High-Value Home Insurance

While basic home insurance covers most homes, those with properties valued at $750,000 or more require high-value home insurance.

The Facts about High Value Home Insurance

Before you know if high-value home insurance is right for you it’s important to assess your home’s true value. It might surprise you to know that it isn’t just the purchase price or the value of the land your home is on that determines its value.

As with traditional home insurance, the value of your home is determined by the amount of money it would cost to rebuild it and restore it to its prior condition. This is what is known as the “replacement cost” and it includes both the interior and exterior of the home.

High-Value Home Insurance Coverage Differences

Many things differentiate high-value home insurance from traditional insurance.

  • Coverage limits are considerably higher than a standard policy
  • Provides more coverage for your home and your belongings
  • Increased limits may include the items you have carefully collected over the years like jewelry, fine arts, wine, antiques, automobile collections, and other valuables
  • Additional items covered include:

    • Valuables
    • Liability coverage
    • Landscaping coverage
    • Guaranteed replacement cost coverage
    • Unlimited coverage of living expenses should you need to temporarily leave

Increased Protection for Your Valuables

Broader and more inclusive protection for your luxury items is provided through both itemized and blanket coverage in HIGH VALUE HOME INSURANCE policies.

  • Blanket Coverage: Provides protection up to a specific dollar amount per item with the ability to increase that amount for things like jewelry and fine arts.
  • New Purchases: New valuables can be covered for a specific period of time after purchase within certain limits.
  • Valuation: Provides coverage for the value of the item and may cover an increasedpercentage of the itemized valuable amount if its market price is higher than its agreed value.
  • Consigned, borrowed, or loaned jewelry or fine arts: If you are in receipt of a valuable item through consignment, loan, or borrowing, that item can be covered for a specific time period and coverage amount.
  • Reduced rates for safe storage: When you keep your valuables safe by storing them in a bank vault, home safe, or safety deposit box, it can lower your coverage rates for those items.
  • Fine Arts Repairs: Provides protection if you have a piece of fine art that needs repair or restoration, and damage occurs during that process.
  • Value Protection: Can cover the difference between the value of an item before a loss and its post-loss restored value.

What is a High-Value Home Insurance

After an application is filed for high-value home insurance your home will be inspected by the insurance company. This is done to determine the replacement cost as well as the amount of coverage you will need. This inspection will determine if you qualify for high-value home insurance.

Several things determine if you own a high-value home.

  1. Your home is worth $750,000 or more
  2. An architect designed your home or it is a historic home
  3. You have a green home that uses technology and other features for sustainability
  4. You have valuables in your home like jewelry, art, furs, coins, and things of that nature
  5. Your home has high-end appliances
  6. Your home has a guest house, pool, or backyard fixtures

Determining Coverage Needs

When a home is damaged or destroyed the insurance policy provides you for losses in one of two ways depending on the type of policy you have.

  • Actual Cash Value (ACV) provides a payout for the loss of your home minus its depreciation.
  • Replacement Cost Value (RCV) provides a payout for the full cost to rebuild your home to its prior condition.

When it comes to high-value home insurance it is better to have RCV coverage. While it costs more upfront you will get significantly more coverage. This means you will pay less out of pocket if you file a claim. With ACV coverage your payout will most likely not be enough to cover the entire cost of the damage to your home and you will have larger out-of-pocket expenses.

Another thing to consider when determining your coverage needs is if your home contains valuables that exceed coverage limits, like collections or antiques. If it does it may be necessary for you to purchase a scheduled personal property endorsement.

Things to Consider Before Getting High-Value Home Insurance

With high-value home insurance there is more to consider than with a traditional policy.

  • High-value home insurance policies cost more than standard policies
  • High-value home insurance provides more coverage than standard policies and includes add-ons, such as:
    • Free home inspections,
    • Guaranteed replacement cost coverage, and
    • Unlimited additional living expenses, to name a few.
  • Customer service for high-value home insurance can be higher in quality as well

Additional Coverage Needs

When purchasing luxury home insurance, you are given the option to select different types of add-on coverage which helps to create truly customized coverage.

Some add-on coverage types available include:

  • Identity Theft Coverage - will monitor your personal accounts for suspicious activity and helps pay for identity restoration services if your information is stolen.
  • Water Backup Coverage - pays for sewer and sump pump issues.
  • Loss Assessment Coverage - covers HOA loss assessments and will pay your portion.
  • Family Protection Coverage - protects family members and reimburses expenses in the event of hijacking, abduction or stalking.
  • Business Property Coverage - covers work items stored in the home.
  • Computers coverage - includes higher limits for computers in the event of a loss.

In Summary

Here are the key take-aways if you are considering high-value home insurance

  1. Your home is worth $750,000+
  2. High-value home insurance provides higher coverage limits to protect valuable assets
  3. High-value home insurance is more expensive than traditional insurance but provides more coverage and extras

If you live in an ultra-expensive home you will benefit from a high-value home insurance policy because it offers higher coverage limits, unlimited additional living expenses coverage, and numerous add-on coverages. Insurance carriers that offer high-value home insurance usually provide a higher level of customer service. However, it’s important to remember that while you will pay a premium for this coverage and its “extras”, you may be able to save a considerable amount of money should you ever need to file a claim.

At Lofton-Wells Insurance, we have the skill and experience to guide you in obtaining coverage for your luxury home. We go beyond your needs and expectations to protect every branch of your life. In doing this we can provide the highest quality and most appropriate coverage for our clients. Contact us today at 901.388.7283 or fill out the form below!


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