Is Homeowners Insurance Mandatory in California?

Is Homeowners Insurance Legally Required in California?

No, California does not legally require homeowners to carry insurance. If you own your home outright (with no mortgage or lien), you’re under no legal obligation to purchase homeowners insurance.

However, that doesn’t mean going without insurance is a good idea. A single fire, burglary, or liability claim could lead to massive out-of-pocket losses—and even the total loss of your home.

When Is Homeowners Insurance Required?

While the state of California doesn’t mandate homeowners insurance, your mortgage lender probably does. Most lenders require proof of homeowners insurance before they’ll fund a loan—and they may continue monitoring your policy each year.

If you cancel your coverage or let it lapse, your lender may purchase "force-placed insurance" on your behalf—usually at a much higher cost, and with limited protection.

You’re typically required to carry enough insurance to:

• Cover the replacement cost of the structure
  
  
• Include liability protection
  
  
• Name the lender as a loss payee
  

What Happens If You Don’t Have Insurance?

If you don’t have a mortgage, going without insurance won’t result in legal penalties—but it’s risky.

Here’s what could go wrong:

• Wildfire or earthquake loss could wipe out your home value
  
  
• Theft or vandalism may result in total losses
  
  
• Lawsuits due to injuries on your property could result in serious financial liability
  

Are There Special Considerations in High-Risk Zones?

In California, many homes are located in wildfire-prone or earthquake-prone areas, which complicates coverage availability. Some insurers have reduced offerings in these high-risk zones—but insurance is still technically optional.

If you can’t get coverage through the standard market, you may qualify for the California FAIR Plan, a last-resort insurance program that provides basic fire coverage.

How eWay Insurance Helps California Homeowners

At eWay Insurance, we help homeowners across California—whether you own your home outright or have a mortgage—get the protection you need without paying for what you don’t.

We’ll guide you through:

• Understanding mortgage insurance requirements
  
  
• Exploring coverage options for wildfire-prone or hard-to-insure areas
  
  
• Supplementing coverage with earthquake or flood protection
  
  
• Getting quotes from multiple trusted carriers to find the best rate
  

Frequently Asked Questions

1. If I paid off my house, do I still need homeowners insurance?
No, it’s not legally required—but it’s highly recommended. Your home is still at risk of fire, theft, weather damage, or liability claims.

2. Can I drop insurance once my mortgage is paid off?
You can, but it’s not advisable. Without insurance, you’ll be responsible for 100% of any damage or legal claims against your property.

3. What if I live in a wildfire zone and can't get private insurance?
You may be eligible for the California FAIR Plan, which offers basic fire insurance. eWay Insurance can help you pair this with additional coverage.

4. Is homeowners insurance expensive in California?
It depends on your location, home value, and risk level. Homes in wildfire zones tend to be more costly to insure—but eWay Insurance can compare rates from multiple carriers to help you save.

5. Does homeowners insurance cover earthquakes in California?
No. Earthquake coverage must be purchased as a separate policy or an add-on. We can help you bundle this into your plan if needed.

Final Thoughts

While homeowners insurance isn’t mandatory by law in California, it is almost always required by lenders—and always recommended for protecting your home and finances.

Let eWay Insurance help you stay protected with the right policy for your needs, no matter where you live in the Golden State.