Updated July 16, 2021
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High-value home insurance is a policy with higher policy limits to match the increased value of luxury and high-end homes.
A standard home insurance policy is generally sufficient protection for most homeowners. But for luxury homeowners who have a high net worth, it may not be enough.
If you own a high-value home, you need to know how to protect your investment. High-value home insurance usually has higher policy limits for more protection in the event of a covered loss.
High-value homeowners insurance is an insurance policy that protects high-value homes. A high-value home is typically one that has a replacement cost value of $750,000 or more.
Keep in mind that the replacement cost is not the same as the home’s market price or what you paid for it. Replacement cost is based on the rebuild cost of the house. It includes the entire cost of rebuilding—foundation, exterior construction, flooring, cabinetry, roofing, built-in appliances, and more.
High-value homeowners insurance policies cover many of the same things as a standard homeowners insurance policy:
Dwelling coverage for the structure of your home
Other structures coverage for detached garages, fences, and other structures
Personal property coverage for your furniture, clothing, electronics, and other items
Loss of use for reimbursement of additional living expenses if your home is uninhabitable after a covered loss
Personal liability coverage for lawsuit protection if someone injures themselves in your home
Medical payments to cover medical bills from less severe injuries
However, standard policies don’t usually meet the unique coverage needs of luxury homeowners, leaving gaps in their protection.
Here’s what you can expect with a typical high-value home insurance policy.
Homeowners insurance pays for damage to your house under what’s called “ dwelling coverage.” It covers the physical structure of your home if a covered hazard—such as a fire, windstorm, or vandalism—damages it.
However, policy limits are in place that cap the amount the home insurance company will pay, and a standard homeowners policy may not be enough.
With a high-value policy, you’ll benefit from increased dwelling coverage. The higher limit can give you the peace of mind of knowing you have the protection you need.
Not only do high-value insurance policies have better dwelling coverage, but they also have higher coverage limits for your personal belongings.
Many standard homeowners insurance policies default to actual cash value (ACV) coverage. With ACV, the insurer subtracts depreciation from the value of your items if you file an insurance claim. That means you get a smaller claim check from the insurance company.
However, high-value policies typically default to replacement cost coverage. Using replacement cost, your insurer will compensate you for your items at current market prices after a loss.
For example, if you lost a five-year-old golf cart in a fire, your reimbursement from an ACV policy would be equal to the value of a five-year-old golf cart. But replacement cost coverage is more likely to reimburse you the total price of a new one.
Standard homeowners insurance has limitations on what it will cover. For example, it won’t typically pay for damage from a water or sewer backup unless you purchase an endorsement.
But a high-net-worth home insurance policy can offer coverages that standard policies don’t include, such as:
Water and drain backup coverage
Business property coverage
Identity theft coverage
Higher limits for loss assessment (for condo and co-op owners)
Your policy may include these additional coverages at no extra cost.
The old saying “you get what you pay for” is true in some cases. You pay higher premiums for luxury home insurance, but you get a better policy and perks you won’t typically find with standard homeowners insurance companies.
The benefits vary from one insurance provider to the next but can include:
Coverage from hurricanes, tornadoes, wildfire, and other natural disasters
Free home appraisals
Deductible waivers for significant claims
Loss mitigation consulting
The option of a cash payout instead of replacing your home and belongings after a total loss
A high-net-worth home insurance policy may also come with a dedicated customer service agent. They can file claims for you, schedule appraisals, hire contractors, and more.
High-value homeowners coverage is an excellent option for houses, condos, rental homes, and personal property with a higher-than-average replacement or construction value.
How do you know if it’s right for you? Generally, if you own a home that would cost at least $750,000 to replace, you should get high-end home insurance —but other criteria are also important:
The home value is at least $750,000
There are unique features and design elements
It’s a heritage home
The home has expensive or unique fixtures
You own fine art, jewelry, rugs, wine, and other specialty items
Your insurance coverage should be enough to rebuild and replace your home and belongings if disaster strikes. For example, if fully rebuilding your home to its original condition would cost $1.2 million, then you should buy at least $1.2 million in dwelling coverage.
Personal property coverage is typically 10 percent of your dwelling coverage limit, according to the National Association of Insurance Commissioners (NAIC).
Some insurance policies for high-value homes will have higher policy limits, so check with your insurer to make sure you have enough coverage.
The value of your overall assets is another factor in your insurance needs. If someone injures themselves in your home, they could file a lawsuit for medical costs.
Your homeowners policy includes personal liability protection—but there’s a cap on coverage.
If you’re found liable and the settlement is for more than your policy limit, you may be forced to sell your house or liquidate retirement accounts and other assets.
High-net-worth individuals are especially vulnerable to personal liability lawsuits, but an umbrella policy is an insurance product that can give you excess liability —increasing your liability limits to as much as $100 million or more.
Using a home insurance comparison tool is a quick and simple way to shop for standard homeowners insurance. However, comparison sites don’t typically cater to high-end homeowners.
To get the best protection for your home, consider these top high-value homeowners insurance options:
Chubb ’s Masterpiece policy
AIG ’s Private Client coverage
PURE’s high-value homeowners policy
Travelers high-end homeowners coverage
Nationwide Private Client coverage
Insurance providers offer different coverage options and benefits. It’s best to explore multiple quotes from more than one insurance company to discover which is best for you.
A high-value home is typically one that has a value of more than $750,000. A high-value home may also have unique design elements or be classified as a heritage home. Because of the high value of these homes, standard homeowners insurance may not provide enough coverage.
The amount of insurance you need is based on the home's rebuild cost. This cost is different from market value and might be more or less than what you paid for the house originally. Your insurance policy should cover at least enough to restore the home to its original condition after a covered loss. You must also consider the value of your possessions and other assets to ensure you're fully protected.
Several companies insure high-end homes. A few insurance companies include Chubb, AIG, PURE, Travelers, and Nationwide. If you're shopping for a high-value homeowners insurance policy, review the policy options and coverage limits to ensure it’s enough to protect you from a total loss.
Getting a home insurance quote is a straightforward process. Many homeowners insurance companies offer free quotes online or by phone. You will generally need information such as your name, address, and date of birth, as well as the home’s square footage, construction materials, and unique features.
If you own a high-value home, you’ll likely need more than standard homeowners insurance coverage. High-end homeowners insurance companies offer increased coverage, benefits, and perks to protect your high-net-worth home.
Keep in mind that the more assets you own, the more protection you need. If you are a high-net-worth individual with high-value property, getting the right amount of insurance coverage after you compare home insurance is crucial.
Amy is a personal finance and technology writer. With a background in the legal field and a bachelor's degree from Ferris State University, she has a talent for transforming complex topics into content that’s easy to understand. Connect with Amy on LinkedIn.Learn More