What’s high-value home insurance?

Key points

  • You may need high-value home insurance if your house would cost $1 million or more to rebuild from the ground up.
  • Insuring your house with high-value home insurance means that you’ll have the resources to repair and replace your house’s features and contents.
  • High-value home insurance offers higher property coverage limits and better protection for your assets.

A high-value home insurance policy can address the coverage concerns of high-net-worth households and ensure owners are not left underinsured in the event of a loss or liability lawsuit. 

What is a high-value home?

Whether or not your home needs high-value home insurance isn’t necessarily based on what you paid for it. “It’s not the value of the home but rather the replacement value,” said Loretta Worters, vice president of media relations for the Insurance Information Institute. “In other words, how much would it cost to replace your home?”

Generally, homes that would cost $1 million or more to rebuild should be covered with a high-value home insurance policy.

How much dwelling coverage you need — the part of your home insurance policy that pays to rebuild the structure of your house and its attached structures — depends on how much it would cost to rebuild your home from the ground up to get it back to its prior state.

Worters noted that inflation, labor shortages and supply chain issues have driven up rebuild costs in recent years. And it might be especially difficult and expensive to replace custom fixtures or to find a qualified contractor to work on a historically significant house. That’s where high-value home insurance comes in.

What is high-value home insurance?

High-value home insurance is a homeowners policy with higher coverage limits to replace and repair items and features with higher price tags. High-value homes are also more likely to have high-value contents that need expanded coverage.

“The most important and common benefit of opting for high-value home insurance is that expanded coverage, both for your property as a whole and for individual items,” Worters explained. “Rare or expensive items like jewelry, art and other collectibles will also require higher coverage limits.”

Most high-value home insurance policies also offer higher liability limits to protect you if you’re sued — such as if someone falls on your icy sidewalk or if your dog bites someone at the neighborhood park.

“These policies will also include higher limits without any special endorsements required, including things like sewer back-up and landscaping coverage,” Worters noted.

How does high-value home insurance work?

Filing a high-value home insurance claim looks a lot like filing a standard homeowners insurance claim — the difference is the coverage amount. High-value home insurance allows for larger payouts to enable you to make the expensive repairs needed to restore your home after a natural disaster or theft.

“There are companies that provide special services or connect you with experts,” Worters said. “For example, a lot of high-end homes have special moldings, so they will connect you with artesans to recreate some of those architectural details if your home has been damaged.”

How much does it cost?

Much like a luxury home versus an average home, high-value home insurance costs quite a bit more. “It’s more expensive than a standard homeowners policy, maybe 20% more,” Worters explained. “It really depends so much on the size of the house and if you have wine or art collections,” among other factors.

However, you might be able to lower the cost by taking certain actions. Here are a few tips to potentially lower your rate:

  • You may qualify for a green-home discount if your home is LEED-certified.
  • You may get a discount if you haven’t filed a claim in the past few years.
  • You could qualify for a lower rate if you take steps to weatherproof your home against natural disasters common to your area. 
  • You can usually lower your premium by increasing your deductible or bundling home and auto insurance.

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