If you have an expensive home, generally more than $750,000, your insurance needs are going to be different than those of a standard homeowner. Since the home is worth more, it’s more expensive to replace or repair. High value home insurance coverage protects a home that is worth more than the average home. Homes of architectural significance, homes with unique features, or historic properties are some examples of homes that require this type of coverage. Luxury apartments and condos can also be designated as high value.
Common Coverage for High Value Homes
Different companies can provide different insurance coverage, but there are certain features that everyone provides.
Liability: These policies include higher liability limits to protect you against damages or injuries that occur on or off your property. Expensive properties usually feature things such as play equipment or swimming pools, which are known as attractive nuisances. The higher liability limits are helpful for any homes that have these items. You may also get coverage that isn’t provided at other places.
Additional Living Expenses: If your home is unlivable due to a covered loss, then you will get living expenses to cover the cost of temporary housing. In some cases, the additional living expenses won’t have limits when it comes to high value home insurance, so you don’t need to face a dramatic change in your lifestyle.
Identity Theft Coverage: This is an important form of insurance to protect you from people stealing your identity and your assets.
Pipe Backup and Sewer Coverage: Many standard home insurance policies don’t include this type of coverage, but high value home insurance companies tend to have this coverage standard.
Partial Loss Coverage: If a covered loss only affects a portion of the home, such as damage to a part of a bathroom, then most policies don’t need to ensure the replacement materials match the original. High value home coverage will typically go a step further and make sure that the replacement materials match the original, even if it means replacing materials that weren’t damaged.
Pair or Set Conditions: If there is a single high value item on your home that is damaged, but it’s part of a set, then the standard insurance doesn’t typically cover the value of the entire set. With high value home coverage, pairs and sets are covered, even if only one of the items is damaged.
How Much Coverage Should You Have for Your High Value Home?
When determining how much coverage you should have for your high value home, one consideration is how much your home and personal property cost to replace. There are a few options available, including replacement cost and actual cash value coverage. If you have a high value home then you want to have a policy that has replacement cost coverage. This will replace the items in your home at full value, instead of factoring in depreciation. This type of coverage is more expensive, but you are better protected in the event of a loss. You may even want to consider extended replacement cost coverage. This pays to replace property up to a certain percentage over the value. This coverage helps with rising labor costs and materials that can make replacement an expensive option. Many insurance companies for high value homes do offer this replacement cost coverage standard.
If you have a high value home then you likely also have high value items in the home. It’s important that your insurance coverage protects these as well. Items such as antique furniture, jewelry, or fine art are only covered up to a certain amount by standard home insurance and this amount is usually too low.