What Is High-Value Home Insurance?

Definition & Examples of High-Value Home Insurance

Family in backyard of a high-value home

 Klaus Vedfelt / Digital Vision / Getty Images

High-value home insurance refers to specialized homeowners insurance available for houses valued at $750,000 or more.

Learn how high-value home insurance works through an example, what it covers, and whether you need such a policy.

What Is High-Value Home Insurance?

High-value home insurance is a type of homeowners insurance that is specifically designed for high-value homes, typically defined as property worth $750,000 or more. Such property might include heritage homes or homes with special architectural or interior design elements. It's one of the most comprehensive insurance packages available, generally providing better quality coverage than a standard homeowners insurance policy.

High-end home insurance isn't limited to houses. Coverage can be bought for high-value condos as well.

How High-Value Home Insurance Works

A standard homeowners insurance policy typically pays for the cost to repair or rebuild the structure of your home if it's damaged, replace the possessions within it if they're taken or destroyed (usually after depreciation is applied), fund lawsuits due to bodily harm or property damage to others, and cover additional living expenses for living away from home while your home is being repaired or rebuilt.

But if you don't have an average-price home or possessions or live an average lifestyle, standard insurance that provides "average coverage" likely won't be enough to protect or replace your property if you file a claim. To ensure that your policy limits are high enough to avoid out-of-pocket costs, consider high-value home insurance.

High-value home insurance generally provides all the coverage offered by a standard home insurance policy but with higher limits and additional coverage for the unique needs of homeowners with pricier properties.

For example, let's say that John and Jane are next-door neighbors. Both have high-end homes with period features including ornate wall carvings. Both homes are valued at $750,000. But John has standard homeowners insurance with a structural coverage limit of that same amount. Jane has a high-value home insurance policy featuring built-in guaranteed replacement cost coverage.

A major fire occurs in the neighborhood, and both John and Jane's homes have to be rebuilt. Because the homes have features and materials that are hard to replace, the actual cost to rebuild each is $850,000. John's policy doesn't cover more than the structural coverage limit, leaving him $100,000 in the hole after the restoration. In contrast, Jane's policy has guaranteed replacement cost coverage, so her policy would cover the full cost of work even if it exceeds the coverage limit.

What Does High-Value Home Insurance Cover?

The most common reason for opting into high-end home insurance is expanded coverage limits compared to standard homeowners insurance policies, though coverage can include additional benefits and services.

Compared to standard home insurance, a high-end policy include larger policy limits or enhanced coverage for:

  • Structural repair or replacement: Structural coverage for standard homeowners insurance may be limited to the cost to rebuild the home. If you think the actual cost of rebuilding will be higher, you'll need to get extended or guaranteed replacement cost coverage. In contrast, many high-value home insurance policies include extended or guaranteed replacement cost coverage, allowing you to rebuild your home to its original condition even if the cost of doing so exceeds your coverage limit.

The guaranteed replacement cost option covers the full cost of rebuilding the property, no matter how much it exceeds the coverage limit, whereas extended replacement cost is a more limited option that covers expenses exceeding the coverage limit by up to a certain percentage.

  • Possessions: High-value home insurance from insurers like Travelers and Harris Insurance generally afford higher limits for items like money, jewelry, coin collections, or business property at home.  Plus, with a standard policy, it often costs 10% more to insure your personal belongings at the replacement cost (the cost to replace them) versus the actual cash value (which pays out less for older items than you paid for them). High-value home insurance generally insures your belongings at the replacement cost.
  • Liability: High-value policies often include higher limits for personal liability, medical payments, and loss assessments, as well as slander, libel, and defamation.
  • Additional living expenses: You'll often enjoy increased coverage limits for living expenses you incur while waiting for a restoration, such as accommodation, meals, or laundry.

Some high-value home insurance policies also provide coverage that is not typically offered by standard homeowners insurance policies, including coverage for food spoilage, lock replacements if your keys are stolen, identity theft protection, kidnap or ransom, and legal defense fees beyond the policy limit.

Having coverage for additional living expenses while your home is being repaired or rebuilt is valuable. Standard home insurance often has restrictions on these costs. But many high-end home insurance policies have robust coverage that allows you to live in a place that is up to your standard of living and find the time to hire the right architects and professionals to restore your home just as it was before.

Do I Need High-Value Home Insurance?

Not every dwelling needs high-end home insurance. This type of coverage is specifically designed for houses that have an above-average reconstruction value or items with a high replacement value.

Consider high-value home insurance if:

  • Your home is worth $750,000 or more.
  • Your home is a heritage home or has older construction features not found in common construction methods or practices.
  • Your home has unique architectural features or uses construction materials that are hard to replace—for example, a green home.
  • You own expensive or priceless fine arts, rugs, collections, jewelry, wine, or other special items that are kept at home.
  • You chose highly-priced appliances, fixtures, or decorations to put in your home that are not found at standard stores.
  • The interior and exterior design features on your property are unique, such as luxurious outdoor living areas, guest houses, swimming pool areas, special landscaping, or bespoke features that were selected by an interior designer.

How Much Does High-Value Home Insurance Cost?

High-end homeowners insurance policies are usually more expensive than standard homeowners insurance policies because of their increased coverage limits and top-of-the-line personalized experience. This means that owners of high-value homes need to budget for more than the $1,211 in average annual premiums that American homeowners paid for standard home insurance in 2017 (when the latest available data was collected by the Insurance Information Institute.)

However, there are several ways to minimize your insurance costs:

  • Get multiple quotes: Shop around with the major insurers in your state to get the best rate.
  • Choose a high a deductible: The insurance deductible is the amount you pay before your insurance coverage kicks in.
  • Bundle your homeowners and auto insurance: Obtaining both policies from the same insurer can save you anywhere from 5% to 15% on premiums.
  • Look for discounts: Some insurers offer discounts on homeowners insurance for retirees or employees or members of certain organizations.

Key Takeaways

  • High-value home insurance is a special type of homeowners insurance designed for homes worth $750,000 and up.
  • It provides higher limits on coverage provided by standard policies, plus additional coverage for the unique needs of homeowners with high-end homes.
  • This type of insurance will run you more than $1,200 per year in general, but you can lower your costs by shopping around and getting a high-deductible policy.