Understanding Your California Homeowners Policy

Most California homeowners read their insurance policy for the first time when they file a claim. Reading it in advance — at minimum the water damage and mold sections — saves substantial money and stress.

The standard California policy

Most California homeowners hold an HO-3 policy or California-specific variant. The structure is: 'all peril' coverage for the dwelling, 'named peril' coverage for contents, specific exclusions, and various endorsements that add or remove coverage. The California Department of Insurance publishes consumer policy guides.

Section A: Dwelling coverage

Covers the physical structure of your home. Usually written at a value equal to replacement cost. This is what pays to rebuild after a covered event.

Section B: Other structures

Detached garages, sheds, fences. Typically 10 percent of dwelling coverage. Some California policies have specific exclusions for certain structures like swimming pool houses.

Section C: Personal property

Your contents — furniture, electronics, clothing, etc. Coverage is usually 50 to 70 percent of dwelling. Many policies cap individual categories (jewelry, firearms, art) requiring separate riders if you own valuable items.

Section D: Loss of use

Pays for temporary housing if your home is uninhabitable due to a covered event. Usually 20 percent of dwelling coverage. Length of coverage varies by carrier and policy form.