Owning a home is a goal for many Californians. Whether you’re in northern California, San Francisco, Los Angeles or San Diego, people want a safe, secure place that feels like home. Having that peace of mind means having the appropriate protection for your home.
And California homeowners should be aware of the potential threats to protect against when considering the appropriate insurance policy. Those threats may include water backup damage, theft, natural disasters and others.
Common insurance coverage threats to California homeowners
Homeowners deal with unique hurdles in every state. Here are some of the challenges California homeowners face when seeking insurance:
- Wildfires – Wildfires are growing in size and severity. And California is by far the state with the most homes at-risk due to to wildfire.[1] As the risk of wildfires damaging or destroying homes increases, homeowners should stay informed about the risks and seek the appropriate coverage for their particular needs. Here are some wildfire safety and readiness tips to help protect your home.
- Changing Regulations and Price Volatility – Learn about this here: California homeowners insurance: Current state of the market and implications of the Los Angeles wildfires
- Cost of replacement – The cost of raw materials and labor needed to rebuild and repair homes is rising. Insurance policies that were sufficient in years past are struggling to keep up with this cost, leading to higher insurance premiums. [2]
What factors go into determining a homeowners insurance rate?
While the average cost of homeowners insurance varies based on a number of components, these are common factors that insurance companies use to assess risk and determine your rate:
Location
Location includes the state, city, and demonstrable risk of loss in the area.
Age of construction of the house
How new or old the house is, and the upgrades that were made to an older home.
Replacement cost
The replacement cost is the cost of fully rebuilding the same house.
Swimming pool
Owning a swimming pool may cause you to choose to increase your liability coverage to cover possible injuries.
Coverage
The type of coverage you choose and how much personal property and liability protection you want your home insurance policy to cover.
Coverage options that may meet the needs of California homeowners
Whether you own a Spanish-style home in Fresno, a two-story in a Sacramento cul-de-sac or a ranch-style home in the San Jose suburbs, there are specific coverage options for you and your family (not an exclusive list).
- Extended Replacement Cost coverage.
- Water backup can help protect you from losses caused by backed-up sewer or drain water.
- Identity theft protection helps defend you against fraud and identity theft and can stop damages to your credit within minutes.
- Equipment breakdown coverage may help pay to repair or replace broken down machinery, appliances and systems.
- Service line coverage may offer protection for gas, water and electrical lines that run to your home from underground.
- Earthquake coverage, available through the California Earthquake Association, may help pay the costs of damage incurred by your home during earthquakes.
Sources:
[1] “2025 U.S. wildfire statistics,” Natalie Todoroff, bankrate.com/insurance/homeowners-insurance/wildfire-statistics/ (accessed June 2025).
[2] “What the California Wildfires Mean for Insurers and Homeowners,” Shankar Parameshwaran, knowledge.wharton.upenn.edu/article/what-the-california-wildfires-mean-for-insurers-and-homeowners/ (accessed June 2025).
The information included here is designed for informational purposes only. It is not legal, tax, financial or any other sort of advice, nor is it a substitute for such advice. The information may not apply to your specific situation. We have tried to make sure the information is accurate, but it could be outdated or even inaccurate in parts. It is the reader’s responsibility to comply with any applicable local, state or federal regulations. Nationwide Mutual Insurance Company, its affiliates and their employees make no warranties about the information nor guarantee of results, and they assume no liability in connection with the information provided.
Insurance terms, definitions and explanations are intended for informational purposes only and do not in any way replace or modify the definitions and information contained in individual insurance contracts, policies or declaration pages, which control coverage determinations. Such terms may vary by state, and exclusions may apply.