First let’s talk about what is considered high-value. Typically this means homes with an appraised value of $800 000 and up. However this description can be broadened to include homes with specialized building materials unique architectural features technology location land value or other outstanding features that set it apart from other homes. Understanding the value of these features and knowing how to evaluate adequate coverage can be tricky. Thankfully there are insurers who specialize in recognizing and protecting these extraordinary assets.
Why does a high-value home need specialty insurance?
A high-value home may need specialty insurance for a few reasons:
- It is more expensive to rebuild due to high quality finishes architecture et cetera
- It has more valuable contents including artwork wine jewelry technology and more
- It may be left vacant for periods of time
- It may have foreign ownership
- It may be a heritage or historic home
- It may have particular risks such as pools and holding events
Benefits of High-Value Home Insurance
Unlike more ‘basic’ home insurance options high-value policies can be extensively customized to fit your needs. They also tend to offer far more protection. However most of these kinds of policies have some key features in common which will help make sure your home isn’t under-insured:
- Guaranteed replacement cost clauses – This is maybe the key feature for people who own homes with rare or unique design features building materials craftsmanship and furnishings. In the event of severe damage or loss of all or part of the property insurers put no limit on the cost of repairs or replacements.
- Comprehensive coverage – Specialized high-value home insurance is unusually comprehensive; it usually cover ‘all risks’ instead of a list of specific ‘perils’ and extends coverage to other locations where high-value items from the home may be taken such as to university or holiday homes.
- Cash-out options – In the event of total loss those with specialized high-value home insurance are usually not obligated to rebuild the home. Instead they can take the option of a cash settlement.
- Free expert appraisal – It is in the interests of both insured and insurers that high-value homes and their contents are accurately valued. Homeowners can usually expect the providers of their high-end policy to hire expert appraisers at no cost to themselves.
- Rebuilding to code – If your high-value home must be rebuilt it will be upgraded to meet existing bylaws and codes at no additional cost to you.
- Mechanical breakdown coverage – if your home’s systems break down due to a mechanical or electrical failure the repairs or replacement can be covered
- Extended coverage for identity theft and personal liability
- Priority customer service – Providers of high-end home insurance will always try to ensure a level of personalized customer service that isn’t available to holders of ‘regular’ policies
In addition to these key features high-value policies will also offer a range of additional options such as:
- Extended personal liability coverage for clients who frequently entertain or have domestic staff.
- Coverage for the loss of expensive food and drink items.
- Extended coverage for jewelry art or wine collections.
- Extended coverage for silverware gold ware and pewter ware.
- Extended coverage for gardening equipment lawns and plants.
- Extended coverage for complex electrical or mechanical systems in your home
What homes qualify for high-value home insurance?
The following homes may qualify for high-value home insurance?
- A home with an estimated value of $1 000 000 or more
- A heritage or historic home
- A higher value home is left vacant for a period of time
- A higher value home is used as a short-term rental property
- The home has unique construction (such as a log home)
Different insurance companies have different definition of a high-value home. Talk to your broker for more information.