What High-Value Home Insurance Covers
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.
Better Dwelling Coverage
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.
Higher Coverage Limits
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.
Additional Coverages for High-Value Homes
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.