Insurance for High-Value Homes

June 26, 2024

High-value homeowners insurance offers financial coverage for homes that are more costly than average. Historic properties, homes of architectural significance, and houses with unique features or those constructed from rare or expensive materials are examples of such properties. Condos and luxury apartments can also be designated as high-value. It is essential to understand the importance of adequate coverage for these properties.

What Is High-Value Home Insurance?

High-value home insurance caters specifically to property owners with valuable homes. These policies can offer increased property coverage limits and enhanced protection for the assets and the homeowners. Typically, a high-value home is defined as a property valued above $750,000, although some policies may exclusively cover homes worth $1 million or more. Standard homeowner insurance policies may fall short of adequately covering these homes and their valuable contents, such as antiques, art and jewelry.

What Happens If Your High-Value Home Is Not Properly Insured?

If you don’t have proper coverage for a high-value home, the following risks may arise:

Underinsured losses—If your home sustains damage or needs repairs, insufficient insurance coverage means you’ll have to pay out of pocket.
Risk of defaulting on loans—Without coverage, you’re at higher risk of defaulting on your mortgage if disaster strikes. Paying off the mortgage and rebuilding becomes challenging without insurance support.
Complete loss of home and possessions—Catastrophic events could lead to complete loss of your home and belongings. Rebuilding and replacing everything would be an overwhelming financial burden.

What Does High-Value Home Insurance Cover?

High-value homeowners insurance policies go beyond standard offerings to protect homes with unique features, such as luxurious estates, historic properties and custom-built masterpieces. Policies typically include the following coverage options:

Dwelling coverage
Personal property coverage
Liability protection coverage
Additional living expenses coverage
Extended replacement cost coverage
Umbrella liability insurance

In addition to obtaining comprehensive insurance coverage, homeowners can implement risk mitigation strategies to protect their high-value homes further. These may include installing storm shutters, reinforcing roofs, elevating properties in flood-prone areas and maintaining proper landscaping to reduce the risk of wind damage.