Should I Consider a High-Value Home Insurance Policy?

Should I Consider a High-Value Home Insurance Policy?

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High-value home insurance isn't a single product; it's a collection of extra services and offerings available to people with high-value homes or an otherwise significant amount of assets.

High-value home insurance usually has larger limits and more hands-on service than a standard insurance policy. But generally, homeowners only qualify for this type of coverage if their home's value exceeds $750,000.

What's included in high-value homeowners insurance?

There are three main ways in which a high-value home insurance policy can benefit you: higher coverage limits, additional benefits and services, and an overall higher level of expertise and care.

Expanded policy coverages and limits

The most important and most common benefit of opting for high-value home insurance is expanded coverage limits, both for your property as a whole and individual items. Expanded coverage limits are especially common for contents subject to specific limits, like jewelry, art and cash. For example, a typical homeowners insurance policy might have an overall policy limit of $1 million and a limit on individual jewelry items of $1,000.

While most homeowners insurance companies will sell you an endorsement for a luxury home with a high replacement cost or an expensive item like an engagement ring, high-worth insurance policies will include higher limits without any special endorsements required. They also often provide extra endorsements for natural disasters, such as flooding and earthquakes. This makes them worth considering for owners of high-value homes in states like Florida and California.

Expanded limits available for high-value home insurance

  • Structure coverage
  • Second home coverage
  • Sewer and drain backup coverage
  • Home contents covered for all perils
  • Scheduled items like jewelry, firearms, currency and art
  • Additional living expenses
  • Landscaping coverage
  • Liability coverage

Home insurance for high-net-worth individuals also often includes a number of other high limits, such as guaranteed replacement cost coverage. Guaranteed replacement cost is like replacement cost value (RCV) coverage taken a step further: it pays for the full cost to repair or replace your high-value property, even if doing so would exceed your policy limits.

The most common scenario where guaranteed replacement cost comes into play is after a total loss due to a widespread disaster like a wildfire. In this case, the cost of both labor and materials is likely to go up due to high demand, making it possible that you would exceed your limits, but if you have guaranteed replacement cost, you won't be responsible for the extra cost.

Additional benefits and services

In addition to higher limits, many high-value and luxury home insurance providers offer specialized services and benefits that aren't available at a regular insurance company. These services vary somewhat by insurance provider, so it's a good idea to take a look at several insurance companies to see which ones offer a particular benefit you need.

For example, Chubb has consultants who can help you assess and minimize the risks your home is subject to. And Pure Insurance offers a loss-prevention benefit that can pay to minimize repeat occurrences of things like flooding.

  • Identity fraud and cyber ransom coverage: pays for costs associated with having your identity stolen, as well as online ransom — where a hacker encrypts your computer's data and forces you to pay to recover it.
  • Cash settlement: in the event of a total loss, a cash settlement option means you can use the money you receive however you want, not just to rebuild your house.
  • Risk consulting/home inspection: high-end insurance companies typically do an onsite inspection at your home, helping you select the right level of coverage, as well as provide ways for you to mitigate risk. This might include recommending wind shutters in coastal areas or clearing brush away in places at risk of fire.
  • Deductible waiver: if you have a deductible waiver and experience a large-scale loss, you won't have to pay your deductible.
  • Loss-prevention benefit: pays to help prevent a covered loss from recurring in the future, such as a leak detection system or power generator.

Extra expertise and customer care

Another key benefit of buying high-end home insurance is that you'll likely receive more attentive, customized service than you likely would from a mainstream insurer. There's no single specific way this manifests, but you can generally expect a higher level of care overall.

For instance, if your home is uninhabitable due to a fire and you have additional living expenses coverage, your insurer might book you a room at a hotel that's within driving distance of your children's school and pay for the hotel room directly. This saves you the time and effort of having to book the room yourself, in addition to the work of filing for reimbursement.

Additionally, high-value home insurance companies are generally more experienced with high-end homes and furnishings. While it's hard to put a dollar value on this knowledge, there's a benefit to dealing with an insurer who is comfortable and knowledgeable about dealing with high-end materials and can appraise and care for things like original artworks or wine collections.

Most high-end insurance companies work primarily through independent brokers, meaning you'll have a single point of contact to deal with.

Related high-value insurance policies

Many companies that offer insurance for high-value homes also provide related insurance coverages that are relevant to their customers. Some of these, like umbrella insurance, simply extend specific coverages that are often provided as part of home insurance. Others are totally separate policies, like boat insurance. But all of these policies are similarly geared toward the needs and service expectations of high-net-worth individuals.

Other insurance products for high-net-worth people

  • Second home insurance
  • Luxury/vintage car insurance
  • Boat insurance
  • Valuables insurance
  • Umbrella insurance
  • Travel insurance

Which companies offer high-value home insurance? How do they compare?

Compared to the hundreds of companies that offer standard homeowners insurance policies, there are relatively few companies that provide specialized luxury home coverage for high-net-worth people. Note that most insurance companies for high-net-worth people work primarily through independent agents or brokers. You generally can't get an online quote for high-value home insurance.

We were very impressed with the ratings and reviews of the high-end home insurance carriers we looked at. They all had very strong complaint ratings from the National Association of Insurance Commissioners, which means that they received a lower number of complaints than a typical insurance company. They all also had financial strength ratings of A- or better, which means that the company is likely to be able to pay out insurance claims irrespective of economic or other conditions.

High-value home insurance companies

Insurer
AM Best Financial Strength Rating
NAIC Complaint Rating (lower is better)
ChubbA++0.24
Pure InsuranceA0.07
AIG Private ClientA0.09
Nationwide Private ClientA+0.72
Vault InsuranceA-N/A

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