Claire Smith Last Updated On: October 16, 2023

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What is High-Value Home Insurance?

Home Insurance

As the name suggests, high-value home insurance is for homeowners with a property with high net worth. This means not everyone will benefit from high-value home insurance.

Thus, what’s the threshold for a high-value home? And what perks do you get for taking out a high-value policy? If you own a house that meets the financial criteria for high-value home insurance, are you pigeonholed into taking out a high-value policy, or do you have options?

Read on to find out if your home qualifies for high-value home insurance.

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Define: What is High-Value Home Insurance?

According to most insurance companies, a high-value home is anything that would cost upwards of $750,000 to rebuild. However, not all states have homes valued at $750,000, so that dollar value is relative to the state you call home. For instance, some states consider $300,000 a high-value house. 

The real test for whether your home is considered high-value is whether it meets specific criteria. These are the factors that insurance companies use to determine if your home is considered high-value:

  • If your home needs replacing from the ground up, the replacement cost would be $750,000 or more for your home to be considered high-value.
  • When your insurance provider calculates the replacement cost for your home, it considers not only building materials, but also cabinets for your kitchen, flooring, roofing, and even built-in appliances—this all increases the replacement value of your property. 
  • You’ll qualify for high-value home insurance if you have millions in investments or expensive valuables.

What High-Value Home Insurance Covers

When looking into home insurance, you naturally want to explore all your options. Knowing whether you should take out a standard home insurance policy or a high-value one is beneficial. 

One thing to note is that high-value and traditional home insurance policies aren’t the same; they are actually quite different.

Here’s what you get when you take out a high-value home insurance policy:

Better Customer Service

One feature of high-value policies is you get access to dedicated customer service. Traditional home insurance, you often hear that customer service is uneven—sometimes you get a great advisor, other times you’re left wanting for one—while high-value home insurance comes with gold-star service.

When you take out a policy, your insurer will match you with a personal representative who does the legwork on your behalf, like filing claims, scheduling appraisals, or hiring a contractor to complete repairs. 

Higher Coverage Limits

With a higher-value home comes the need for greater coverage limits. Fortunately, a high-value home insurance policy will give you more dynamic coverage for your home and personal property. Typically these plans will cover the replacement cost value, not the depreciated value, as with most standard home insurance plans. There is also the possibility of raising your valuable coverage limits with additional living expenses coverage.

Keep in mind that high-value policies protect against open peril, meaning home insurance covers anything not listed as an exclusion.  

Some features associated with high-value coverage limits that your policy may offer you are:

  • Guaranteed replacement cost in a total loss, even if the cost to rebuild is more than your policy limits.
  • Guaranteed replacement costs in a total loss for your belongings, not their actual cash value.
  • Offers all-risk coverage against all perils except those listed as exclusions to your home, property, and personal belongings.
  • Increased coverage limits on scheduled items or blanket personal property like valuables or collectibles.
  • Increased additional living expenses or temporary housing for homeowners with homes that sustained damage from a covered peril and have to move elsewhere during repairs.
  • Increased limits for debris removal and landscaping to cover tree removal or debris clean up after a wind storm or natural disaster.
  • Increased personal liability coverage and umbrella insurance to cover your assets.

Additional Coverage Options

Another key difference between high-value and traditional home insurance is what comes standard with your policy. High-value plans typically come with landscaping, identity theft, water backup, and business property coverage as standard. In contrast, traditional home insurance policies offer these features as optional add-ons you must pay extra for.

These are some additional home insurance coverages that may come standard with your high-value policy:

  • Increased flood limits for your home and personal belongings.
  • Water backup coverage for your sump pump, sewer, or drains.
  • Identity theft recovery services like paying legal fees against the perpetrator that stole your identity or connecting the homeowner with a consumer fraud specialist.
  • Increased liability coverage against personal injury, slander, false arrest, wrongful eviction, or libel.
  • Extortionist coverage (ransom, kidnap, or extortion) and crisis management services for you and your family.
  • Ordinance, if your home is damaged after a covered peril, this coverage will ensure your home is up to code.
  • Business property coverage for your stolen or damaged business goods, like your laptop.
  • Increased protection to secondary properties, including a vacation home, even if it’s located out of the country.

Policy Perks

The final benefit associated with high-value home insurance is the additional perks. Policy perks are dependent on the provider. Some of the policy perks that may come with your high-value account are:

  • Complimentary house appraisal or evaluation to ensure you have sufficient coverage.
  • Risk or loss reduction consultation for your property to help safeguard your home from known perils.
  • Deductible waivers for named losses are frequently waived for anything over $50,000.
  • Cash-out settlement option, rather than rebuilding, if your house is a total loss.
  • Increased wildfire protection for homeowners living in a high-risk wildfire zone, like getting private firefighters to protect their property during a fire.
  • Increased hurricane protection services for homeowners living in hurricane zones, like storm monitoring updates, quick claim processing time, and immediate access to qualifying restoration companies.
  • Architectural legacy services include risk assessments and a historic home report detailing your home’s history.

How Much Does High-Value Home Insurance Cost?

The average annual cost for high-value home insurance on a property worth $750,000 is around $3,750, putting your monthly premiums around $300.

In addition, home insurance costs vary depending on your personal, unique factors, such as:

  • Your home state
  • Credit history
  • Your home’s age
  • Policy type and coverage
  • Claims history
  • Deductible amount
  • Applicable discounts

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How Much Home Insurance Coverage Do You Need?

One of the biggest struggles every homeowner faces is determining how much home insurance coverage they need to protect their home and its contents.

Learn how to calculate the cost of your home insurance here.

If you know you need high-value home insurance, your agent can help you arrive at a number that makes sense for you, but you can start mulling over what that figure should be by considering these factors:

  • How much would it cost to rebuild your home? We’re not talking about the market value but the rebuilding cost. Whatever the figure is, you need at least that amount in coverage; if your home rebuilding cost is $2 million, thats the baseline you need to insure it.
  • How much would it cost to replace your personal belongings? Creating a home inventory to estimate the value of your personal effects may be useful. Fortunately, you don’t need an exact number, as insurance companies automatically allocate 50-70% of your dwelling coverage to personal effects.
  • What are your liability risks? Do you own a pool, playset, or trampoline? Or do you host parties frequently? If you answered yes to all or many of these factors, you should increase your liability coverage or try an umbrella policy.
  • What do you want from your high-value policy? Everyone is different, so having a high-value home insurance policy is enough for some. In contrast, for others, they may want to start with that and then add on additional coverages until they are satisfied.

Once you can comfortably answer the abovementioned questions, you can begin to assess how much coverage is enough. It also allows you to speak with prospective insurers confidently about what you need so they can match your needs to the correct policy.

If you’re ready to explore your high-value home insurance options, grab a free quote now!

If you Own Your Home, Should You Take Out Home Insurance?

Do you still need home insurance if you were fortunate enough to buy your home outright or have paid off your high-value home? The answer is no; legally, you do not need home insurance. 

However, the answer is more complex. You may not legally need home insurance, but everybody wins when they have a home insurance policy, as it protects them from paying out of pocket for damages. Suppose your home incurs severe structural damage due to a peril that insurance covers; if you do not have home insurance, you have to pay to rebuild and replace all your personal property. That means your annual home insurance fee is a small price to pay should your home require repairs or rebuilding because of a covered peril. 

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The Best High-Value Home Insurance Companies

If you’re looking into home insurance companies that offer high-value plans, you have quite a few insurers that offer these policies. 

These are some of the best high-value home insurance companies that offer valuable add-ons, unsurpassed customer service, attractive perks, and higher coverage limits. They also have high scores with JD Power for customer service and AM Best for financial scores.

  • AIG: Homeowners have high coverage limits for properties valued over $750,000, guaranteed and extended replacement, and complimentary hurricane and wildfire reduction loss consultations.
  • Chubb: Chubb is ideal for high-value homes and assets and is known for cash payout settlements, extended replacement costs, and complimentary hurricane and wildfire reduction loss consultations.
  • Farmers: Farmers is known for their policy perks and offers excellent home insurance for your high-value property.
  • The Hartford: Customers are happy with The Hartford service and its long list of coverage add-ons.
  • Nationwide: Nationwide is known for its high JD Power rating, high coverage limits, extended replacement cost, and it offers flood, wildlife, and earthquake coverage.
  • Openly: Openly offers earthquake insurance, insures properties up to $5 million, has high coverage limits, an array of policy add-ons, and doesn’t exclude dangerous dog breeds or pools without fences.
  • PURE: Insures homes over $1 million, offers guaranteed replacement costs, cash settlement options, and prides itself on customizable policies.
  • Travelers: For homes over $1 million, increased coverage limits, extended replacement costs, cash settlement, short-term coverage for Airbnb hosts, and green home discounts.

Final Thoughts on High-Value Home Insurance

Suppose you have a home with a high net worth, and you’re looking to find a homeowners insurance policy with high coverage limits to protect your property and belongings. In that case, you should consider high-value home insurance. High-value home insurance was made to meet the demands of high-networth individuals. After all, standard home insurance limits aren’t enough unless you buy a lot of add-ons to increase your coverage limits to protect your home and its contents from total loss.

But even if you take out a standard policy and pay extra for add-ons to beef up your coverage, you’ll still miss out on the additional standardized inclusions like loss reduction consultations and policy perks like taking a cash-out settlement if your house has suffered a total loss.

Thus, if you have a home that would cost $750,000 or more to rebuild, you qualify for high-value home insurance and should strongly consider taking one out to safeguard your finances. But make sure you shop around before you take out a high-value home insurance policy to make the most of your investment and coverage.

Claire Smith Claire is a creative entrepreneur with a variety of marketing and content creation skills, including blog and web copy writing, research, and strategy. She has a Masters in Cultural Studies from Queen's University and is known for thinking laterally about marketing, based on her deep knowledge of people and behavior.

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