Learn about high net worth homeowners insurance and find the best companies that offer it. Specialty property insurance policies for affluent clients offer higher limits and greater protection than standard home insurance policies.
High Net Worth Homeowners Insurance
Whether a homeowner's insurance policy covers a home that is worth $100,000 or several million dollars, the basic coverages are the same - property, liability and personal property. However, wealthy families have more complex insurance risks than others and need specialized high net worth homeowners insurance coverage to protect their assets.
For example, the affluent tend to have personal property that is far more valuable than others, employ a staff that assists with the functioning of their homes, or vacation homes, have expensive artwork, wine collections and more, and also run the risk of being sued for large sums of money due to their wealth.
A standard homeowner's insurance policy will safeguard personal property, as well as liability protection; however, more often than not, a standard policy will limit coverage amounts or exclude coverage for extravagant amenities, such as those that are listed above. Also standard homeowner insurance carriers like GEICO, Progressive, State Farm, Allstate, Farmers & Nationwide etc. are not equipped to value expensive homes properly - which can create large gaps in coverage and overpayment of premiums.
This doesn't mean wealthy families are unable to properly insure their homes. Specialized insurance carriers do cover them, but the coverage that they require - especially for the aforementioned amenities - do come at a price. Additionally, the majority of providers that offer homeowners insurance coverage have a lengthy list of floaters and endorsements in order to reinforce the additional coverage that high net-worth individuals require for their homes.
Standard Homeowners Insurance vs High Value Homeowners Insurance
Homeowners who have a high net-worth have different needs than standard homeowners. For that reason, it is important to know the difference between standard homeowner's insurance and high value homeowner's insurance. While anyone who owns a home wants to make sure that their assets are well protected, affluent families have different and more complex needs than standard homeowners - including coverage for primary and secondary residences, private collections, identity theft, and even kidnap and ransom.
Here's a look at the difference between standard and high value home insurance:
Property Risks That Are Covered
- Most standard homeowners insurance policies will only cover losses or damages that are related to a particular cause, such as fire damage, storm damage, or theft. If the policy doesn't explicitly list a cause, it won't be covered.
- High net worth homeowners insurance will provide coverage for losses or damages that occur as a result of any cause. In other words, unless your policy specifically states that a cause of a damage or a loss specifically excludes something (like flood or earthquake), you will be covered.
It's important for homeowner's who have a high net-worth to have an insurance policy that is specifically designed for their needs because they won't have to prove the cause of a loss or damage to their insurance company in order to file a claim.
Extended Replacement Cost
Extended replacement coverage is the most comprehensive coverage available. It guarantees that losses, damages, and repairs will be covered up to the high net worth homeowners insurance policy amount; however, it will also cover an additional coverage beyond the policy amount for a covered claim, such as 25 percent or even up to 200 percent. Extended replacement coverage will pick up some of the additional costs if repairs to your homes exceed the amount your policy will cover.
With a standard home insurance policy, extended replacement cost is not always offered and it is limited if it is. However, with a high value homeowner's insurance policy, extended replacement cost will be guaranteed, no matter what the final cost is.
This is important for individuals who have a high net-worth because it ensures that they have the right amount of coverage to repair or rebuild their home. For example, if the cost to rebuild the home is $1 million, they will receive the full amount that is needed to repair the house.
Cash Out Option for Replacement Cost
If your home suffers extensive damage and it is deemed a total loss, with a high value homeowner's insurance coverage, you will have the option to rebuild the structure or to take a cash payment up to the policy limit. With a standard insurance policy, this option is not offered.
Personal Property Coverage
As your wealth increases over time for affluent families, the value of homes, cars, and other assets tend grow too. This often leaves valuables exposed to coverage gaps as the insurance has not kept pace with the property.
A large concern is if high net-worth individuals have enough personal property coverage for their expensive valuables. Specialty homeowners insurance policies for clients with expensive assets offer higher limits and greater protection than standard homeowners insurance policies. These high net worth homeowners insurance policies offer a broad range of personal property coverage for valuable collections of jewelry, art, wine, guns, antiques and other valuables with limits well above the range that most standard policies offer.
The liability risks for the high net-worth have been growing over the last few decades. As personal injury attorneys have been looking for deeper pockets, the affluent are at a greater risk for lawsuits and larger claims. For example a dog bite or slip and fall could trigger a lawsuit into the millions. For example, in 2013, a NJ homeowner was sued and settled for $1,750,000 - for a dog bite. (Dog bite lands healthcare worker $1.75M payout.) These risks are real for high net worth homeowners.
And because these awards can be large if the wealthy homeowner is found at fault, if they do not have enough liability coverage between their home liability and umbrella, they could be forced to sell their hard earned assets to settle the claim. People whose wealth has grown very fast are usually at the greatest risk - as updating their personal insurance is usually not as much as of a priority than their business insurance coverage. This often leads to a situation where they are severely underinsured and might even have to sell some or all of their business to pay a personal liability judgement.
Best High End Homeowners Insurance Providers
So which companies offer the best high end homeowners insurance policies? There are several providers out there, but among the best include:
- AIG Private Client Group
- AIG Premier
- The Chubb Insurance Group
- Encompass Insurance
- Hanover Prestige
- MetLife Grand Protect
- Pure Insurance
- Nationwide Private Client
These companies provide comprehensive insurance coverage that is specifically designed for high end homes. High net worth insurance carriers, high net worth insurance brokers, best insurance companies for high networth individuals, high net worth insurance market share, insurance for high networth individuals, chubb high net worth insurance, high net worth personal lines insurance & health insurance for high net worth individuals.
High Net Worth Homeowners Insurance - The Bottom Line
We hope this article on high net worth homeowners insurance has been informative. If you are part of a high net-worth family and you are looking for homeowners insurance, the companies mentioned above are good options to consider, and will help properly protect your home.
High Net Worth Insurance Information
EK Insurance advises our affluent clients on what coverage options are available to them. Please check out more of our articles on insurance choices for wealthy families: