Category: Insurance

Insurance can be very confusing. We’re here to help make it easy to understand, starting with three myths about home insurance and how you can really protect your home. 

We’re finding many homeowners are underinsured and would face a devastating financial blow if, for instance, their homes burned down. So, how do you know if you’re properly insured? Let’s start by examining some common misconceptions.

Understanding These Three Home Insurance Myths Could Save You Money

Myth #1 – Real Estate Value is the same as Insurance Value (aka Replacement Cost)

In many cases, the real estate value (market value) of your home may be comparable to the insurance replacement cost, but that isn’t always the case. Real estate value includes the home and the land value, whereas the insurance replacement value is generated by the total cost of removing rubble and rebuilding the property based on its current features, labor costs, materials, and supplies. 

So, if we look at an example of a beachfront property in San Diego, California we can see what a difference being insured for the correct replacement cost would make.  While the real estate value may be $5 million, the insurance replacement cost may only be $2 million. If we used that exact property but, for instance, if it were located inland in a less desirable area, the insurance replacement cost may be very similar to the market value or even more.   

Solution – To determine the appropriate insurance value, you’ll want to go through a detailed replacement cost estimator with your home insurance agent. We at CAInsuranceNow help clients generate an estimate for their replacement cost for their property, free of charge. We then give you expert advice on how to obtain the appropriate amount of coverage at a competitive premium.

Myth #2 – Home insurance covers all types of water damage to my home

This is an important myth to tackle because many homeowners are disappointed to learn their home insurance doesn’t protect them from certain natural disasters. 

Most standard home insurance policies in California cover perils such as fire, wind, hail, and water damage. However, water damage caused by a flood is normally not covered. Flood and water damage may sound similar, but when it comes to home insurance, they are quite different. 

Water damage occurs, for example, when a pipe breaks, the roof leaks, or there is an overflow of a bathtub or sink. Flood damage occurs when rising water comes into the home from tidal waves, river overflow, or excessive rain. If you have flood damage and do not have a separate flood insurance policy, you are not covered and you will bear the financial cost for damage and repairs.

Your home insurance agent should be able to help you get a flood coverage policy. Flood insurance premiums are generated primarily based on flood zones determined based on the floodplains, floodways, lowlands, and areas susceptible to flooding. Therefore, based on the flood coverage you elect and the flood zone your property is located in, premiums can vary significantly.    

We at CAInsuranceNow have access to the National Insurance Flood Program through FEMA and several private markets; contact us for a flood insurance quote.

Myth #3 – My jewelry is covered

When reviewing home insurance options with new clients, it’s quite common to hear that they assumed their jewelry was fully covered under their home insurance policy’s personal property limit (coverage C). However, almost all standard home insurance policy forms have special coverage limits for jewelry theft, damage, or loss. We’ve reviewed hundreds of home insurance policies and have found $1,500 to be a standard special limit of coverage (per item) for theft of jewelry. Therefore, in many events where, for example, only one item is stolen, the insured may not find coverage (or a reasonable amount to justify making a claim) on their policy. 

Solution – Add a jewelry rider or endorsement to your policy with a special deductible. This is often referred to in the home insurance industry as scheduling personal property. You can usually select a deductible as low as zero dollars and insure your valuable items at their appraised value, not just their purchase price. A licensed jewelry appraiser generates the appraised value and insurance companies usually request an updated appraisal no more than two years old.  It typically costs about $100 per item to be appraised. However, many of our clients go back to the jewelry store where they had purchased the jewelry item to get an updated appraisal at a discounted rate or sometimes for free. 

The additional premium for scheduling jewelry to your home insurance policy can vary. However, a good rule of thumb is to expect around $10 of additional annual premium for every $1000 of jewelry you want to be insured. If you need help scheduling your jewelry, we at CAInsuranceNow can help you with a quote. 

Home insurance doesn’t have to be confusing, we can help!

Understanding these three myths about home insurance can save you thousands of dollars should you need to file a homeowner’s insurance claim. Another often misunderstood type of insurance is life insurance. Read about why everyone should have life insurance.

It’s happening more frequently. You get a letter from your insurance carrier that your home is being non-renewed at the end of your term. Yikes!

What do you do if your home is non-renewed?

Many homeowners have never faced this situation before. You sign up for insurance, expect to be covered if you pay, and don’t file too many claims.

However, insurance companies in California and other states are pulling out of the home insurance business, leaving homeowners wondering what to do when their policies are non-renewed. At the time of this writing, another very large insurance company has started to non-renew homeowners in California.

Non-renewal means the company will no longer offer you insurance after your term expires. It differs from a cancellation, which refers to the insurance carrier canceling your policy for a specific reason, such as non-payment, a change in risk, fraud, or material misrepresentation.

If you’ve received a home non-renewal notice in California, it’s likely because the insurance carrier finds it not profitable to do business in the home insurance sector. So, the company has decided to non-renew its homeowners in that state.

In California, your insurer is required to let you know at least 75 days before your policy expires that it will non-renew your home.

Finding homeowners insurance in California can be tricky and will likely be more costly than in the past. With fewer companies offering coverage, building replacement costs increasing, more claims, and natural disasters, premiums are on the rise.

Where do you go for insurance if your home is non-renewed?

It’s not mandatory to have home insurance, but if your home is mortgaged, your lender will ask you to get insurance coverage. If you don’t get a home insurance policy, your lender will purchase a Force-Placed insurance policy to safeguard its asset – your home. However, Force-Placed policies cost more and provide less coverage for your personal belongings. These policies only aim to secure your creditor’s investment, and they aren’t the best option for you.

The good news is that we can help you get the best home insurance policy to protect you and your home.

If you’re looking for home insurance coverage in California, you’ll want to work with a brokerage like California Insurance Now. Unlike a “captive” agent who only has access to one insurance company, we have connections with multiple carriers. This means we can help you find the best coverage and rates to fit your specific needs.

Getting non-renewed is a good time to review and update your home insurance policy. In the last several years, we have seen on the news that many homeowners have discovered too late that they were underinsured.

What to look for in a home insurance policy.

Here are a few things to consider to protect your assets fully.

• Don’t underinsure your home and its contents. The cost of rebuilding has significantly increased in the last few years.
• Dwelling coverage limit: Make sure it matches local construction costs per square foot for similar homes of similar age and quality.
• Ensure that your home policy includes Extended Dwelling Replacement Cost Coverage. This rider is worth the extra money as it extends dwelling coverage typically by 10% to 50%. You can customize and increase your coverage with different add-on home insurance riders.

If you need insurance advice or a quote, contact us. We’d love to help.

California homeowners are grappling with an escalating insurance crisis as more homeowners receive non-renewal notices from their carriers. These letters, which inform homeowners that their insurance will not be renewed at the end of their policy term, are becoming increasingly common. The latest setback comes from State Farm, the state’s largest insurance provider, which has announced plans to potentially drop over a million policies in the next five years due to financial strain. Now, with options more limited than ever, understanding your alternatives is crucial.

In the last few years, insurers have either withdrawn from California or placed moratoriums on specific zip codes. Earlier this year, State Farm announced it would non-renew 30,000 policies across homeowners, rental dwellings, and other property types. In July, the company also stopped offering commercial apartment insurance, impacting around 42,000 policies statewide.

With State Farm currently insuring over 1.2 million residential and business properties, plus additional coverage for condo homeowners associations, this shift could leave countless Californians searching for new insurance options.

Navigating California’s Insurance Crisis

California is the fourth-largest insurance market in the world. Insurance carriers want to be in California’s marketplace, but they claim the profits were significantly affected by underpricing climate risk and the inability to raise premiums. In California, raising premiums on insurance must go through an approval process with the Department of Insurance.

With State Farm potentially dropping over a million policies in the coming years and other insurers exiting the market or restricting coverage in certain areas, finding affordable, reliable insurance is becoming increasingly difficult. This is particularly concerning for residents in wildfire-prone areas, where the risk of property loss is highest, and the availability of coverage is most limited. If you’re affected by these changes, staying informed and acting quickly to secure new coverage is essential.

The root of the issue lies in the rising costs associated with climate-related disasters and regulatory challenges that insurers face in California. With strict regulations on premium hikes, many companies argue they can no longer afford to cover the risks, leading them to either exit the market or significantly limit new policies. The state’s efforts to balance consumer protection with the realities of climate risk have created a problematic landscape for insurers and homeowners. As lawmakers consider reforms to streamline the rate approval process and incorporate more advanced catastrophe modeling to justify overall rate increases, it’s unclear how quickly these changes will come—and how much relief they will provide.

What Homeowners Need to Know About Non-Renewals

In this uncertain environment, our insurance agency is committed to guiding you through the process and finding the best coverage for your needs. We work with a variety of carriers that are still active in the California market, giving us the flexibility to explore multiple options for you. If you’re facing a non-renewal or are concerned about your policy, don’t wait until the last minute. Contact us today, and we’ll help you navigate these challenges with the goal of securing affordable, comprehensive coverage that meets your needs.

To get the best insurance quote, it’s ideal to be within 30 to 45 days of your policy’s non-renewal date. While you can choose to end your current homeowner’s policy before it expires, we don’t recommend it because rising insurance rates mean your new policy will likely be more expensive. We aim to have your new policy start as soon as your current one ends, ensuring a smooth and seamless transition.