Home insurance coverage options for homeowners with high-value properties

For homeowners with luxury homes and significant wealth, regular homeowners insurance might not be enough. That’s where high-value home insurance comes in. These policies provide higher coverage limits and better protection for both the property and its owners.

What is a high-value home?

High-value homes can mean different things depending on where you live. For instance, a $300,000 home might be considered high-value in one area but not in another. But generally, high-value homeowners insurance is for homes worth $750,000 or more to replace.

When insurance companies decide how much it would cost to replace a home, they look at everything needed to rebuild it from scratch, like repairs, flooring, cabinets, and appliances. Even smaller homes can have a high replacement cost when you add up all these expenses.

Most high-value home insurance policies cover homes worth at least $750,000, but some only cover homes worth $1 million or more.

Regular home insurance might not give enough coverage for high-value homes and their fancy stuff like antiques and jewelry. So, there are special policies for these homes, like AIG’s Private Client, Chubb’s Masterpiece, and others listed above. They’re made to meet the unique needs of wealthy homeowners.

What does high-value home insurance cover?

High-value homeowners insurance is quite different from regular homeowners insurance. Here are some things it usually covers:

Higher coverage limits

Luxury home insurance is usually better than regular home insurance. It covers your home and belongings for their full value and protects against most types of damage, unless it’s specifically excluded. You might also get more coverage for valuable items and extra benefits for things like temporary housing if your home becomes uninhabitable.

Additional coverage options

High-value home insurance usually comes with extra coverage that regular home insurance doesn’t have. Things like protection against water damage, coverage for your landscaping, identity theft, and even your business property might be included automatically. With standard home insurance, you usually have to add these extras yourself, and they may cost more.

Policy perks

Some high-value home insurance companies offer special benefits to their policyholders. These perks can differ depending on the insurer, but they might include free home appraisals, getting cash if your home is completely destroyed, not having to pay a deductible for certain types of losses, and services to help reduce risks in your home.

Dedicated customer service

When you get high-value homeowners insurance, you usually get personalized service. This means you’ll have your own customer service person, like a concierge or personal representative, to help you with everything related to your insurance. They can help you file claims, set up property appraisals, find contractors, and even arrange temporary housing if you need it because of something covered by your policy.

Increased Coverage Limits Under a High-Value Home Insurance Policy

Luxury home insurance policies are usually quite different from regular ones in several important ways.

Better Dwelling Coverage

Regular homeowners insurance typically covers damage to your house and belongings. Your policy usually specifies a set amount of coverage for your house, which is listed on your policy’s declaration page.

But high-value home insurance goes further. It often includes extended replacement cost coverage for your house and other structures. This means you’ll be reimbursed for home repairs even if they exceed the amount listed on your policy. This can be really helpful if construction costs spike after a disaster, like a tornado.

Another perk of high-value home insurance is the “cash out” option. If your home is completely destroyed, this lets you take a cash settlement from your insurance and rebuild elsewhere.

Better Contents Coverage

Luxury homeowners often prioritize having sufficient insurance coverage for their valuable possessions, which are typically found in their high-end residences.

For example, Kingstone Insurance’s high-value home policy in New York offers extensive coverage for belongings, including:

– Higher levels of contents coverage
– Coverage for jewelry up to $150,000 in total, with a limit of $10,000 per item
– $25,000 coverage for breakage of antiques, fine art, and collectibles

High-value home policies enhance contents coverage in several ways:

1. “All risks” coverage: While standard home insurance usually protects dwellings against all risks, contents are often covered for only specific perils like fire and lightning. High-value home policies typically cover contents against all risks.

2. Replacement cost: With a standard policy, you might have to choose between insuring possessions for their actual cash value or replacement cost. Replacement cost coverage is better as it pays for new items to replace the damaged ones. High-value home insurance policies usually include replacement cost automatically, ensuring you get reimbursed for the full value of lost items, not their depreciated worth.

3. Pairs and sets: Damage to one item in a pair or set can be tricky when finding an exact replacement. High-value homeowners insurance often covers the replacement of the entire pair or set, offering comprehensive protection for valuable collections.

Better Liability Coverage

For those with significant assets, having strong liability coverage is crucial to protect against potential losses in legal battles, especially considering the attractiveness as a target for lawsuits.

High-value home insurance policies provide liability coverage similar to standard policies, allowing you to choose a coverage limit. However, they often go further by including extra provisions, like covering legal defense costs beyond the liability limit. This ensures that a larger part of the coverage is available to settle legal judgments and claims.

Moreover, liability insurance in these policies may also include personal injury coverage, protecting against things like libel, slander, and defamation—features usually found in umbrella insurance policies.

Additionally, high-value homeowners insurance policies offer substantial excess liability coverage, sometimes reaching large amounts such as $50 million (Chubb) or even $100 million (AIG), providing unmatched protection against potential liabilities.

Additional Increased Coverage

A high-value home insurance policy typically goes beyond standard coverage by providing:

1. Automatic coverage for sewer backup issues.
2. Higher coverage limits for replacing shrubs and trees.
3. Better reimbursement for tree removal, often up to $1,000 per fallen tree.
4. Increased medical payments limits, like $10,000 compared to the standard $1,000, covering visitors’ injuries, no matter who’s at fault.
5. Expanded coverage for credit card fraud, forgery, and counterfeit money issues, often up to $10,000, which is more than the standard $500 limit in regular policies.

Additionally, high-value homeowners insurance may include:

– Flood insurance, filling a gap in standard policies and providing adequate coverage for luxury properties.
– Coverage for vacation and second homes, offering customization to protect multiple properties.
– Personal kidnap ransom and extortion coverage, available from insurers like AIG and Chubb, providing financial protection and crisis management services in emergencies.
– Deductible waivers for significant losses, ensuring no out-of-pocket expenses if damages exceed a certain threshold, often set at $50,000 or more.
– Free home appraisal services, either fully covered or cost-shared, to accurately assess property value.
– Risk management services, such as Chubb’s wildfire defense service, which includes on-site assessments and preventive measures to reduce risks in disaster-prone areas.

Best companies for high-value home insurance

Based on our thorough analysis, top-tier insurance companies serving high-value homeowners include The Hartford, Farmers, Chubb, and PURE Insurance. These industry leaders offer comprehensive coverage options and custom-tailored policies crafted to meet the unique needs of affluent clients. With a strong focus on exceptional service and reliable financial stability, these companies consistently rank among the best in the industry.

Our selection process involved careful examination of coverage offerings, policy features, and average premiums obtained from Quadrant Information Services. Additionally, we considered J.D. Power customer satisfaction ratings and AM Best financial strength ratings to ensure that the chosen insurers have a proven track record of honoring their financial commitments and providing superior service to policyholders.

Company J.D. Power score Average annual premium for $750,000 dwelling coverage













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Cost of high-value homeowners insurance

In the United States, the average yearly cost for high-value home insurance, covering a $750,000 home, is around $3,761, which comes to about $313 monthly. On the other hand, standard home insurance policies, which cover a $250,000 home, have an average yearly premium of $1,428, or about $119 per month.

Keep in mind that the actual cost of homeowners insurance can vary. Factors like where you live, your claims history, the details of your policy, coverage limits, deductible choice, and any discounts you qualify for all play a role in determining your premium. Additionally, some states consider ZIP code, the age of your home, and your credit history when calculating premiums, although not all states allow these factors to be used.

How much high-value homeowners insurance do I need?

Determining how much high-value home insurance you need involves looking at a few key factors. Here’s a simple guide to help you figure it out:

1. Replacement Cost of Your Home:Start by figuring out how much it would cost to rebuild your home from scratch. This is called the replacement cost value. Let’s say it would cost $1.5 million to rebuild your house. Make sure your insurance covers at least that amount.

2. Coverage for Your Stuff:Take stock of all your belongings, like clothes, furniture, appliances, and decorations. You can make a home inventory to help with this. Most insurers automatically cover a portion of your home’s value for personal property, usually between 50 to 70 percent. Make sure this covers all your stuff or adjust it if needed.

3. Liability Risks:Think about any potential liability risks you might face. Standard policies usually start with $100,000 in liability coverage, but for high-value homes with features like pools or frequent guests, you might want more coverage. You can increase your coverage or consider getting an umbrella policy for extra protection.

4. Extra Living Expenses: Consider coverage for extra living expenses. This comes into play if your home gets damaged and you need to live somewhere else temporarily. This coverage helps with things like hotel stays and meals until you can move back home.

5. Special Situations: Customize your coverage to fit your specific needs. High-value home insurance often offers add-ons for things like identity theft, water backup, and service line coverage. These extras let you tailor your policy to match your situation.

Since insurance can get pretty complicated, it’s a good idea to talk to a licensed agent. Independent agents can give you advice on what coverage you need and help you pick the right insurance company for you. They know the ins and outs of insurance and can make sure you’re properly protected.

Things to consider when purchasing high-value homeowners insurance

When you’re getting high-value home insurance, remember these key things:

1. Coverage Amount: Make sure the coverage you pick covers everything you need, especially if you’re new to home insurance. Think about what you own and what needs protecting.

2. Customer Service: Choose an insurance company that’s known for taking care of its customers. Look for ones that offer personalized service to help you get the right coverage for your home and belongings.

3. Replacement Cost Coverage: Understand how your policy figures out the cost of replacing your stuff. Some policies give you the actual cash value, which considers depreciation, while others give you replacement cost coverage, which doesn’t. There’s also extended replacement cost coverage, which can pay more than your policy limit if you have a total loss.

4. Premium: Price is important, but it’s not the only thing to think about. High-value home insurance can be pricey because it covers a lot. Compare prices from different companies and see if you qualify for any discounts to get the best deal.

5. Additional Coverage: High-value home insurance often comes with extra coverage that standard policies don’t have. This could include coverage for vacation homes, special assessments to manage risks, and cash payouts if you have a total loss. Check out these extras to see if they’re worth it for you.

By thinking about these factors carefully and talking to insurance experts, you can get high-value home insurance that gives you peace of mind and protects your valuable assets.

Frequently asked questions

Finding the right homeowners insurance company is a personal decision that depends on what you need, where you live, and how much you want to spend. Look for things like good financial ratings, good customer service, and ratings from places like J.D. Power. Get quotes from different companies to see which one fits your needs best.

For high-value homes, insurance usually kicks in when your house is worth around $750,000 or more. But this can vary based on where you live and how expensive things are there. If your home has fancy features or is bigger than others in the area, you might need high-value insurance. Talk to an insurance agent to see if this is the right choice for you.

Some insurance companies have special coverage just for high-value homes. They might go by different names, like “Private Client” at Nationwide or AIG. Make sure the company you choose has options for high-value properties and doesn’t limit coverage based on home value. An insurance agent can help you figure out the best company for you.

The HO-5 policy is the gold standard for home insurance, covering pretty much everything on an open peril basis. It’s great for high-value homes and usually comes with extra features that vary depending on the company.

High-end insurance companies usually charge more because they offer better coverage and higher limits. But your actual rate depends on things like where you live and your personal background. Shop around to find a policy that gives you the protection you need at a price you can afford.

Amy Danise

Amy Danise is the managing editor for Sufn.info and Forbes Advisor's insurance section, covering auto, home, renters, life, pet, travel, health, and small business insurance. With over 30 years in the insurance sector, she specializes in simplifying complex insurance topics into actionable information. Amy collaborates with her team to translate insurance jargon into clear language for consumers, helping them understand insurance costs and find top-rated companies. Leveraging her extensive industry contacts, she develops Forbes Advisor's insurance content and analyzes state regulatory filings for insights. Amy's expertise has earned her features in major news outlets like The New York Times and The Wall Street Journal. She holds a Bachelor's degree in American Studies from Wesleyan University.

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