Insurance For High-Value Homes (2024)

For homeowners who maintain luxury homes and have high net worth, the typically best homeowners insurance policy is likely not sufficient. High-value home insurance is designed specifically for these property owners.

The policies offer higher property coverage limits and better protection for assets and their owners.

What is a High-Value Home Insurance?

A high-value home is typically categorized as a home with a value above $750,000, but some policies may only cover homes worth $1 million and up.

For homes of this value, a standard homeowner insurance policy may not provide enough coverage for the home and the contents within, such as antiques, art and jewelry. While home insurance companies offer endorsem*nts that can fill in coverage gaps, people with high-value homes could still be left significantly underinsured.

A high-value home insurance policy can address the coverage concerns of high net worth households that have unique coverage needs. Options include:

• AIG’s Private Client policy
• Chubb’s Masterpiece policy
• Cincinnati’s Executive Capstone policy
• Kingstone’s high-value homeowners policy
• PURE’s high-value homeowners policy
• Travelers’ high-value homeowners policy

Increased Coverage Limits Under a High-Value Home Insurance Policy

Here’s how high-value home insurance policies are typically different from standard policies.

Better Dwelling Coverage

Homeowners insurance policies pay for damage to your house (dwelling coverage) and possessions (contents coverage). With a standard policy, your dwelling is insured for a specific amount, which is listed on your policy’s declaration page.

High-value home policies will often go above and beyond a standard policy by offering extended replacement cost coverage for your dwelling and other structures. This feature gives you reimbursem*nt for house repairs that are above the amount listed on the policy. This can be important if local material and building costs rise after a disaster such as a tornado.

There may also be a “cash out” option in a high-value home insurance policy. If your home has been destroyed, this lets you take the insurance check and build elsewhere.

Better Contents Coverage

Getting enough insurance for possessions is often of special concern to owners of luxury homes, which are filled with expensive personal items.

For example, a Kingstone Insurance high-value home policy in New York will provide better coverage for possessions with:

• Higher levels of contents coverage
• Blanket jewelry coverage up to $150,000 (limit of $10,000 per item)
• $25,000 in coverage for the breakage of antiques, fine art and collectibles

Here are other ways high-value home policies up the ante in contents coverage.

“All risks” coverage for contents: A standard home insurance policy covers your dwelling for all risks (meaning anything not specifically excluded, such as earthquakes) but your contents have protection from 16 “named perils” such as fire and lightning. A high-value home policy, on the other hand, will insure contents for all risks.

Replacement cost: You can generally choose to insure your possessions under “actual cash value” or “replacement cost” coverage with a standard policy. Replacement cost coverage is better because it reimburses you for new items to replace the damaged ones—such as a new bedroom furniture set. Actual cash value would give you only the depreciated value of the furniture, which leaves you short when you want to buy new items.

High-value home insurance policies generally include replacement cost automatically. They also typically provide higher coverage limits for valuable items such as jewelry.

Pairs and sets: Having damage to one item in a pair or set can cause a problem when there’s no exact replacement available. High-value homeowners insurance typically pays to replace the entire pair or set.

Related: How to Insure Jewelry?

Better Liability Coverage

Generous liability coverage is important to anyone with significant assets because you have a lot to potentially lose in a lawsuit. You can also be an attractive target for lawsuits.

High-value home insurance policies provide liability coverage, just like a standard policy, and you can choose a coverage limit. But they may also provide for your legal defense costs outside of the liability limit. That leaves more coverage to actually pay for legal judgments and settlements.

Liability insurance under these policies can also provide personal injury coverage (for libel, slander and defamation) which otherwise is typically only available through an umbrella insurance policy.

Speaking of umbrella insurance, you can access high amounts of excess liability coverage with a high value homeowners insurance policy, such as $50 million (Chubb) or $100 million (AIG).

Additional Increased Coverage

You can also expect a high-value home insurance policy to go beyond a standard policy by providing:

• Automatic coverage for sewer backup
• Increased coverage limits for replacing shrubs and trees
• $1,000 for removing each fallen tree as opposed to the standard $500
• Better medical payments limits, such as $10,000 rather than the standard $1,000. Medical payments coverage pays for others’ injuries no matter who was at fault, such as a visitor who falls on your front steps
• Credit card, forgery and counterfeit money coverage of $10,000 as opposed to the $500 limit in a standard home insurance policy

Flood insurance. Standard homeowners insurance policies don’t include flood insurance. Homeowners can buy a policy through the National Flood Insurance Program (NFIP). Since NFIP policies don’t offer nearly enough coverage for a luxury property, flood insurance may be provided by a high-value homeowners policy.

Vacation and second homes. You may be able to customize a high-value home insurance policy to include other properties such as vacation homes.

Kidnap ransom and extortion: You can find personal kidnap ransom and extortion coverage from AIG and Chubb. With Chubb, for example, this includes coverage for ransom money, a reward for information leading to the arrest and conviction of the perpetrator, and the services of a crisis management firm to handle negotiations and delivering ransom funds. Chubb will cover $100,000 for kidnap expenses and $25,000 for a reward.

Deductible waivers. Some high-value home insurance policies offer a deductible waiver for large losses. You won’t have to pay a deductible on a claim if the damage exceeds a certain amount, such as $50,000.

Complimentary home appraisal. You’ll generally need an appraisal in order to buy a high-value home policy. The insurance company may pay the cost or split it with you.

Risk management services. Your insurer may offer consultations and services that can reduce your loss if disaster strikes. For example, Chubb’s wildfire defense service, for homeowners in wildfire-prone areas, can offer an on-site assessment of wildfire risk and send professional firefighters to the home to take preventative actions and keep you updated on the status of your property.