Homeowners insurance

I'm Javier Calvo. I run Calvo Insurance Agency, a Farmers agency in Murrieta, and homeowners policies are a big part of what my office does. This page is the version of the conversation I have across my desk every week: what a policy covers, what it skips, why the price is what it is, and what to do when something goes wrong.

What is homeowners insurance?

It's a policy that pays to repair or rebuild your house, replace your belongings and cover you if someone gets hurt on your property or you damage someone else's. Your lender usually requires it. Even with the mortgage paid off, I'd never go without it, because a single kitchen fire can cost more than years of premiums.

What does a homeowners policy cover?

A standard policy is split into lettered sections. Once you know them, the declarations page you get every year starts to make sense.

• Coverage A pays to repair or rebuild the house itself, including attached structures like an attached garage.
• Coverage B is for other structures on the lot, such as a detached garage, a fence or a shed. It's often set at around 10% of Coverage A.
• Coverage C covers your belongings, at home or away from it.
• Coverage D, loss of use, pays for a hotel, meals and rent if a covered loss leaves the house unlivable during repairs.
• Coverage E is personal liability, for injuries to other people or damage to their property that you're responsible for.
• Coverage F pays small medical bills for guests hurt at your place, regardless of fault.

The covered causes of loss include fire, lightning, wind, hail, theft, vandalism and sudden water damage from a burst pipe or a failed water heater. How broadly those apply depends on the policy form.

What are the different types of homeowners policies?

You'll see policies called by form numbers. Here's what each one means in practice:

• HO-1 is a bare-bones named-perils policy. Almost nobody writes it anymore.
• HO-2 covers the house and your belongings against a longer list of named perils, like falling objects or water from plumbing.
• HO-3 is the one most people have. The house is covered for any cause not specifically excluded, and your belongings are covered for named perils.
• HO-5 covers both the house and your belongings for any cause not excluded. It costs more and makes sense if you own a lot of valuable things.
• HO-4 is renters insurance: your belongings and liability, no building.
• HO-6 is for condos and townhomes. The HOA's master policy covers the building, and HO-6 covers the inside of your unit and you.
• HO-8 is for older homes where rebuilding to the original standard would cost far more than the home is worth.

What isn't covered by homeowners insurance?

This is where people get surprised, so I spend more time on it than anything else.

• Flooding. Water coming in from outside, from a storm or an overflowing creek, needs a separate flood policy.
• Earthquakes. In California this needs its own policy too.
• Wear, tear and maintenance. A roof that wore out over 25 years or a slow leak you ignored for months won't be paid as a sudden loss.
• Expensive jewelry, art and collectibles beyond a fairly low built-in limit, especially for theft. You add those separately.
• A business you run out of the house. Inventory and customers visiting usually need their own coverage.

Roofs deserve a mention. Your roof is part of the house, so a storm or fire that damages it is covered. But some policies pay older roofs at depreciated value instead of full replacement. Ask how yours handles it before you need to know.

What's different about insuring a home in California?

Earthquake and flood are separate purchases

Earthquake coverage is sold on its own, most often through the California Earthquake Authority, with deductibles from 5% to 25% of the dwelling limit. Flood coverage comes from the National Flood Insurance Program or a private flood insurer. An NFIP policy usually has a 30-day wait before it takes effect, so it can't be bought the day before a storm. Water damage from inside the house, like a burst supply line, is a different thing and is normally covered by your homeowners policy.

Wildfire, non-renewals and the FAIR Plan

Since 2023, several large insurers have stopped writing or sharply limited new homeowners policies in California, and many owners in fire-prone areas have gotten non-renewal letters. It's rarely about anything the homeowner did. If Farmers can write your house, I'll tell you. If it can't, the California FAIR Plan gives you basic fire coverage, and a difference in conditions (DIC) policy can be added for the liability, theft and water damage the FAIR Plan leaves out. The foothill and wine country homes around Temecula are a good example of where this comes up.

California's Safer from Wildfires regulation also requires insurers to offer discounts for home hardening, things like a Class A roof, ember-resistant vents and a cleared zone right around the house. If you've done any of that, tell your agent.

What affects your homeowners insurance rate?

Insurers price the chance that they'll pay a claim on your house and how big that claim could be. The things that move the number most:

• Where the house is: wildfire exposure, distance to a fire station and hydrant, and local claim history.
• The roof's age and material, plus the age of the plumbing, wiring and water heater.
• How the house is built and how big it is, which drives what it would cost to rebuild.
• Your own claims history.
• The limits and deductible you choose. A higher deductible lowers the premium, but only pick one you could actually pay tomorrow.
• Extras like a pool, a trampoline or a dog with a bite history, which add liability risk.

How much homeowners coverage do you need?

Your dwelling limit should equal the cost to rebuild the house at today's construction prices. That isn't the market value, and it isn't what you paid. The land is part of the sale price and doesn't need to be insured. After a big wildfire, rebuilding costs in the area can jump because everyone is hiring the same contractors at once, which is why I like extended replacement cost when it's available. It adds a cushion, often a percentage above your dwelling limit.

For belongings, the question is whether you have replacement cost or actual cash value. Actual cash value pays what your stuff was worth after depreciation, so a five-year-old couch gets you a fraction of a new one. Replacement cost pays to buy new. The difference in premium is usually small compared to the difference at claim time.

Liability limits are the part people forget to revisit. If your net worth has grown since you bought the policy, your liability limit probably should too, and an umbrella policy is a cheap way to add more.

The gaps I find most often when I review a policy

• A dwelling limit that hasn't kept up with rebuild costs since the house was bought.
• No earthquake coverage, sometimes without the owner ever having decided against it.
• Personal property limits that wouldn't come close to replacing everything in the house.
• Liability limits nobody has looked at in ten years.
• Jewelry or other valuables that aren't scheduled, so they fall under a low theft limit.

I review existing policies for free. Bring your declarations page, and I'll compare it with a current rebuild estimate so you know where you stand. My post on the home insurance mistakes Murrieta homeowners overlook goes deeper on a few of these.

How do I choose the right homeowners policy?

Start with the rebuild cost, a rough inventory of what you own, and how much liability protection you'd want if someone sued you. Then decide on earthquake and flood on purpose instead of by default. When you compare quotes, go through the coverage line by line before you look at the price. Two policies can be $300 apart because one has extended replacement cost and a lower deductible, and the cheaper one only looks cheaper until you file a claim.

As a Farmers agent, I'm not going to pretend I'm shopping fifty companies for you. What I can do is tell you plainly what a Farmers policy would cover on your house, what it would cost, and where it falls short, so you can compare it fairly with anything else you're looking at.

How to file a homeowners insurance claim

1. Make the house safe and stop further damage. Shut off the water, tarp the roof, board a broken window. Keep the receipts, since reasonable temporary repairs are usually covered.
2. Take photos and video of everything before you clean up or throw anything out.
3. Report the claim to your insurer or call me, and write down the claim number.
4. Make a list of damaged items with what you paid and roughly when. Receipts, bank statements and old photos all help.
5. Keep a log of every call and email with the adjuster, including names and dates.
6. If you're out of the house, save hotel and meal receipts for your loss of use coverage.

Things people get wrong about homeowners insurance

The big one is assuming it covers everything. It doesn't cover flood or earthquake, and it doesn't pay for maintenance. The second is thinking the amount your lender asks for is the right amount. The lender is protecting the loan; your job is making sure the house could actually be rebuilt. The third is shopping on price alone. A low premium with actual cash value on your belongings and a high deductible can cost you far more the one time you need it.

Home and auto together

Putting your house and cars with the same carrier usually earns a multi-policy discount on both, and you get one office to call about either one. More on that on my home and auto insurance page.

Homeowners insurance help from our Murrieta office

I've been in insurance for more than ten years and spent over 25 in business and construction before that, so I tend to look at a house the way a builder does. Calvo Insurance Agency has been in Murrieta since 2017, and we write homes across the area, including Temecula, Menifee, Lake Elsinore, Hemet, Perris, Wildomar, San Jacinto, Canyon Lake and Winchester. Living near the water brings its own questions, which I cover on the Lake Elsinore and Canyon Lake pages.

Call me at (951) 383-3000, email jcalvo@farmersagent.com or come by 26690 Madison Ave, Ste 105, Murrieta, CA 92562. I'll go over your current policy in English or Spanish, and if it's already the right fit, I'll tell you that too.