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High-Value Home Insurance Explained

David Chang, ChFC®, CLU®
By: David Chang, ChFC®, CLU®

Our Insurance Expert

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Homeowners insurance protects one of your most valuable assets. But, based on the value and features of your home, the cost to replace it may be higher than your policy limit. High-value home insurance protects these types of homes.

What is high-value home insurance?

High-value home insurance is a special type of homeowners insurance policy that covers homes with high market value. If someone owns a luxury home and has expensive property, then a typical homeowners policy may not offer enough coverage.

This is where a high-value home insurance policy comes in. A high-value home insurance policy provides the coverage to protect a high-end residential home. A high-value home insurance policy offers higher coverage limits compared to a standard policy. This includes personal liability, personal belongings, and additional perks that a typical policy does not offer. Luxury and high-end homes can be expensive to rebuild. High-value home insurance covers the gap if the replacement costs exceed the insured value.

What classifies as a high-value home?

A high-value home is typically one that is worth $750,000 or more. Some insurers have a minimum of $1 million as a limit. High-value homes can also be historic homes or houses with unique features.

It is important to note that market value doesn't equal the replacement cost. Insurers take into account the entire cost of rebuilding a home, from the cabinets, flooring, appliances, and labor. When you factor in everything, the replacement cost to rebuild a modest home to its original condition can easily exceed $750,000.

Many traditional home insurance companies do not cover homes valued above a certain amount. High-value home insurance offers the same coverage offered by traditional policies and much more. High-value homeowners tend to be wealthier. They generally need higher personal liability and personal property limits.

What does high-value homeowners insurance cover?

High-value home insurance policies provide extra perks that an affluent homeowner may need. For a standard policy, homeowners will need to buy extra endorsements for more coverage. But a high-value homeowners insurance policy is much more comprehensive.

Personal belongings

Homeowners that own a high-value home will typically own high-value items as well. These items may include jewelry, furs, silverware, firearms, and collectibles such as coins and stamps. Some high-value policies also include business property kept in a home. High-value policies include higher limits and better coverage.

For personal belongings, home insurance has two types of coverage: actual cash value or replacement cost value. A typical policy replaces personal belongings using actual cash value. Actual cash value pays you the current market value of your belongings minus depreciation.

Replacement value policies cover the full cost to replace your belongings. High-value policies typically include replacement value. They cover contents without applying depreciation or requiring replacement of the items. In addition, a typical policy will only replace personal belongings for named perils. A high-value policy on the other hand will replace personal belongings regardless of the type of risk.

Structural repair or replacement

Under a typical homeowners insurance policy, the insurer will replace a home based on the policy limit. But due to the changing prices of materials, labor, and other features, the actual cost to replace a home may be significantly higher.

A high-value home insurance policy typically has a guaranteed replacement cost coverage. This means the insurer will cover the cost to repair or rebuild a home to its original condition even if the cost exceeds the policy limit. This can be extremely useful if costs of rebuilding a home rises due to a natural disaster such as a tornado.

High-value policies also have a cash settlement option. This means a homeowner can choose not to rebuild the home after a total loss and take the cash instead. Homeowners under this policy can choose to increase coverage for losses due to mold or bacteria up to the insurance of the home.


Wealthy homeowners can be attractive targets for lawsuits. Most standard insurance policies provide $100,000 worth of liability insurance. Additional liability protection can range from $300,000 to $500,000. These amounts will not be enough. High-value policies offer homeowners liability coverage up to $100 million.

High-value home policies also have higher limits for medical payments and defense costs. Your attorney fees may be covered if you need to defend yourself against claims of libel, slander, and defamation. These policies also include financial reimbursement for fines and restitution.

Many wealthy homeowners use domestic help. Should one of them get injured while on the job, a high-value home policy can cover their medical expenses. It can also cover any legal fees should a homeowner be responsible for the injury. A typical policy will not cover personal injury claims, whereas high-value policies do.

Additional coverage options

High-value insurance also offers benefits that typical insurance companies don't offer.

  • Equipment breakdown -- Replacement of HVAC systems, appliances, and other electronics that help maintain a home
  • Service line coverage -- Pays to repair or replace homeowner-owned exterior underground piping or electrical service lines
  • Identity theft protection -- Coverage up to a certain amount for expenses the policyholder incurs as a direct result of identity fraud
  • Risk management services -- Insurance company experts provide complementary risk management and loss mitigation guidance
  • Higher living expenses -- Higher coverage for temporary living arrangements such as hotel, laundry, etc., while waiting for a home to be rebuilt
  • Backup of servers and drains -- Provides coverage up to the dwelling limit of the home and contents if policyholder sustains a loss from drain or sewage back up

Based on the insurer, there are more niche coverage options that a homeowner can choose. Additional coverages under a high-value policy can include: yacht and specialty watercraft, liability coverage for a private jet, medical coverage for pets, kidnapping and ransom insurance, and more. High-value home policies also offer flood insurance. Typical policies do not provide flood coverage.

How much does high-value homeowners insurance cost?

The average homeowners insurance policy is $1,725. High-value home insurance policies can be two to three times more expensive.

High-value insurance premiums

The insurance premiums vary based on the insurer, how much homeowners insurance is needed, coverage options, the deductible, and a variety of other factors. Insurance premiums for high-home insurance policies can range from $3,500 to $5,550, which is two to three times more expensive than a typical policy.

High-value insurance deductibles

A homeowner can choose the deductible amount of their policy. This will impact the premium amount. However, some high-value home insurance policies have large loss deductible waivers. This optional endorsement waives the deductible for losses that exceed a certain amount.

A standard policy may not be enough

A standard policy limits coverage amounts. Homeowners can purchase additional riders to provide extra protection, but there may still be coverage gaps.

High-value policies may be a better option since they can meet the unique needs of high-value homeowners. For many high-net-worth individuals, a typical policy may not be enough to properly insure their property and belongings. A high-value policy can address these concerns with customized coverages and higher coverage limits.

Best high-value homeowners insurance companies

Chubb Insurance

AIG Private Client

Nationwide Private Client

Harris Insurance


Pure Insurance


  • The amount of insurance should be based on the home's replacement cost value. This type of coverage replaces the home and belongings at their full value, compared to actual cash value, which pays you what they are currently worth, minus depreciation. While this coverage may be more expensive, the property will be fully protected.

  • Home insurance is based on three different levels of coverage: actual cash value, replacement cost value, and extended cost value. Actual cash value pays you what your house is currently worth, minus depreciation. Replacement value policies cover the full cost to replace your home. Extended (or guaranteed) cost value pays the full cost to replace or rebuild your home if it is more than your policy limit.

  • If your home is worth $750,000 or more, or you own a historic home or a home with unique internal and external features, then you should consider high-value insurance. You should also consider it if the cost of replacing your home will be very high and if you own expensive or priceless items such as art, collections, jewelry, and other hard-to-replace items.

  • The amount of high-value homeowners insurance you need should be based on your home's value, the value of your personal property, your liability risks, and your unique needs. Your home insurance needs should be based on how much it would cost to rebuild your home. High-value homeowners should consider extended or guaranteed replacement cost coverage to fully protect your property.

  • Not all insurance companies offer high-value home insurance. Some insurers will sell additional endorsements or riders for a luxury home. There are certain premium home insurance companies that only offer high-value homeowners insurance. Some large insurance companies offer both the standard and high-value home insurance policies.

Our Insurance Expert