High-value home insurance

Owning your dream home may necessitate paying a premium for certain features. Perhaps you have visions of vaulted ceilings, an indoor sauna, or even a movie theatre. The higher the value of your home, the more homeowners insurance you are likely to require. In fact, if the value of your home exceeds a certain threshold, your coverage may be classified as high-value home insurance, also known as luxury home insurance. So, what exactly is high-value home coverage, and do you require it? StrongInsurance can assist you in making your decision.

What is a high-value home?

The classification of high-value homes differs depending on where you live. A $300,000 home is considered high-value in some areas of the country, but it is considered standard in others. However, regardless of where you live, your home must meet certain criteria in order for you to purchase high-value homeowners insurance. A high-value home, in general, has a replacement cost value of $750,000 or more. The replacement cost value is the amount of money required to rebuild a home to its original condition.

When calculating a home's replacement cost value, the insurance company considers the total cost of rebuilding a home. This includes the cost of repairing the home's structure, as well as the cost of flooring, cabinetry, roofing, and built-in appliances. When all of these factors are taken into account, even a small house can have a high replacement cost value.

What does high-value home insurance cover?

There are several significant differences between a luxury homeowners insurance policy and a standard homeowners insurance policy, particularly in terms of the type of coverage and coverage amounts included. Here are some of the benefits of a high-value home insurance policy:

Increased coverage limits

High-value homeowners insurance policies are typically more comprehensive than standard home insurance policies. On an open perils basis, many luxury home insurance policies cover your home and personal property at their replacement cost value. This means that any losses that are not expressly excluded are covered. With your additional living expenses coverage, you may also receive higher coverage limits for valuable items or additional perks.

Additional coverage options

A high-value home insurance policy may also include coverage types that are not typically found in standard home insurance policies. Many luxury homeowners insurance policies, for example, may include water backup, landscaping, identity theft, and business property coverage as standard. These coverage options will almost certainly have to be added manually to standard home insurance policies.

Policy perks

Some high-value home insurance companies also provide policyholders with additional benefits. Benefits vary depending on the insurance provider, but some advantages include free home appraisals, a cash settlement option in the event of a total loss, deductible waivers for certain losses, and risk consulting to reduce risks in your home.

Dedicated customer service

If you buy a high-value homeowners insurance policy, you may be able to get dedicated customer service. In this case, policyholders are sometimes paired with a concierge or personal representative who can file claims on your behalf, schedule appraisals, find and hire contractors, and book a hotel room if your loss of use coverage is activated.

Best companies for high-value home insurance

Chubb, PURE Insurance, AIG Private Client, and Nationwide Private Client are the best companies for high-value homeowners insurance, according to our research. These companies provide options that may be appealing to high-value homeowners.

We chose the companies based on coverage options, policy features, and average premiums obtained from Quadrant Information Services. We also looked at J.D. Power customer satisfaction ratings and AM Best financial strength ratings. When you have higher coverage limits, you probably want to know that your company provides excellent customer service and is financially stable and capable of paying claims.

One thing to keep in mind about these businesses is that they have lower-than-average customer satisfaction ratings. PURE Insurance, Chubb, AIG, and Nationwide are all rated below the industry average, while Chubb, AIG, and Nationwide are not rated at all. AM Best, on the other hand, has given all four companies excellent financial strength ratings. If you are concerned about customer service, speaking with policyholders or researching how other local homeowners rate the company may help you decide if it is the right fit for you.

Cost of high-value homeowners insurance

The average annual premium in the United States for a high-value home insurance policy with $750,000 in dwelling coverage is $2,568, which equates to $214 per month. In comparison, the average annual premium for a standard home insurance policy with $250,000 in dwelling coverage is $1,312, which works out to be about $109 per month.

Keep in mind that the cost of homeowners insurance varies from person to person. Premiums are calculated using a variety of factors, including your state of residence, claims history, policy type, amount of coverage, deductible selected, and discounts applied. Your ZIP code, age, and credit score all play a role in determining your premium in most states, though not all states allow the use of these rating factors.

How much high-value homeowners insurance do I need?

Knowing how much home insurance you require can be difficult, but with some research, you should be able to establish a general guideline. Consider the following factors when determining how much high-value home insurance you require:

• The value of your home: The amount of high-value home insurance you require should be based on the replacement cost of your home. For example, if it would cost $1.5 million to fully rebuild your home after a covered loss, you should probably buy at least $1.5 million in dwelling insurance.
• Your personal property amount: When it comes to personal property insurance, you'll most likely want enough coverage to replace all of your personal belongings, such as clothing, furniture, appliances, and decor. Creating a home inventory is one of the best ways to estimate the value of your belongings. Don't worry, you won't have to come up with a specific dollar amount for personal property. Most companies automatically include personal property coverage in the range of 50% to 75% of your dwelling coverage amount. An inventory's purpose is to help you determine whether you need to increase that amount or schedule any high-value items.
• Your liability risks: Standard homeowner's insurance policies typically include $100,000 in liability coverage. Depending on the company, the base limit for high-value homes may be higher. If you have a pool, trampoline, swing set, or frequently entertain, you should consider increasing your limit or purchasing an umbrella policy.
• Your particular circumstances: Every house and every homeowner are one-of-a-kind. High-value home insurance can usually be customized with endorsements such as identity theft, water backup, and service line coverage to create a policy that is tailored to your specific needs.

A licensed agent can assist you in determining whether the coverage levels and types you've chosen are appropriate for your needs.

Things to consider when purchasing high-value homeowners insurance

When purchasing a high-value home insurance policy, keep the following factors in mind:

• Your coverage amount: Make sure you get enough coverage for your needs, especially if you're a first-time home insurance buyer.
• Customer service: Look for an insurance company that has a dedicated client concierge and use their expertise to build a strong policy that can help limit risk and provide adequate coverage for your home and personal belongings.
• Premium: While price should not be the only factor considered when insuring a luxury home, it is one. Because they provide more coverage, luxury home insurance policies are typically more expensive than standard policies. To get cheap home insurance, you should shop around and compare quotes from various providers to ensure you are getting the best deal. In addition, look for insurance companies that provide discounts that you can take advantage of.

Frequently asked questions

What is the best homeowners insurance company?

Individuals have different preferences when it comes to the best homeowners insurance company. Which company is best for you will be determined by factors such as the type of coverage you require, where you live, and how much money you want to spend. Understanding your requirements and obtaining quotes from several companies may assist you in locating the best fit.

What information do I need to get a home insurance quote?

Obtaining a home insurance quote is a relatively simple process, and many home insurance companies provide an online quote generator. You will need to provide personal information, such as your birthday and address, as well as information about your home, such as the square footage, materials used in construction, and whether or not the home has had any prior insurance claims. Working with an agent may be a good idea because high-value home insurance may have more considerations than standard policies.

How do I know if I need high-value insurance?

In general, the replacement cost value of a high-value home is around $750,000. However, because home prices and the cost of living vary, so does the high-value home threshold. If your home has custom features, expensive finishes, or is larger than average homes in your area, you should consult with an agent to see if high-value insurance is appropriate for you.

Do all companies offer high-value home insurance?

No. Some companies have special underwriting rules for high-value coverage, which is frequently packaged under a different company name. Nationwide and AIG, for example, both write high-value home insurance under the “Private Client” brand. These policies differ from standard Nationwide and AIG policies in that they can provide different types of coverage, limits, and options.

Although not all companies have separate sections for high-value home insurance, they may still provide high-value coverage. Furthermore, some companies may only offer coverage up to a certain dwelling amount, implying that high-value homes would be underinsured and homeowners would need to obtain coverage elsewhere.

Methodology

SrongInsurance analyses 2021 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. using Quadrant Information Services. Rates are based on 40-year-old male and female homeowners with no claims, good credit, and the following coverage limits:

• Coverage A, Dwelling: $750,000
• Coverage B, Other Structures: $25,000
• Coverage C, Personal Property: $125,000
• Coverage D, Loss of Use: $150,000
• Coverage E, Liability: $500,000
• Coverage F, Medical Payments: $1,000

In addition, the homeowners have a $1,000 deductible as well as a separate wind and hail deductible (if required).

These are sample rates and should only be used for comparison. Your quotes will be unique.