Protecting Your Investment with California Home
Insurance
Though no one is required by law to have home insurance,
virtually every financial requires that California
borrowers purchase California home insurance. Mortgage
lenders must protect their investments in your house by
making sure you have a California home insurance policy
to cover any damage that occurs due to natural disaster.
Basic California home insurance policies cover fire and
smoke damage, wind and hail, lightning and explosions.
California home insurance basic policies also cover
damage or property loss due to vandalism or burglary.
Basic California home insurance policies do not,
however, cover floods or earthquakes. If you would like
to obtain coverage for these two disasters, you will
have to purchase two additional California home
insurance policies. California home insurance for
flooding is provided by insurance companies that are
affiliated with the National Flood Insurance Program.
California homeowners can purchase flood insurance
either through an affiliated private California home
insurance company, or they can purchase a standard
policy directly from the NFIP.
Flood insurance rates are set by the federal government,
so whether you purchase flood insurance through a
private California home insurance company or through the
NFIP, the premium will be the same for the same amount
of coverage. When you are searching for a California
home insurance to provide your flood insurance, you
should consider the average time it takes them to pay
claims and the quality of their customer service before
deciding on a California home insurance provider.
For California homeowners, earthquake insurance is
definitely a good idea to have. You can purchase
earthquake insurance through your regular California
home insurance company. Some lenders require that their
California resident borrowers purchase California home
insurance for earthquakes to ensure that their
investments are protected in the case of an earthquake.
Earthquake insurance covers the replacement and repair
of property damaged by an earthquake. California home
insurance companies cover damage to the structure of the
home itself in addition to expenses for temporary
housing while repairs are being made.
California home insurance reserve the right to charge
higher earthquake insurance premiums when a house is
very old, as it is more likely to be damaged by an
earthquake. Homes made of wood, on the other hand,
typically are charged lower premiums by California home
insurance companies because wood tends to better handle
the stresses of earthquakes than do brick homes.
California home insurance companies also consider the
location of a house when setting premium rates. For
instance, if a house lies within a few miles of a fault,
California home insurance premiums will be much higher
than they would if a house is located several hundred
miles away. Of course, it is much more important to
purchase California home insurance for earthquakes if
you live in an earthquake-prone area, so you will just
have to come to terms with the added cost of living in
that location.
When deciding on a California home insurance company
from which to purchase your earthquake insurance, be
sure to consider costs for a complete rebuilding of your
home from the ground up, in addition to the replacement
costs of all of your possessions. When dealing with
California home insurance earthquake coverage, you must
consider the worst-case scenario when deciding on how
much coverage you need.
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