance policy that will provide adequate protection against any damage or destruction to the property that they are financing. A California homeowners policy should cover all hazards as well as any liability that may occur on the property.

Mortgage companies differ in their requirements over the specific amounts of coverage you must carry, but, for the most part, they want you to carry replacement value and not actual cash value coverage. Replacement value protects the lender in the event that your home needs to be repaired or rebuilt due to a covered hazard. It pays the full cost and not the depreciated cost of the materials needed for repairs or reconstruction. Actual cash value only pays up to the limit of the policy which can be below the current market price for the materials and labor needed to actually restore the home to the same condition as it was in before the damage occurred.

Most homeowners policies in California also cover liability which protects you as the homeowner in the event someone gets injured on your property and sues. While this type of insurance is not mandatory, every homeowner that cares about protecting their house should carry personal liability coverage.

Liability Insurance — What You Don’t Know Can Cost You

Liability Insurance is A MustCalifornia law requires all drivers and vehicle owners to carry liability insurance, but it does not require you to have enough liability insurance to truly protect you in the event of a serious accident. The state mandated minimum coverage is just 15/30/5 which means $15,000 for bodily injury to a single individual, $30,000 for all individuals hurt in a single accident and $5,000 to cover any property damage you may have caused.

If you own a home, you probably have California homeowners insurance and a portion of your premium goes for liability coverage. Do you know how much liability coverage you have? Do you know how much liability coverage you need?

California Tort Law Holds You Personally Liable

Any claims beyond the limits of your insurance coverage may result in an attempt to claim the difference by the injured party. To protect yourself from being personally liable, you should carry enough liability insurance.

What is the Right Amount of Liability Insurance?

The right amount of liability insurance you should carry depends largely on your net worth and how averse you are to risk. If you have a million dollar house and other substantial assets, you would probably carry enough liability coverage so those assets are not put at risk in the event that you are found liable for injury or damage to another party.

What Happens if I Get Sued?

If you are involved in an automobile accident and found to be at fault, your insurance will protect you up to the limits of your policy. Your insurance company will also assist you in the event that the damaged party decides to sue you. Legal defense in any type of liability case can be very expensive. Insurance can cover those costs. Even if you are completely innocent, you may still need to hire an attorney and spend thousands in fees just to clear your name. No matter how careful you are, you should always carry adequate liability insurance – just in case.

The Differences Between Roofing Material and How it Relates to Insurance

Impacts Premium RatesDid you know that you might be paying a higher California homeowners insurance premium than your neighbor simply because of the type of materials used to construct your roof? Yes, it is true. California homeowner insurance companies may charge you higher overall premiums based on the materials that make up the composition of your roof.

The logic behind adjusting insurance premiums because of the type of roof you may have is based on two things. First, an insurance company may adjust their rates because your roof is made of materials that are more or less susceptible to damage or destruction from fire or other types of hazards. Second, they may adjust the premium you pay based on the expected life of your roof and the cost to repair or replace that roof.

Steel, tile and slate roofs are usually the strongest and safest types of roofing material. Not only do they hold up very well in all types of weather, but they are also very fire-resistant or fire proof. These types of roofs are more expensive to install that a typical tar and shingle roof, but, they also can last for 30 years or longer before needing repairs or replacement.

Now it may be impractical to tear up your old roof and replace it with one that will get you a lower California home insurance policy, but, if your roof is old and needs to be replace, you might consider an insurance-friendly replacement.

Check with your California homeowner insurance company to see if the offer discounts on certain types of roofs. While it may cost you more to initially buy the materials and have your roof installed, you will be adding value to your home. Also, if you plan to stay in that home, you will have a nicer roof to enjoy and at the same time add to the value of your home.