A Consumer’s Guide to High-Value Home Insurance

Aug 28, 2021 | Personal Insurance

Buying a house is a big step. Deciding to buy your first home takes time. You need to look for the best house suited for you and you need to make sure that it is what you dreamed of. Most people consider it their biggest asset and will do everything to make sure that it is secure and protected. You want everything to be almost perfect and no problems if possible will occur. To safeguard your home, you will most likely choose the sturdiest structure, the most beautiful furniture, and home gadgets with the latest technology. And if you want the best protection for your home, you will need to purchase home insurance. This is why we came up with a consumer’s guide to High-Value Home Insurance.

A typical home insurance policy will include coverage for interior and exterior home damages, your possessions, injuries caused by accidents, and theft. It will relieve you from out-of-pocket expenses when disaster strikes. But if you have a high-value house, basic home insurance will not suffice. You will need high-value home insurance to ensure that your house is protected and can be rebuilt in case of destructive events. 

What is considered a High-Value Home?

A High-Value Home is defined as a home that has a replacement cost value of more than $750,000. It is sometimes called a luxury home and tends to be considerable in size. The value of these houses is in the top 10% in terms of prices. They are normally made from premium materials and indulgent amenities. Some insurance companies will only consider your house for coverage if the replacement cost of your home is valued at $1,000,000 and up. They are categorized as high-value base on the cost of rebuilding, cost of your possessions including antiques and other expensive collections. High-value homes are often located in nice and gated neighborhoods. 

High-Value Home Insurance

High-Value Home Insurance is a type of insurance that covers expenses and luxury homes. It provides adequate protection for your home, your possessions, and the people living in the house. It is specially curated by insurance companies to fill in the gap between basic home insurance owners and homeowners who have a high net worth and own luxury homes and have expensive taste in things. 

This type of policy also insure valuables including jewelry, antiques, fine art, and other large and high-value collections. Also included in the coverage of this type of insurance are special bicycles, cars, musical instruments, wine, and expensive, high-tech household appliances. 

Coverage 

High-value home insurance is basically standard home insurance but with expanded coverage limits and additional benefits and services. It gives you greater flexibility ideal for a more complex need. There are fewer exclusions giving you extra protection for your home and belongings.

Here is a list of expanded coverage available for high-value home insurance:

  1. Full Replacement

Rebuilds your home to its original condition and other structures in your property even if the cost exceeds your coverage limit. It is important that you declare the full value of rebuilding your home to your insurer to avoid significant financial loss. 

  1. Possessions or Belongings

High-Value Home Insurance insures your possessions at full cost. It includes expensive collections like pieces of jewelry, antiques, paintings, and the likes. It will be wise to update their declared value every few years to make sure that your claim will be at actual cost. 

  1. Personal Liability

If you are held responsible for injury or property damage to a third party, you will be protected with this coverage. It helps limit expenses if you are at fault and will shield you from lawsuits. 

  1. Identity Theft

This coverage protects you from impostors stealing your identity, your assets, and other personal information. Credit monitoring service is also included as well as reimbursement of lost wages in case you are not able to work. 

  1. Additional Living Expense

If your home is destroyed due to unforeseen circumstances, you may need to find a temporary home for shelter. Your insurance policy will pay for your temporary residence or hotel including meals and general living expenses. 

  1. Water Backup Coverage

This coverage will help pay for damages caused by water back-up and water damage to your home. This is one of the most neglected add-ons in basic home insurance. But with the high-value home insurance, this is already included. 

  1. Computers Coverage

This coverage provides protection for computers, laptops, tablets, and mobile phones damaged in case of fire or accidents. It also covers the direct physical loss. 

Exclusions

Even with high-value home insurance, there are still certain exclusions just like the basic type of home insurance. There are only a few of them but it is important to be aware of them. 

  1. The additional living expense is limited to one year only

Your policy will only cover a maximum of one year of living expenses while your home is being rebuilt. Your accommodation, meals, and other general expenses after one year will be from your own pocket expenses already. 

  1. Upgrades to the home are not included

If you suddenly decide to upgrade your television to a home theater screen, it will not be included in the coverage. If you plan to expand your living room or add a new room for any purpose, you will need to pay for it on your own.  Any upgrades in structures or possessions are not covered. 

  1. Gradual deterioration of the home.

Your policy will not cover damage that occurs gradually like wear and tear, corrosion, and rotting. If there are parts of your house that deteriorated over time, your insurer will not cover them. 

  1. Faulty electrical and mechanical workmanship

Unless you purchase separate coverage, you will not be able to claim for damages caused by defective workmanship. If your contractor did a bad job installing your wires and other fixtures, your insurance company will not cover them. This includes the use of faulty and substandard materials and wrong installation works. 

  1. Property damage due to an act of terrorism or war.

Most insurance companies do not include this in the coverage for the simple reason that if a war breaks out in the country, it can cause a catastrophe and leave companies bankrupt. They will not be able to pay you for damages caused by terrorism and war. 

Perks and Benefits of High-Value Home Insurance

If you are paying more for your luxury home, you are definitely entitled to certain perks and benefits that basic home insurance won’t give. Some of these are:

  1. Quick Customer Service – insurance companies have a dedicated hotline that is accessible 24/7 for benefits and claims. You will be able to talk to their customer representative and insurance experts for guidance. 
  2. Emergency Home Assistance – in case you have an emergency situation at home, you will be given immediate assistance. You can call them anytime in case of fire in the middle of the night or any destruction to the house due to natural disasters. 
  3. Help with contractors, surveyors, and other professional services – you will have access to specialized professional services to guide you in your home rebuilding. They will be able to give you their expert advice on how to build your home the right way without compromising its integrity and design. 
  4. Cash Settlement Option – if you chose not to rebuild due to total loss, you have the option to cash out from your policy. Instead of rebuilding on the same property, you can opt to buy a new luxury house somewhere using the cash settlement option from your insurance company.

The process of rebuilding a home is tedious work. It can cost you sleepless nights thinking and rethinking what you should and shouldn’t do to avoid problems in the future. The process of meeting all contractors in their respective fields, acquiring new materials, fixtures and furniture all take a considerable amount of time to accomplish. It can be a daunting job if you do not have the right support to help you with every detail of your rebuilding. 

With high-value home insurance, you are assured that help is just a phone call away. The many perks and benefits that this type of insurance can cover outweigh the premium cost that you will pay. It will make the process of rebuilding easier for you and your family. It will give you that peace of mind that you need to ensure that your home will be a better version of the damaged house before. It may look the same but it will definitely give you a brighter outlook on life. 

To help you understand the many coverages included in High-Value Home Insurance, you can contact Advantage Insurance Solutions at (720) 221-8168 and schedule a meeting with one of our well-trained and professional advisors. Talk to the experts in home insurance. Call us today.