What's High-Value Home Insurance?

If you own a luxury home, there are special considerations for insuring it. Here’s what to know.

Written by Hilary Collins / June 3, 2022

Quick Bites

  • You need high-value home insurance if your home would cost $1 million or more to rebuild from scratch.
  • Insuring your home with high-value home insurance means that you’ll have the resources to repair and replace your home’s features and contents.
  • High-value home insurance is very similar to standard homeowners insurance—it’s just more expensive and has higher coverage limits.

Heated bathroom floors, wine cellars, home theaters, marble islands, intricate woodwork, infinity pools…luxury homes are a step above the rest. Some may not boast flashy features but instead use the best of the best for materials—marble slabs, hand-carved woodwork and amazing custom touches. A high-value home could also be a historical or architecturally significant home.

While high-value homes come in all shapes and sizes, they have something in common: All the things that make a home luxurious will also require special insurance to repair or replace. Once you own a high-value home, it’s time to figure out how to best protect it. Let’s take a look.

Inside this article

  1. What is a high-value home?
  2. What's high-value home insurance
  3. How it works
  4. How much does it cost?
  5. FAQs

What is a high-value home?

Whether or not your home needs high-value home insurance isn’t necessarily based on what you paid for it. “It’s not the value of the home but rather the replacement value,” says Loretta Worters, vice president of media relations for the Insurance Information Institute. “In other words, how much would it cost to replace your home?”

Tip: Generally, homes that would cost $1 million or more to rebuild should be covered with a high-value home insurance policy.

She notes that inflation, labor shortages and supply chain issues have driven up that cost in recent years. And it might be especially difficult and expensive to replace custom fixtures or to find a qualified contractor to work on a historically significant house. That’s where high-value home insurance comes in.

What is high-value home insurance?

High-value home insurance isn’t a unique kind of insurance, but a homeowners policy with higher coverage limits to replace and repair items and features with higher price tags. High-value homes are also more likely to have high-value contents, such as fine art or a wine collection, that need expanded coverage.

“The most important and common benefit of opting for high-value home insurance is that expanded coverage, both for your property as a whole and for individual items,” Whorters explains. “Rare or expensive items like jewelry, art and other collectibles will also require higher coverage limits.”

And if you have a luxurious home with a wine cellar, you might be someone who loves to throw parties. Most high-value home insurance policies will also offer higher liability limits to protect you if you’re sued by a guest—say, someone poked their eye on your multi-million dollar Alberto Giacometti sculpture or got dehydrated in your sauna.

“These policies will also include higher limits without any special endorsements required, including things like sewer back-up and landscaping coverage,” Worters notes. After all, your garden with the lily pad pond and topiaries won’t replace itself after a storm or wildfire.

How does high-value home insurance work?

Filing a high-value home insurance claim looks a lot like filing a standard homeowners insurance claim—the difference is the coverage amount rather than the actual product. High-value home insurance allows for larger payouts to enable you to make the expensive repairs needed to restore your home after a natural disaster or theft.

Tip: Since high-value home insurance is basically a higher-coverage version of standard homeowners insurance, you’ll still follow the same steps: report on the damage, protect your property from further damage when possible, determine if you need additional living expenses and file your claim in a timely manner. After that, your insurer will dispatch an adjuster to inspect the damage—then you’ll receive your payout and begin repairs. 

For instance, if a standard home has a kitchen gutted by a fire, the materials and skills needed to repair it are likely both cheaper and easier to find. A luxury home facing the same problem may need to source Portero Genuine Extra marble for the island and backsplashes at as much $300 a square foot, replace a $6,999 Miele range and find a qualified carpenter to repair vintage built-ins.[1]

That said, some high-value home insurance will go above and beyond to help you after disaster befalls in ways normal homeowners insurance may not. “There are [insurance] companies that provide special services or connect you with experts,” Worters says. “For example, a lot of high-end homes have special moldings, so they will connect you with artesans to recreate some of those architectural details if your home has been damaged.”

How much does it cost?

Much like a luxury home versus an average home, high-value home insurance costs quite a bit more. “It’s more expensive than a standard homeowners policy, maybe 20% more,” Worters explains. “It really depends so much on the size of the house and if you have wine or art collections,” among other factors.

According to the 2018 numbers data from the National Association of Insurance Commissioners (NAIC), the national average cost of standard homeowners insurance is about $1,249 per year or $104 per month.[2] Based on those numbers and Worter’s estimate, high-value home insurance would cost $1,499 annually or $125 monthly.

However, you might be able to lower the cost by taking certain actions. Here are a few tips to potentially lower your rate:

  • You may qualify for a green-home discount if your home is LEED-certified.

  • You may get a discount if you haven’t filed a claim in the past few years.

  • You could qualify for a lower rate if you take steps to weather-proof your home against natural disasters common to your area. 

  • You can usually lower your premium by increasing your deductible or bundling services like home and auto insurance.[3]

To enjoy all your luxury home offers without worrying about what might happen, make sure you have a high-value home insurance policy. Then you can float in your infinity pool with a glass of 1988 Perrier-Jouët Belle Epoque Brut and enjoy the view.


Why is high-value home insurance better than normal home insurance?

High-value home insurance is basically the same as normal homeowners insurance, it just allows for a higher amount of coverage—a bigger payout. After all, it costs more to repair and replace a wine cellar full of vintage wines than a mini fridge full of Miller High Life!

What influences the cost of the premium on my high-value home insurance?

Things like the size of your home, the location, your claim history and the value of your possessions will determine how much your home insurance premium ultimately costs.

Who needs high-value home insurance?

If your home would cost $1 million or more to rebuild from scratch, you should opt for high-value home insurance over a standard homeowners insurance policy.

Article Sources
  1. “Understanding Marble Countertops Cost,” March 6, 2019, Marble.com. https://marble.com/articles/marble-countertop-cost#Premium+Marbles
  2. “Dwelling Fire, Homeowners Owner-Occupied, and Homeowners Tenant and Condominium/Cooperative Unit Owner’s Insurance Report: Data for 2018,” 2022, National Association of Insurance Commissioners. https://content.naic.org/sites/default/files/publication-hmr-zu-homeowners-report.pdf
  3. “Want to Lower Your Homeowners Insurance Premium? There Are Discounts for the Taking,” Aug. 11, 2021, Wall Street Journal. https://www.wsj.com/articles/how-to-lower-homeowners-insurance-premium-11628695730

About the Author

Hilary Collins

Hilary Collins

Hilary is an experienced finance writer with a passion for turning complicated topics into readable stories with real-world takeaways.

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