A high-value home insurance policy is a must for homeowners with a high-value property. Your home is a large investment and how you protect it can make the difference between restoring losses and retaining your equity, or losing your investment, your shelter, and your home. There are a lot of similarities but also many notable differences between a high-value home insurance policy and a standard policy. Get to know the important similarities and differences and how a high-value home insurance policy can provide you with the right coverage for your home and much more.
What Is High-Value Home Insurance?
A high-value home insurance policy provides higher coverage limits than a traditional home insurance policy. High-value home insurance carriers may also include additional coverages not found in a standard home insurance policy (HO3) to better meet the needs of homeowners who likely have additional perils to consider.
High-End Home Insurance Explained
Homeowners insurance for high-value homes is a great option for higher-valued properties because the needs of such estates are normally a bit different. There are more things to cover and materials that cost more and are unlikely to be covered by a standard home insurance policy. It can also help with unique circumstances including covering issues with staff that live and/or work within the home, creating higher coverage options for specific collectibles such as jewelry, and even allowing for the creation of trusts. Luxury homes deserve luxury homeowners insurance to adequately stay protected.
Best High-Value Home Insurance Companies in Texas
The best insurance companies for high-value homes are the ones that save you money while keeping you protected. Travelers Insurance is a popular option for homeowners in Texas, and we are happy to work with them, but the best brand for you may be different.
There are a number of reasons, and we’ll dive into them shortly, but this is one of the most important reasons homeowners are advised to shop around for their coverage. Freedom Insurance Group is proud to work with 25+ top-rated high-value home insurance brands in our insurance center to best serve our clients by finding the best coverage from a reliable provider.
How an HO5 Insurance Policy Covers Your Home
An HO5 home insurance policy will work similarly to standard home insurance in terms of the types of coverages it offers. The main difference is that these coverages are much larger than traditional home insurance. A high-value property is going to need higher coverage limits. Learn more about the ways your high-value home insurance policy will protect you:
These coverages work to protect your home, property, and finances against anything that is not excluded from your policy. Before we jump into what some common exclusions might be, it’s also important to understand the additional coverages high net worth homeowners insurance policies can provide that a standard home insurance policy may not offer. Here are a few common examples:
- Cash settlements if you choose to cash out rather than rebuild your home.
- Larger policy limits for personal belongings including expensive items such as collectibles, art, and high-end fashion.
- Sump pump and sewer backup coverage as well as service line coverage.
- Larger limits for your loss-of-use coverage.
- Identity theft protection.
- Personal injury coverage to protect against slander, libel, etc.
Replacement Cost Provides Higher Reimbursements
A standard home insurance policy will reimburse you for lost personal property based on the value of the item minus depreciation, but a high-value home insurance policy will provide reimbursement using a replacement cost method.
By using a replacement cost method to reimburse your loss, you receive the total amount it costs to fully restore what’s been lost by giving you the current market value of the items affected in your claim. Just another way how high-end insurance can provide better coverage for your home.
Policy Exclusions and Additional Coverages To Consider
HO5 coverage may provide a far wider scope of protection, but there are still some things home insurance policies simply won’t cover. These policy exclusions will require you to cover such losses based on additional policies, other protections such as a warranty, or out of your own pockets. Here are a few perils that may still be excluded with insurance for high-value homes and possible solutions for staying protected:
- General wear and tear is not covered by a high-value home insurance policy and will require you to either resort to a home warranty, the warranty of a particular appliance, or pay to restore the loss yourself.
- Flooding is not a covered peril, but a flood insurance policy can help you restore flood-related losses.
- Acts of war or terrorism are also not covered by your policy.
- For a more comprehensive idea of what is unlikely to be covered by your HO5 policy, check out this helpful Texas Homeowners Policies handout from the Texas Department of Insurance (TDI).
Finally, the need for a high net worth home insurance policy implies the logical conclusion that your household by nature also holds a high net worth. This could create serious legal issues in the event you or a member of your family is involved in a liability issue. Umbrella insurance is important coverage for homes with an elevated net worth as their assets could become targeted during legal proceedings.
The Cost of Luxury Home Insurance
Determining the cost of homeowners insurance for expensive homes is a lot like any other, only the needs are more expensive to protect. For example, high-end insurance companies are still going to look at your home’s age, the building materials used to construct it, the amount of coverage you need, where it’s located, etc., but for high-value property, these factors will be more costly.
High-value home insurance companies are doing one thing when they take you on as a client, determining how much risk you pose by enrolling with them. Each company has its own specific way of calculating these risks, and it’s why you are likely to see different quotes from different brands. The best luxury home insurance policy will be able to protect you without having you overpay.
Overall, the more risk you have, the more valuable a home you live in, and the more coverage you need, the more you’ll pay for your premium and vice versa. However, home insurance for expensive homes doesn’t need to be expensive. There are still many affordable plans available for you which can be maximized through comparative shopping and applying the right discounts.
Who Needs High-Value Homeowners Insurance
In the state of Texas, a homeowner with a home valued at $1 million or above would need a high-value homeowners insurance policy. But “million-dollar home insurance” isn’t exclusive to only those who own such properties. The continued rise in the cost of both housing and the construction of housing is elevating home values throughout the Lone Star State.
Homes that are anywhere between $725,000-$999,999 may also benefit from home insurance for million-dollar homes. Though it should be noted that not all high-value home insurance carriers provide such coverage for homes under $1 million. It’s important to ask an agent to determine what is available and which type of policy is best for your needs.
Affordable High-Value Home Insurance in Texas
Homeowners with homes worth ~$1 million to $100 million are in need of high-value home insurance and we are here to help. We work with many reliable high-end home insurance companies capable of protecting your home with unique protection that works for you.
Our agents have the tools and relationships with luxury insurance companies to provide you with not only protection for your home, but all of your needs. By bundling your home with luxury vehicles through auto insurance, liability protection through umbrella insurance, boat insurance, and more, we can even protect the other aspects of your life all while saving money.
Both bundling and comparative shopping are critical to saving you money which is why we do it. Since 2005, our average customer enjoys up to 40% on savings throughout the state of Texas. Contact us today to learn more about your high-value home insurance options.