As a rule of thumb, homes that are valued at $750,000 and up may get high-value home insurance. If there are several personal properties in your home that comes with a higher value, you may also choose to go with this type of policy. This type of insurance offers a larger limit on claims, better benefits, and it also provides a more personalized service for the insured. Find out more about the high-value homeowners insurance in this article.
Table of Contents
- 1 What is High-Value Homeowners Insurance?
- 2 What makes a High-Value Homeowners Insurance different from a standard Homeowners Insurance policy?
- 3 Disadvantages of High-Value Homeowners Insurance
- 4 Should I get High-Value Homeowners Insurance?
What is High-Value Homeowners Insurance?
High-value homeowners insurance is recommended for homes and properties that have a high value. It is best for homes with a value of $750,000 to $1,000,000 and up. However, there are some insurance companies that offer this policy to homes with a slightly lower value.
This type of insurance policy prevents homes from being underinsured. According to research, 40% of homes that have high value are deemed to be underinsured. If a home is underinsured, the coverage may not be enough to build another home of the same quality when a total loss occurs.
A standard homeowners policy has a limit on the repair and replacement value that they offer. On the contrary, high-value homeowners insurance policy will work to cover for the full cost of restoring the home to its original value. This type of insurance isn’t limited to residential properties, but it also extends to commercial properties.
What makes a High-Value Homeowners Insurance different from a standard Homeowners Insurance policy?
There are three major differences between both types of insurance. A high-value homeowners insurance policy has a larger limit, VIP services, and better benefits.
1. Larger Insurance Limit
For a standard insurance policy, the coverage will likely cover for repair or replacement cost in case of a total loss. In terms of claim limitations, the limit of liability protection is usually set at $100,000. If an accident happens in your property and the bills pile up, your standard homeowners insurance would most likely not be enough to cover for it. Coverage for personal properties is also limited to a certain price. If you own expensive items, the original value may not be fully compensated. If you plan on getting a higher coverage, it is best to get an umbrella policy.
Choosing high-value insurance provides more protection against losses. The limits are larger in terms of structural and personal property damage. This would be enough to cover for the original value of both. Moreover, the limit for liability protection is also higher with this type of insurance policy. On top of that, the limit for individual items is also larger if you opt for high-value homeowners insurance. This way, even your luxury items are well protected in case of accidental and sudden losses.
2. Personalized Services
Since you are paying for a higher premium, you are also expected to receive highly specialized services. Compared to standard insurance, the services offered to clients with high-value insurance policies are more personal and direct. If they file a claim, they are given a higher priority compared to standard policyholders. They are also given preferential treatment for all the other services offered by the insurance company. Some insurance companies also provide free risk assessment services for clients that are covered with high-value homeowners insurance.
3. Additional Benefits
Standard policy owners have access to several benefits offered by the insurance company. However, high-value insurance policyholders are usually offered higher benefits. Case in point, the temporary living expense benefit of standard policyholders is relatively lower and they cover a shorter period. Apart from this, there are some benefits that are offered to high-value insurance policyholders that aren’t offered to standard policy owners.
Disadvantages of High-Value Homeowners Insurance
While high-value homeowners insurance may seem like a bed of roses, you would have to understand that you will be paying an arm and a leg for your insurance coverage. Despite widening the coverage, there is still a limit to this type of policy and it may not be enough to cover for all your losses. There are still exclusions to this type of insurance and it is important to go through your contract. This will help you understand if you need to add an umbrella policy to your current insurance policy.
Should I get High-Value Homeowners Insurance?
If your property is worth $750,000 and up, we advise that you consider it. A standard insurance policy wouldn’t cover for this loss. The rebuilding cost is highly likely to burn a hole in your pocket, which is why it is important to obtain maximum coverage when you are buying insurance for your expensive property. This will also help ensure that your property is never underinsured as this will provide the most comprehensive insurance package available for your property.