Home Insurance Prices Can Vary Wildly, Survey by State Finds : Rates: Some companies might charge twice as much as others for similar coverage. Southern Californians generally have to pay more than Northern Californians.
A new state Department of Insurance survey of comparative pricing for California homeowner coverage demonstrates, once again, that if consumers shop around for insurance, it can pay off substantially.
Within the same ZIP codes, for basically the same amount of coverage, prices can easily vary more than 100% among companies, although some of the price differences may be accounted for by special discounts or credits individual companies have for particular customers and situations.
There also are considerable differences in price by geographic area, with coverage in Sacramento and other Northern California cities usually running less than the same coverage in the metropolitan areas of Southern California. But these differences are not nearly as great as in auto insurance, where premiums may be three or four times as high in the Southland as in Northern California.
Insurance Commissioner Roxani Gillespie, releasing the exhaustive statewide survey this week, said her department had surveyed 119 companies and was providing pricing charts for a selected 30 of them, representing about 80% of all the homeowners insurance sold in the state. Space limitations required a further narrowing of the range of companies and ZIP codes shown in the charts accompanying this article.
The examples provided by the Insurance Department are representative samples, but it is unlikely that a policyholder’s situation will conform precisely to any one of them. In short, the prices listed in the survey are more illustrative of prevailing patterns in certain areas than a guide to exact amounts that consumers may pay.
Khalid Al-Faris, chief of the Insurance Department’s Statistical Analysis Bureau, said a new comparative pricing survey for auto insurance will be released next month.
But Gillespie’s department has not yet complied with a provision of Proposition 103 that mandates: “Upon request, and for a reasonable fee to cover costs, the commissioner shall provide consumers with a comparison of the rate in effect for each personal line of insurance for every insurer.”
Al-Faris said the department is working on this, and plans to provide, beginning in early 1991, such information through a 900 toll-telephone service.
He said that when this starts, for a reasonable fee any consumer desiring to buy an auto, homeowner or other personal policy will be able to call the Insurance Department, give information about his or her situation, and receive quotes citing the range of prices from companies offering insurance in his or her area.
This system will be much more precise, extensive and immediately usable than the periodic surveys the department has released in recent years.
Al-Faris said the department also wishes to caution buyers of homeowners policies that the value of the policy should be pegged to the replacement value of the dwelling or contents in question, and not include the land value. A home that would sell for $250,000 might cost only about half that to replace, and the Insurance Department advises consumers not to buy $250,000 insurance on it.
One weakness revealed in the past about surveys such as the one released this week is that they do not attempt to ascertain how available the various companies’ policies might be in the specific ZIP codes listed.
Because of varying underwriting standards, companies are often far more willing to sell in some areas than others. In some areas, companies may list prices for Insurance Department surveys but do not have agents available and may even refuse all but the least-risky business.
In a statement accompanying the survey, Gillespie noted that it assumes “that the lowest applicable fire protection class applies, which means all the risks are located within a reasonable distance to a responding firefighting unit.”
The lack of such a unit would mean a sharply higher price, an illustration of how the figures should be viewed with caution.
A survey by the CalPirg consumers research organization three years ago also showed that shopping around for insurance, as Gillespie and her aides recommend, is not necessarily easy. The survey indicated that companies or agents may be unresponsive on the phone and, when they do respond, may give inaccurate quotes. Calls to different agents often elicited sharply different price quotes.
HOMEOWNER INSURANCE RATES COMPARED
The state Department of Insurance surveyed insurance companies selling homeowners coverage and the 12 companies shown in these charts are a representative sample of their comparative premiums in various areas. Four rating examples are shown here, labeled A through D, and covering policies for two differently valued houses, as well as a condominium policy and a tenant policy. Features of the various company policies vary in some particulars, but in general coverage includes loss for fire and theft, injuries to individuals and damage to contents. In homeowners policies, properties are seldom covered for their full value, since a substantial portion of that value is the land on which they are built. Generally, coverage is for the replacement value of the dweller. It is assumed that the land will still be there, even if the dwelling is destroyed. The policies cited here do not include earthquake coverage.
THE RATING EXAMPLES A: $250,000 homeowners policy on a home built in 1984 B: $125,000 homeowners policy on a home built in 1969 C: $40,000 condominium policy D: $25,000 tenant policy
State Farm Fire & Casualty Allstate SAFECO USAA LOS ANGELES (ZIP 90001) A $1122 $1046 $954 $603 B 668 553 629 367 C 242 193 289 132 D 294 202 227 156 PASADENA (ZIP 91107) A 783 892 693 603 B 397 494 440 367 C 144 173 210 124 D 182 181 239 156 SANTA MONICA (ZIP 90405) A 652 689 698 603 B 419 367 431 367 C 194 156 289 124 D 238 163 227 156 LONG BEACH (ZIP 90806) A 783 1046 687 626 B 397 553 440 381 C 144 193 164 116 D 182 202 170 156 RIVERSIDE (ZIP 92501) A 835 738 896 554 B 484 418 556 335 C 144 111 150 96 D 182 117 190 156 SAN BERNARDINO (ZIP 92408) A 835 738 877 554 B 484 418 556 335 C 144 111 150 96 D 182 141 190 156 SANTA ANA (ZIP 92704) A 679 690 579 530 B 384 390 369 321 C 144 125 143 93 D 182 141 180 156 SAN DIEGO (ZIP 92113) A 700 605 665 506 B 378 306 426 306 C 110 99 143 86 D 140 93 190 156 SANTA BARBARA (ZIP 93101) A 507 497 414 482 B 275 277 250 292 C 106 90 179 81 D 131 93 147 156 OXNARD (ZIP 93030) A 543 565 418 482 B 313 304 253 292 C 106 99 181 81 D 131 107 148 156
SACRAMENTO (ZIP 95838) A 860 779 820 626 B 490 459 527 381 C 166 168 162 109 D 218 104 168 156
Twentieth Century Aetna Prudential LOS ANGELES (ZIP 90001) A $762 $1124 $945 B 450 533 588 C 209 204 303 D X 275 345 PASADENA (ZIP 91107) A 584 1053 650 B 342 463 400 C 160 204 211 D X 275 241 SANTA MONICA (ZIP 90405) A 527 1018 558 B 324 479 369 C 170 204 186 D X 275 212 LONG BEACH (ZIP 90806) A 584 1290 566 B 342 573 346 C 160 204 175 D X 275 198 RIVERSIDE (ZIP 92501) A 540 934 661 B 325 403 406 C 136 137 139 D X 172 158 SAN BERNARDINO (ZIP 92408) A 540 934 661 B 325 403 406 C 136 137 153 D X 172 173 SANTA ANA (ZIP 92704) A 536 709 567 B 306 326 375 C 145 137 147 D X 172 168 SAN DIEGO (ZIP 92113) A 457 787 501 B 279 372 329 C 113 137 133 D X 172 152 SANTA BARBARA (ZIP 93101) A 449 607 452 B 279 285 296 C 105 137 129 D X 172 146 OXNARD (ZIP 93030) A 449 705 452 B 279 323 296 C 105 137 129 D X 172 146 SACRAMENTO (ZIP 95838) A 630 1285 770 B 376 568 476 C 165 157 211 D X 208 241
Transamerica LOS ANGELES (ZIP 90001) A $751 B 464 C 193 D 282 PASADENA (ZIP 91107) A 731 B 451 C 193 D 282 SANTA MONICA (ZIP 90405) A 751 B 464 C 193 D 282 LONG BEACH (ZIP 90806) A 731 B 451 C 193 D 282 RIVERSIDE (ZIP 92501) A 568 B 351 C 131 D 191 SAN BERNARDINO (ZIP 92408) A 554 B 341 C 131 D 191 SANTA ANA (ZIP 92704) A 554 B 341 C 131 D 191 SAN DIEGO (ZIP 92113) A 568 B 351 C 131 D 191 SANTA BARBARA (ZIP 93101) A 476 B 290 C 131 D 191 OXNARD (ZIP 93030) A 476 B 290 C 131 D 191 SACRAMENTO (ZIP 95838) A 633 B 391 C 163 D 237
Farmers Liberty Mutual LOS ANGELES (ZIP 90001) A $1982 $1189 B 919 675 C X 261 D 403 317 PASADENA (ZIP 91107) A 1164 866 B 552 495 C X 224 D 301 242 SANTA MONICA (ZIP 90405) A 918 836 B 562 481 C X 195 D 375 251 LONG BEACH (ZIP 90806) A 1136 866 B 554 495 C X 224 D 251 242 RIVERSIDE (ZIP 92501) A 1160 919 B 646 521 C X 179 D 280 202 SAN BERNARDINO (ZIP 92408) A 1160 919 B 646 501 C X 179 D 280 202 SANTA ANA (ZIP 92704) A 835 861 B 491 458 C X 179 D 254 202 SAN DIEGO (ZIP 92113) A 1031 750 B 537 428 C X 139 D 210 153 SANTA BARBARA (ZIP 93101) A 739 658 b 405 381 C X 103 D 211 131 OXNARD (ZIP 93030) A 739 658 B 405 381 C X 103 D 211 131 SACRAMENTO (ZIP 95838) A 1408 1002 B 795 530 C X 160 D 348 249
Auto Club of So. California Calfarm LOS ANGELES (ZIP 90001) A $918 $1080 B 645 711 C 203 268 D 258 297 PASADENA (ZIP 91107) A 637 798 B 443 479 C 157 233 D 228 297 SANTA MONICA (ZIP 90405) A 620 949 B 435 551 C 181 233 D 268 297 LONG BEACH (ZIP 90806) A 637 921 B 443 551 C 157 233 D 228 297 RIVERSIDE (ZIP 92501) A 677 758 B 462 455 C 139 190 D 223 240 SAN BERNARDINO (ZIP 92408) A 675 611 B 461 368 C 139 190 D 223 240 SANTA ANA (ZIP 92704) A 643 604 B 449 360 C 139 200 D 224 255 SAN DIEGO (ZIP 92113) A 570 578 B 393 370 C 119 154 D 171 193 SANTA BARBARA (ZIP 93101) A 487 445 B 347 306 C 116 146 D 54 184 OXNARD (ZIP 93030) A 487 486 B 347 312 C 116 146 D 154 184 SACRAMENTO (ZIP 95838) A X 772 B X 506 C X 198 D X 250
X: Not available. Source: California Department of Insurance
Compiled by Times researcher Michael Meyers
