High-value home insurance is a great alternative to standard home insurance for individuals whose homes and personal belongings are worth more than the coverage limits provided by traditional homeowners insurance policies.
High net worth individuals that own and maintain luxury homes need expanded coverage limits to ensure they are able to repair their properties to their original condition if they are damaged by a covered peril. Aside from higher coverage limits, high-value home insurance policies provide several benefits and perks that you typically won’t find in standard home insurance policies.
To ensure your property and belongings are fully covered, here’s everything you need to know about how to find the best high-value home insurance policy.
What is High-Value Home Insurance?
High-value home insurance is a specific type of homeowners insurance that offers higher coverage limits and other benefits to protect you, your property, and your personal belongings against a wide range of common hazards.
If you own a high-value home and expensive personal items like jewelry, fine art, and antique furniture, a standard homeowners insurance policy may not offer sufficient coverage. As a result, if your property or belongings are lost or damaged, you may have to pay out-of-pocket to cover the gaps left by your home insurance policy.
Not only do high-value home insurance policies offer more coverage for your home and belongings, but they also offer higher personal liability and additional living expenses (ALE) coverage limits.
What is a High-Value Home?
Most insurance providers classify a high-value home as one worth more than $1mil.This is typically the point at which standard home insurance policies will no longer offer enough coverage to repair or replace your home if it is damaged or destroyed by a covered peril like a fire. Homes of this value are also likely to contain particularly valuable items, which may not be sufficiently covered by the limited personal property coverage included in standard home insurance policies.
High-Value Home Insurance vs. Standard Home Insurance
High-value home insurance and standard home insurance are very similar in that they both exist to protect your property and belongings against common hazards, including fires, vandalism, storms, and more. They also include liability coverage to help cover medical expenses and lawsuits if someone is injured on your property.
However, high-value home insurance typically provides much more comprehensive coverage to ensure your property and belongings are able to be replaced if they are damaged, lost, or stolen.
Dwelling coverage helps pay for damages to your home’s primary structure if they are caused by a covered peril.
Standard home insurance policies typically let you choose between actual cash value coverage or replacement cost coverage. The former covers the depreciated value of your home, while the latter pays to repair or rebuild your home to its original quality using the current cost of building materials.
High-value home insurance policies, on the other hand, often provide extended replacement cost coverage, which means that your policy may reimburse you for more than the amount listed on your policy if your home is damaged or destroyed. These policies may also offer cash-out coverage, which allows you to opt for cash payment to build a home elsewhere if your home is destroyed.
High-value home insurance policies offer much better contents coverage than standard home insurance policies. This is important for high-value homeowners that have expensive personal items, including jewelry, fine art, antiques, silverware, firearms, and similar items.
Standard home insurance policies will generally only cover items like these up to $2,500. While you can often purchase additional coverage for specific items, these policies will usually not provide sufficient coverage for all of your valuables.
High-value policies will offer extended contents coverage limits, often covering items up to $25,000.
High-value homeowners with valuable assets need extensive personal liability coverage as they stand to lose a lot in a lawsuit. High-value homeowners may also be considered more attractive targets for potential lawsuits.
Like standard home insurance policies, high-value home insurance policies provide personal liability coverage and let you choose your coverage limit. However, high-value home insurance policies will also often cover legal expenses that exceed your liability coverage limit.
These policies may also provide personal injury coverage, which is typically only available through umbrella insurance policies, and many high-value home insurance providers give policyholders access to high amounts of excess liability coverage.
ALE coverage reimburses homeowners for living expenses that they incur if a covered peril causes their home to become temporarily uninhabitable. This can include hotel costs, meals, and more.
While standard home insurance policies have limits to the amount of ALE coverage they provide, high-value home insurance policies typically provide ALE coverage with no upper limit. This means that policyholders are able to maintain the same living standards while they wait for their homes to be rebuilt or repaired after a disaster.
High-Value Home Insurance Perks for Homeowners
In addition to providing extended coverage limits, high-value home insurance policies often provide a variety of benefits, coverages, and perks that help policyholders get more value from their home insurance policies.
Coverage for vacation homes and second homes
High-value homeowners are more likely to own vacation homes and secondary properties that they live in throughout the year.
With high-value home insurance, depending on your provider, you may be able to customize your policy to include coverage for any additional properties that you may own.
Identity theft coverage
High net worth homeowners may be more likely to become victims of fraud and identity theft due to the value of their assets.
High-value home insurance policies may include identity theft coverage to protect you against fraudulent activities. Alongside this coverage, some insurance providers will monitor your accounts to keep an eye out for unusual activity, making you less likely to have your identity stolen.
Kidnap, ransom, and extortion coverage
Certain high-value home insurance providers, like Chubb and AIG, provide kidnap, ransom, and extortion coverage.
This coverage may pay for ransoms, crisis management services, and other expenses that may arise if you or a covered individual are victims of kidnapping or extortion. Crisis management services may include negotiations, the delivery of ransom funds, and similar activities.
High-value home insurance policies often include deductible waivers for large losses. This means that if your loss exceeds a specific amount detailed in your insurance policy, you won’t have to pay your deductible.
Sewer and pipe backup coverage
Standard home insurance policies generally do not offer sewer and backup coverage. High-value home insurance policies, on the other hand, often do provide this coverage to help protect your property against water damage.
Complimentary home inspections
High-value insurers often offer complimentary home inspections. This helps the insurer provide an appropriate amount of coverage for your home. Even in cases where insurers don’t provide complimentary home inspections, they will often split the cost with you.
Partial loss coverage
Insurers are typically not obligated to ensure replacement materials match your home’s original materials if only a portion of your home is damaged. Standard home insurance policies will often replace these materials with materials of similar quality, but they may not be an exact match.
High-value policies will generally replace any damaged materials with the original materials included in your home.
Replacement of pairs and sets
If you own a pair or set of items and only one of the items is damaged, your high-value home insurance policy will likely pay to replace the entire set, while standard home insurance policies will often only reimburse you for the cost of the damaged item.
Employment practices liability coverage
High-value insurance policies may include employment practices liability coverage to protect you against accusations of wrongful termination or discrimination from in-home employees.
How to Find the Best High-Value Home Insurance Policy
There are several insurers that provide high-value home insurance policies, including companies like AIG, Chubbs, PURE, Cincinnati Insurance Company, and more.
To find the best high-value home insurance policy for you, keep these tips in mind:
- Compare quotes from at least three insurance companies
- Use the same coverages and limits when requesting quotes
- Compare additional perks and benefits offered by different policies
- Ask whether the insurer offers extended replacement cost coverage
- Review policies to see if they cover you against all risks or only named perils
- Review how much contents coverage is included in each policy
Homeowners should also consider any unique circumstances that apply to them, including whether or not they need coverage for a vacation home or second home, whether they plan to have any in-home employees, and similar circumstances.
How Much Does High-Value Home Insurance Cost?
As high-value home insurance policies provide extended coverage limits and additional benefits, they will cost more than a standard home insurance policy.
The exact cost of your policy will depend on several factors, including:
- Home value
- Home age
- Claims history
- Credit score
- Optional coverages
- Coverage limits
These factors and others may be used to determine your premium. Ask your insurance provider for a cost breakdown to determine what factors impact your policy’s cost.
Request a Quote
High-value home insurance may provide the additional coverage and benefits you need to protect your property and belongings if you own a luxury home. By comparing multiple policies and coverages, you can find the best high-value home insurance policy for your needs.
At KSA Insurance, we work with residents in South Carolina and across the southeastern United States to help them find comprehensive high-value home insurance policies that protect their homes and valuables against a wide range of common hazards.
Contact us today to request a quote and learn more about high-value home insurance.