Residential Insurance: Homeowners and Renters

(revised May 2021)

Reading: What does home insurance cover in california

index

intro

make the most of your insurance money

insurance purchase

deal with a broker-agent

discounts

what does homeowners insurance cover?

  • coverage to — dwelling
  • coverage b — other structures
  • coverage c: personal property
  • coverage d: loss of use
  • coverage e — personal liability
  • coverage f: medical payments to third parties
  • perils generally covered and not covered by a homeowners policy

    renters insurance

    condo insurance

    What limits should I set in my policy?

    broker disclosure

    Will my policy fully and completely replace my home if it is destroyed?

    problems getting insurance

    • California Fair Access to Insurance (Fair) Plan Requirements
    • national flood insurance program (nfip)
    • surplus lines market
    • online home insurance search tool
    • what are your rights?

      • cancellations and non-renewals
      • cousins
      • refunds
      • home protection contracts

        summary of key legislation

        • Senate Bill 64
        • Senate bill of 1855
        • assembly law 2199
        • Assembly Bill 2962
        • some final tips

          glossary of terms

          talk to us

          intro

          This guide was designed to give you a better understanding of what type of homeowners and renters insurance is best for you. In order to better protect your family, your home and your possessions, it is wise to take the initiative to fully understand your homeowners or renters insurance policy. Although it is difficult to predict future losses, you can minimize the impact on you and your family by taking the time to familiarize yourself with your policy and how it specifically addresses your needs in the event of a loss.

          When shopping for insurance, it’s important to remember to shop for insurance the same way you shop for any other consumer product. Take the initiative in buying and understanding your insurance policy. Be sure to compare prices, coverage and terms of policies, and complaint information. Also, research the coverage options that are available to you. don’t just rely on someone else’s word, including an insurance agent or broker, as to what is the “best coverage” for you. Find an agent or broker who is willing to spend time discussing your needs and how specific insurance coverage can best meet your needs. It’s always wise to compare policies on your own to help determine the best product for you.

          Always try to plan ahead when you need to buy insurance. Allow the appropriate amount of time to make an informed decision. never make important decisions on the spot without first doing your research. You should always be proactive in deciding what type of insurance to buy and how much you need.

          Throughout this document we have italicized industry terms and described them more fully in the glossary of terms on pages 28-31.

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          get the most of your insurance money

          Premiums charged for homeowners and renters insurance vary widely from company to company, so it’s worth taking the time and effort to shop around to get the best value for your insurance money.

          The cost of homeowners and renters insurance depends on several factors, including location, local fire protection, age and construction of the building, choice of deductibles, application of discounts, and scope and amount of insurance. insurance coverage you purchase. Under California law, each insurance company calculates its own rates, subject to approval by the California Department of Insurance (CDI). Since each company’s loss experience is different, the rates will also be different. It’s a good idea to review and compare all quotes when shopping to determine if coverage, deductibles, and limits are similar to each other. make a list of what is important to you and be sure to discuss it with the agent. To help find competitive rates, the CDI is pleased to offer online premium comparisons covering more than 90% of the California homeowners and renters insurance market. You can get these comparisons through the cdi website at www.insurance.ca.gov, or by calling the cdi hotline at 1-800-927-help.

          buy insurance

          Insurance companies compete for your business on the basis of price, quality, and service, and use a variety of marketing methods, such as telephone, mail, television advertising, websites, agents, or sales offices, to let you know their products. Many insurers use independent agents to sell their products. An independent agent may represent one or more licensed insurance companies, and when you deal with an independent agent, you are actually dealing directly with the company. The insurer pays the agent a commission for the services he provides. Other insurance companies are direct writers using only their own employees or sales representatives and websites. you can deal with a direct writer by phone, internet, mail or a visit to their sales office.

          many companies have their own methods of premium rates or payment plans, so ask for details about the premium rates or payments available through the company you are considering for coverage.

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          deal with a broker-agent

          An insurance broker is an independent intermediary who searches the market for a suitable policy in the interest of clients and is not an employee of an insurance company. the broker represents you, the client.

          A broker-agent acting in a broker capacity may charge you a broker fee for the services you receive. To charge a broker fee, a broker must meet the following requirements:

          • the consumer agrees to the fee in advance, after full disclosure.
          • there is no fee for filing a fair plan.
          • The broker is not a designated agent of the insurer with which the coverage is or will be placed.
          • The broker provides the consumer with a specific disclosure form.
          • The consumer and the broker sign a broker fee agreement that contains certain standard information.
          • broker has a current broker’s bond on file with the department.
          • The broker discloses the existence of the broker fee at the time of the initial premium quote.
          • Your producer must provide a copy of the current Department of Insurance “Residential Insurance” brochure when purchasing residential coverage.

            discounts

            Companies sometimes offer discounts on burglar alarms and fire protection devices, such as smoke detectors, alarms and sprinklers. ask about discounts available through the companies you’re considering.

            what does homeowners insurance cover?

            The homeowners policy contains two sections. section i provides property coverages (a, b, c and d) while section ii provides liability coverages (e and f). Below is a brief description of the individual coverages:

            • coverage to — home
            • coverage b — other structures
            • coverage c: personal property
            • coverage d: loss of use
            • coverage e — personal liability
            • coverage f: medical payments to third parties
            • coverage to — housing

              coverage a provides important property coverage that protects your home and attached structures if they are damaged by a covered peril.

              cover b — other structures

              This coverage provides protection for other structures on the premises of the residence that are not attached to the home. covered items include detached garages, tool sheds, etc. coverage b is normally limited to 10% of the coverage limit a. however, you can purchase more coverage for an additional premium.

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              coverage c – personal property

              This coverage provides protection for the contents of your home and other personal belongings owned by you and other family members who live with you. coverage c is normally 50% of coverage a or is subject to a set amount agreed upon between you and the insurance company.

              Coverage is limited to certain types of property that are especially susceptible to loss, such as: •

              • jewelry
              • antiques
              • skins
              • collectibles
              • fine art
              • firearms
              • cutlery
              • money
              • Additional amounts of insurance may be purchased. you may want to consider programming these items separately. ask your agent for details.

                coverage d — loss of use

                This coverage will help you with additional living expenses if your home is damaged by a peril you are insured against to the point that you cannot live in your home. These expenses include, but are not limited to, lodging, meals, and warehouse storage. coverage d is typically limited to 20 percent of coverage a.

                In the event of loss, it is important that you keep receipts for all additional living expenses and submit them to your company for reimbursement.

                coverage e — personal liability

                This section of the homeowners policy will provide coverage in the event that you or a resident of your household is legally responsible for injuries to others. E coverage typically provides a defense and will pay damages, as the insurance company deems appropriate. there are some exceptions. liability coverage will not protect you in all situations, such as an intentional act. all exclusions and specific language can be found in your policy.

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                coverage f – medical payments to third parties

                This coverage pays reasonable medical expenses for people accidentally injured on your property. For example, if a neighbor’s child is injured while playing at your house, the medical payments portion of your homeowners policy may pay for necessary medical expenses. medical payments coverage does not apply to your injuries or injuries to people residing in your household. it is not a substitute for health insurance. business activities are also excluded. all exclusions and specific language can be found in your policy.

                perils generally covered and not covered by an owner’s policy

                generally covered by a homeowners policy if the damage is caused by:

                • fire or lighting
                • wind storm or hail
                • explosion
                • riot or civil commotion
                • planes
                • vehicles
                • smoke
                • vandalism & malicious pranks
                • theft
                • volcanic eruption
                • falling objects
                • weight of ice, snow, sleet
                • sudden & accidental water damage
                • glass break
                • Perils not generally covered by a homeowners policy if the damage is caused by:

                  • flood
                  • earthquake
                  • earth movement
                  • termites
                  • insects, rats or mice
                  • water damage caused by seepage or leaks
                  • losses per home vacant for 60 days or more
                  • mold
                  • wear or maintenance
                  • war
                  • insurrection
                  • tidal wave
                  • carelessness
                  • nuclear risk
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                    important: read the exclusions in your insurance contract.

                    earthquake, flood, mold, earth movement and “wear and tear” are some of the hazards that are generally excluded. When an insurer writes your homeowners coverage, the insurer is legally required to offer you earthquake coverage for an additional premium. Earthquake coverage can be underwritten directly by the homeowner’s insurer, by a separate insurer, or through the California Earthquake Authority (CEA).

                    You may choose to purchase specialized homeowners coverage that provides additional protection for your home and its contents beyond the standard coverage limitations of most homeowners policies. ask your insurance agent or broker about available endorsements to extend coverage. Coverage endorsements, such as building code updates, can greatly increase your protection in the event of a loss.

                    renters insurance

                    Apartment fire news often includes tragic stories of renters who lost everything because they didn’t have insurance. Your landlord does not provide insurance for your personal property. Having all your personal belongings destroyed in a fire or other insurable event, without coverage, is a tragedy that doesn’t have to happen.

                    To protect your belongings, you should consider purchasing renters insurance, also known as “renters insurance.” The renters policy can be used to provide coverage for your personal belongings located on the property you occupy. Coverage for loss of use, personal liability protection, and third-party medical payments is also provided.

                    See also: Ever Wondered How Insurance Agents in Singapore Make Money from Your Policies? – MoneySmart.sg

                    Coverage generally provided under a renters policy:

                    • coverage c – personal property – an amount, designated by the insured, subject to a minimum determined by their insurance company
                    • coverage d – loss of use – 20% of coverage c
                    • coverage e – personal liability – generally subject to $100,000 minimum
                    • coverage f – medical payments to others – generally subject to $1,000 minimum
                    • condo insurance

                      Like renters insurance, condo unit owners insurance provides coverage for personal property, loss of use, personal liability, and third-party medical payments. however, it also includes coverage for damage to the interior of the unit and improvements for which the owner of the unit is responsible for maintaining in accordance with the rules that govern the condominium association. coverage for loss of use is generally limited to 40 percent of the personal property limit.

                      loss assessment can be an important coverage to consider, because it covers you for certain assessments that the condominium association makes as a result of a loss. however, you should check to see if it covers earthquakes and how much coverage it will give you in the event of an earthquake loss.

                      The homeowners association generally purchases insurance for the structure of the building and common areas, such as hallways and walls. You should carefully review the type of insurance your association has and how it would affect you in the event of a loss.

                      what limits should I set in my policy?

                      The “housing” limit should be the amount it would cost to replace your home. This may have nothing to do with the purchase price or current market value of your home, as homeowners insurance typically doesn’t cover the value of the land your home sits on. therefore, when determining the appropriate amount of coverage to purchase, you should consider the cost of labor and materials needed to rebuild the home, not fluctuations in the housing market.

                      Insurance companies have formulas they use to assess the replacement cost of your home. Since the formulas developed are unique to each company, different insurers may suggest or require different coverage limits for your dwelling limit. If the insurer or broker communicates a replacement cost estimate to an applicant or insured in connection with an application for or renewal of a homeowners insurance policy that provides coverage on a replacement cost basis, it must be provide a copy of this estimate to the insured or applicant who agrees to purchase coverage.

                      The following information can help you determine if your company’s stated or suggested limit accurately reflects the price it would cost to rebuild your home in the event of a total loss:

                      • Contact your agent or broker for assistance in assessing your home limit. To prevent a “he said, she said” situation from arising in the future, you should document your conversations and consultations in writing.
                      • Review your housing limit initially and after renewal. Discuss any modifications to your home, in writing, with your agent, broker, or insurer that may cause the replacement cost of your dwelling limit to increase or decrease.
                      • know the replacement cost of your home. Familiarize yourself with the building materials that make up your home, including the type of construction and any special features.
                      • Stay informed about current construction costs in your area. Contact your local general contractors and ask what the current price per square foot is for a house similar to yours.
                      • Keep accurate records of updates, renovations, and improvements to your home. save receipts and samples of materials used where possible and contact your insurance agent or broker to increase the dwelling limit where appropriate.
                      • Contact your agent, broker, or insurance company to request a full home inspection if you think your policy limits may be inadequate.
                      • If you believe your home limit is undervalued or overvalued, and you have submitted written documentation to your agent, broker, or insurer to raise or lower the limits and your application is denied, contact the CDI for assistance using the information in the “talk to us” section of this brochure.

                        The “contents” limit is generally around 50% of the amount of the home; however, this is only a guide, as you are the most reliable source of information on the replacement value of your personal belongings. be sure to account for all of your personal property when calculating content limits. read and understand the limited coverage amounts for specific types of personal property such as:

                        • jewelry
                        • firearms
                        • fine art
                        • computer hardware and software
                        • cutlery
                        • business personal property
                        • antiques
                        • money
                        • collectibles
                        • Limited coverage amounts for specific types of personal property are not separate limits in addition to the contents limit. These limits are included in the general contents limit and represent the maximum paid for that specific type of personal property. therefore, it is very important to add an endorsement (sometimes called a “rider” or “float”) to coverage that you specifically schedule and takes into account the value of any personal property you may own. above special limits. Contact your agent or broker to discuss how to properly cover any personal property that is valuable, over the limits, or otherwise out of the ordinary.

                          Also, be sure to account for common household items when calculating your content limit. People often only care about the expensive items they buy to use in their homes and forget to take into account all the things you need to run your home and enjoy your home like small appliances, kitchen utensils, clothing bedding, curtains and sundries. . Remember, personal property also includes clothing, shoes, accessories, and personal items.

                          Two major problems experienced by homeowners with their home/residential property insurance policies after the previous California wildfires were:

                          1. many of the houses were not insured, that is, insured for amounts inadequate for reconstruction. insurers sometimes refer to this as an improper insurance-to-value ratio.
                          2. The problem of rising construction cost was evident in many situations. When rebuilding, homeowners must meet new building code requirements. in some cases, the difference between the housing limit and the code updates was a significant amount. in addition, the extreme heat of some fires (and some new building code requirements) required the construction of new foundations and the removal of debris from damaged foundations. this is a situation that can be easily overlooked when determining construction limits.
                          3. An important part of owning any property is protecting the property to the best of your ability. Homeowners insurance is a vital component in protecting your property. Knowing and understanding your policy coverage and limits, and making sure your values ​​are up-to-date, goes a long way toward giving you and your family peace of mind in any loss situation.

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                            broker disclosure

                            • Do not sign any brokerage fee agreement unless you have filled in all lines and blanks and have carefully read this entire document and agreement.
                            • If your broker is placing auto coverage, your broker must provide you with a copy of the current auto insurance booklet from the department of insurance. If your broker is placing residential coverage, your broker must provide you with a copy of the Department of Insurance’s current residential insurance booklet. By signing this disclosure, you acknowledge receipt of the applicable brochures.
                            • client initials: ______

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                              will my policy totally and completely replace my house if it is destroyed?

                              This depends on whether your policy is a replacement cost value policy or an actual cash value policy. if your policy is an actual cash value policy, it will not be.

                              Actual cash value recovery is determined as follows:

                              (1) in the event of a total loss of the structure, the policy limit or the fair market value of the structure, whichever is less, or (2) in the event of a partial loss of the structure, the amount what it would cost the insured to repair, rebuild, or replace less a fair and reasonable deduction for physical depreciation, or the policy limit, whichever is less.

                              If you have a replacement cost policy, the chances are better that you can completely rebuild your home; however, there are many types of replacement cost policies, so be careful to purchase a replacement cost policy that best suits your needs. A policy cannot be sold as a “guaranteed replacement cost” policy unless it pays to completely rebuild the home, regardless of the coverage limit. Other types of replacement cost policies will pay your policy limits, plus a certain percentage above those limits. some policies do not have building code (ordinance or law) update coverage. cities and counties periodically change their building codes. Unless your policy has this coverage, your insurance company may not pay for the changes you need to make to your home’s structure to bring it up to current building codes.

                              As mentioned above, your agent, broker, or insurer can help you set a limit that is appropriate for rebuilding your home. it is important to update that limit periodically to maintain a limit that reflects current construction costs. You may want to ask your agent, broker, or insurer if they automatically review or increase limits on a regular basis, or if they offer an automatic inflation protection option that increases limits based on current inflation rates.

                              In short, there is no substitute for carefully reading your policy and its renewal declarations. Whenever you are unsure about your policy, you should contact your agent, broker or company for written clarification. Finding out after a loss that you didn’t have adequate coverage is not a situation you want to experience.

                              For more detailed information on residential claims, see the CDI Residential Property Claims Guide. This brochure helps you navigate the claims process and discusses hot topics like water damage, mold, and replacement cost.

                              Remember, if you only shop by comparing prices and not comparing coverage, you’re doing yourself a disservice. Your home is one of the most important purchases you will make. take the time to get the facts straight before you buy homeowners insurance. it can be one of the best decisions you make for you and your family.

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                              problems getting insurance

                              If you can’t find an insurance company that will sell you a homeowners or renters policy because you don’t meet the eligibility requirements, or if you can’t find certain coverage, like fire or flood insurance, there are special insurance programs you should consider. include:

                              california’s fair access to insurance (fair) plan requirements

                              the fair plan is an association of all property insurers licensed to do business in california. is designed to make property insurance more available to people who have difficulty obtaining it from private insurers because their property is considered “high risk.”

                              the fair plan offers a standard fire insurance policy for both the structure and the contents. This is a basic property policy that has coverage limitations. Liability coverage and coverage for other perils such as theft are not provided. Please read the policy carefully for a detailed description of coverages. A “difference in condition” policy or other supplemental coverage offered by private insurers should also be considered when purchasing a fair plan policy. be sure to discuss these coverages with your agent or broker.

                              Detailed information is available in the California Fair Plan. you can contact:

                              California fair plan

                              3435 wilshire boulevard

                              los angeles, ca 90010

                              (800) 339-4099 or (213) 487-0111

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                              national flood insurance program (nfip)

                              Insurance coverage for losses resulting from flooding is generally not provided in a homeowners or renters policy. In 1968, Congress created the National Flood Insurance Program (NFIP) in response to the rising cost of taxpayer-funded disaster aid for flood victims and the ever-increasing amount of damage from floods.

                              This program allows homeowners and renters to purchase insurance that will protect their residences and contents against direct physical loss from flooding, loss resulting from flood-related erosion, and damage from landslides. The National Flood Insurance Program (NFIP), administered by FEMA, makes federally-backed flood insurance available to communities that adopt and enforce floodplain management ordinances to reduce future flood losses.

                              The maximum coverage amounts for a single-family home are $250,000 for the structure and $100,000 for its contents. renters can also purchase up to $100,000 of coverage for their personal belongings.

                              For information on flood insurance, homeowners or renters should contact their insurance agent, call the nfip referral center toll-free at 1-888-379-9531, or visit the nfip website, floodsmart .gov.

                              surplus lines market

                              If you’re having trouble finding the coverages you want, you can try getting coverage on the “surplus lines” market. ask your agent or broker if you can get coverage with a surplus lines insurer or get coverage through a surplus lines broker (note that surplus lines insurers are not endorsed by the california insurance guaranty association) .

                              online home insurance search tool

                              The Department of Insurance has created several online tools at insurance.ca.gov to help you explore the market. our home insurance search tool can help you identify those insurers writing in high-risk regions to help you narrow down your search.

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                              what are your rights?

                              cancellations and non-renewals

                              After a residential policy has been in force for sixty days, the insurance company may only cancel a policy for reasons specified by law, including; non-payment of premium, fraud, material misrepresentation or physical changes in insured property that increase any peril against which you are insured.

                              The company must mail or deliver a notice of cancellation to your last known address at least 20 days before the effective date of the cancellation, and 10 days for nonpayment of premium or fraud. however, it is important to know that companies can sometimes provide more generous cancellation notice periods in their policies. if the policy provides a cancellation notice period of more than 20 days, the policy language will apply.

                              Written notice of non-renewal must be sent to you at least 75 days prior to the expiration date. If the company fails to give you proper notice as required by law, your existing policy, without changes to its terms and conditions, will remain in effect for 75 days from the date the notice is sent.

                              Both cancellation and non-renewal notices must contain the reason for the cancellation for non-renewal.

                              premiums

                              The insurer has sixty days from the effective date of the policy to verify the qualification and subscription of a new policy. Within these sixty days, a company must notify you of any errors and the resulting change in premiums. after sixty days, no premium change notice will be effective.

                              If the premium revision results from an error made by the company or its agents, or from incomplete information provided by you, the insurance company is required to notify you of the error within sixty days and the higher premium will be charged from the effective date of coverage. If you do not accept the premium increase, you can ask the company to cancel the policy. the premium earned must be calculated in proportion to the original quote.

                              If the premium revision results from an error made by the company or its agents and you are not notified of the error within sixty days, the policy will remain in force as written on the original premium.

                              After the sixty-day period has expired, the insurance company may cancel the contract for misinformation and/or misstatement or other matters serious enough to warrant a full cancellation.

                              refunds

                              Generally, each time the policyholder initiates a cancellation, the premium is calculated on a short rate basis, so the company retains part of the unearned premium to cover administrative costs. however, some companies may calculate the premium on a prorated basis. You should review your policy contract for the company’s cancellation provisions.

                              In addition, if you purchased the services of a broker and entered into an agreement, the broker may be entitled to retain the broker’s fee. You may be entitled to a full refund of the broker’s fee if the broker acted incompetently or dishonestly. unresolved disputes over unreimbursed broker fees may be submitted to the cdi for review.

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                              home protection contracts

                              See also: Best Car Insurance in Virginia for 2022 | Bankrate

                              Home protection contracts (commonly called home warranties) protect homeowners from repair costs not covered by homeowners insurance. Home protection contracts cover things like plumbing, heating, electricity, and major appliances. structural items are generally not covered.

                              Home protection contracts will generally cover malfunctions of major appliances such as washers, dryers, ovens, and refrigerators. in some cases, or for additional charges, the warranty may extend to air conditioning units, garbage disposals, doorbells, ceiling fans, garage door openers, water softeners, garbage compactors, and built-in microwave ovens.

                              It is important to note that a home protection contract is not an insurance policy. however, for the protection of consumers, home protection companies are regulated by the cdi and must be licensed by our department. These contracts, sometimes described as service contracts, are typically for one year and cover the repair or replacement of major systems and appliances that break due to normal wear and tear. home protection contracts do not overlap with or replace a homeowners insurance policy. For example, if your water heater bursts and destroys a wall in your home, the warranty would repair the water heater and your insurance would pay to repair the wall and any damage to the floor.

                              Usually, the age of your home doesn’t matter when it comes to home protection coverage. You can get a contract as long as the covered items are in good working order at the start of the contract. home protection contracts typically cost about $350 to $400 a year, plus $35 to $50 per service call. If your home’s plumbing, heating, and electrical systems and major appliances are new or recently upgraded, the expense may not be necessary. On the other hand, when you need to pay for repairs on an older home, costs can add up quickly.

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                              summaries of key legislation

                              the 2003 firestorms in southern california resulted in legislation providing additional protections to homeowners. include:

                              • Senate Bill 64 (2003) in the event of a declared state of emergency, allows homeowners and insurers to mediate disputed homeowners insurance claims volunteer through the cdi.
                              • The cost of mediation will be borne by the insurer up to a maximum of $1,500.

                                • Senate Bill 1855 (2004) this bill requires insurers to add an additional disclosure to the california residential property insurance disclosure and declarations page a homeowners policy stating that the cost to rebuild your home may be different from the limits of your homeowners policy. also changes the use of the words “extended replacement cost coverage” in the california residential property insurance disclosure to “limited replacement cost coverage”. this is designed to provide better disclosure to homeowners about their policy limits and the potential for underinsurance.
                                • This law requires insurers to distribute a new California residential property insurance bill of rights to consumers every two years that outlines the rights and responsibilities of consumers and insurers. This brochure is also available upon request to the cdi.

                                  • Assembly Bill 2199 (2004) establishes a minimum period of 12 months in non-catastrophic situations (with additional 6-month extensions if the policyholder can demonstrate a good cause for needing more time), and a 24-month declared “state of emergency” period for homeowners to repair, rebuild, or replace their home after a loss, beginning with payment of actual cash value. plus, it allows homeowners the flexibility to rebuild or replace at a location other than where the original loss occurred in the event of a total loss.
                                    • assembly law 2962 (2004) in case of total loss of the structure:
                                    • requires insurers to consult with homeowners at the time of their policy renewal (if reconstruction of the insured structure has not been completed) and adjust the policy, limits, coverages, endorsements, or premium to reflect the change in risk exposure.

                                      This law prohibits insurers from canceling a policy between renewal periods while a home is being rebuilt, except in cases of fraud and misrepresentation. it also prohibits insurers from using the fact that the insured main structure is damaged as a result of total loss as the sole basis for canceling a policy.

                                      requires insurers to renew a homeowners policy at least once if the total loss was caused by a declared disaster and the loss was not due to the insured’s negligence.

                                      some final tips

                                      • Take the time to compare homeowners insurance prices. compare prices, service and coverage. cdi premium surveys can help with premium comparison. you can call the cdi hotline for more information and discussion.
                                      • Provide complete and accurate information to your agent or broker when requesting a premium quote or completing an insurance application.
                                      • verify the status of the broker’s or agent’s license; always make sure they have a valid license. You can check a licensee’s status on our website at www.insurance.ca.gov or by calling our toll-free number.
                                      • read all applications or financial agreements before signing. Make sure the application and/or folder reflects limits and deductibles, coverage purchased, name of insurance company, effective and expiration dates, and covered residential property. never sign a blank form or something you don’t understand. obtain and keep a copy of all signed documents in a safe with all your other vital records.
                                      • If you can afford to take a little more risk, a higher deductible can significantly lower your premium.
                                      • never pay cash. all checks should be made payable to the insurance company or agency, not personally to the broker or agent.
                                      • read your policy when you receive it. do not submit without verifying that coverage, limits, premium and other information are correct. Also, read the policy carefully to identify your rights and obligations and the company’s rights and obligations under the terms of the policy.
                                      • Ask the broker or agent to explain any phrases you think are ambiguous.

                                        • Keep an inventory of your personal property, listing all the items you own, the dates purchased, and the price. If possible, take photos of important and valuable items. you may want to video your home and possessions as well. Keep these records in a safe place away from home, preferably in a safe deposit box. Also, periodically update your inventory, appraisals, photographs, and videotapes. this will help you file and resolve a claim quickly and efficiently.
                                        • A Home Inventory Guide is available to all CDI consumers by calling 800-927-4357 or downloading it from our website.
                                        • the california department of forestry and fire protection (cal fire) is an emergency response and resource protection agency that provides educational materials and helpful tools to help protect your home and reduce the economic damage from fire. cal fire provides the homeowners checklist, a helpful fire safety tool to use inside and outside your home. the homeowner checklist can be found on their website at: www.fire.ca.gov.
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                                          glossary of terms

                                          Actual Cash Value (ACV): The measure of actual cash value recovery will be determined as follows: (1) In the event of a total loss of the structure, the limit of the policy or fair market value of the structure, whichever is less, or (2) in the event of partial loss of the structure or loss of its contents, the amount it would cost the insured to repair, rebuild, or replace the lost thing or injured less a fair and reasonable deduction for physical depreciation, as specified, based on its condition at the time of injury or the policy limit, whichever is less.

                                          agent: A person or organization licensed to sell and maintain insurance policies for an insurance company.

                                          ambiguous: unclear or uncertain terms or words; being open to more than one interpretation.

                                          application: a written application for insurance coverage containing statements made by the applicant.

                                          binder: A short-term agreement that provides temporary insurance coverage until the policy can be issued or delivered.

                                          broker: A licensed person or organization that transacts insurance on your behalf.

                                          broker-agent: A licensed person who may act as an agent representing one or more insurance companies and also as a broker dealing with one or more insurance companies representing your interests.

                                          broker commission: An amount of money charged by a broker to obtain insurance for an insured. this fee is usually earned and is generally non-refundable. must be disclosed and agreed to by the insured. this fee is not part of the insurance premium. it is a contractual agreement between the broker and the client.

                                          commission: the portion of the premium paid to the agent by the insurer as compensation for their services.

                                          declarations: usually the first page of an insurance policy that contains the full legal name of your insurance company, its name and address, the policy number, the effective and expiration dates , the premium payable, insurance limits, property covered, deductibles, and any applicable information about the lienholder.

                                          deductible: The amount of loss that the policyholder is responsible for paying in advance before covered benefits are paid from the insurance company.

                                          depreciation : a decrease in value due to age, wear, or obsolescence.

                                          earned premium: the portion of a policy premium payment for which policy protection has been provided.

                                          endorsement : a written agreement that changes the terms of an insurance policy by adding or removing coverage.

                                          exclusion : A contractual provision in an insurance policy that denies or restricts coverage for certain perils, persons, property, or locations.

                                          fixed cancellation: a policy canceled as of its effective date. generally under a flat cancellation no premium is charged.

                                          fraud: dishonest and deliberate act of obtaining money or value under false pretenses.

                                          Danger: Circumstances that increase the likelihood or severity of a potential loss.

                                          insured: the policyholder who is entitled to covered benefits in the event of an accident or loss.

                                          Insurer: The insurance company that issues the insurance policy and agrees to pay for losses and provide covered benefits.

                                          material misrepresentation: a false statement by an applicant of any material fact that if the insurance company had known the truth, it would not have insured the risk.

                                          non-renewal: the insurance company’s option not to renew a policy at the end of the policy period.

                                          premium: the insurance price paid to the insurance company for a policy.

                                          producer: A term used by the insurance industry to encompass agents and brokers.

                                          quote: An estimate of the cost of insurance based on information provided to the agent, broker, or insurance company.

                                          replacement cost: the amount it costs to replace the lost or damaged property with a new property of the same type and quality on the local market.

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                                          talk to the insurance department

                                          We are the state agency that regulates the insurance industry. we also work to protect the rights of insurance consumers.

                                          contact the california department of insurance (cdi):

                                          • if you believe an insurance agent, broker, or company has treated you unfairly.
                                          • if you have questions or concerns about health insurance.
                                          • if you want to order cdi brochures.
                                          • if you wish to file a request for assistance against your agent, broker or insurance company.
                                          • if you are having difficulty opening or settling a claim with your insurance company.
                                          • to verify the license of an insurance agent, broker, or company.
                                          • Reading: What does home insurance cover in california

                                            call:

                                            Direct line for consumers 1-800-927-4357

                                            phone 1-800-482-4833

                                            8:00 am to 5:00 pm, Monday through Friday, except holidays

                                            Reading: What does home insurance cover in california

                                            write:

                                            california department of insurance

                                            300 south spring st., south tower, los angeles, ca 90013

                                            Reading: What does home insurance cover in california

                                            Visit us in person:

                                            300 south spring st., south tower, ninth floor, los angeles, ca 90013

                                            8:00 am to 5:00 pm, Monday through Friday, except holidays

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                                            See also: When to Skip Insurance and Pay for a Car Accident Privately

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