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How Does High-Value Home Insurance Work?

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A home is often a person’s biggest asset, especially if it’s a luxury home. As with any other high value asset, protecting the property with the right insurance coverage is a must. 

For an upscale million-dollar home in San Diego, a standard home policy could result in potential coverage gaps. To get the best protection for your asset, consider getting a high-value homeowners insurance policy. 

If you are looking at luxury homes for sale in San Diego or planning on insuring your home, understanding how high-value home insurance works, including its coverage and benefits, can help you get ample protection for your most valuable asset. 

What is a high value home?

Home insurance providers classify high-value homes based on several factors, including the location, the home’s market value, and other factors. Typically, luxury properties are assets valued at over $750,000, but insurance firms vary on this number. Some insurers only insure high-end homes that are worth at least $1 million. 

Who needs luxury home insurance?

High-end homeowners insurance is best for people who own properties worth at least $750,000 and want to protect themselves and their assets with comprehensive coverage. Given the price of the home and the annual premium, luxury home insurance is geared towards high-net-worth individuals. It’s also an option for those at a greater risk of fraud, burglary attacks, or identity theft. 

The list below outlines situations or homes that would benefit from luxury home insurance: 

  1. High-value homes
  2. Historical homes with a high risk of damage or destruction
  3. Special homes with rare construction materials for rebuilding or reconstruction
  4. Homes with expensive appliances and collections (art, jewelry, or furniture)
  5. Homes with over seven bedrooms
  6. Homes with unique features or extensive amenities that would be costly to replace

Defining luxury home insurance

High-value insurance is a type of homeowners insurance that protects valuable properties. Some companies base this on assessed market value, while others estimate the value of a home based on its replacement cost value. 

High-value home insurance differs from standard homeowners insurance because it has a much higher coverage limit and includes coverage for all risks to the property’s amenities and in-home employees. Unlike standard home insurance, a high value homeowners policy may also include flood insurance.

Beyond the home and its belongings, high-value home insurance also offers more benefits than standard home insurance. For instance, it may include coverage for sewer back up. It also offers a higher coverage for such needs as replacing shrubs and trees and tree removal. Luxury home insurance also comes with higher medical payment limits, and some policies include alternative accommodations, guaranteed replacement costs, and second-home coverage. 

How Much Does High-end Home Insurance Cost?

Since high-end homeowner’s insurance offers more benefits and higher coverage, it is more expensive than standard home insurance. The plan’s price depends on the home’s value, amenities, the agency’s package, and the insurer’s personal claims history. 

According to Bankrate, the annual premium for high value home insurance for a $750,000 home is around $3,761. However, the actual premium is highly variable based on individual needs and coverages.

If you’re looking for luxury homes for sale in San Diego, we at Jacobo Realty Group are your best guides. We can help you navigate the market and help you understand your options – including the type of home insurance to get – so you can make informed decisions. 

Call us today at 760.632.8900 or contact us here to learn more.

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