Home Insurance Considerations for Luxury Homes

Owning a luxury home is a dream come true for many, but protecting such a valuable investment requires careful consideration and specialized insurance coverage. Unlike standard homes, luxury properties have unique features, high market values and expensive contents that necessitate comprehensive protection.

Insurance for High-value Homes

The following are key considerations for insuring high-value properties:

• Comprehensive coverage—Standard homeowners insurance may not suffice for luxury homes due to their unique features and high market value. An HO-5 policy, also known as the comprehensive form, is often recommended. This policy can offer extensive coverage for both the dwelling and personal property on an open-perils basis, meaning it covers a wide range of risks unless explicitly excluded.
• Replacement cost coverage—Luxury homes often feature custom designs and premium materials, making them expensive to rebuild. Ensure your policy includes extended replacement cost coverage, which adjusts the coverage amount to reflect current rebuilding costs, even if they exceed the original policy limit.
• High-value personal property—Items such as jewelry, art collections and designer furniture require additional coverage. Standard policies may not adequately cover these high-value items, so consider adding scheduled personal property coverage to protect these assets.
• Liability protection—Higher liability limits are crucial for luxury homeowners. Given the higher risk of lawsuits, an umbrella policy can offer additional liability coverage, typically up to $5 million, safeguarding your assets against potential claims.
• Loss of use coverage—If a covered event renders your luxury home uninhabitable, loss of use coverage may compensate you for additional living expenses, including the cost of temporary housing. This can help ensure you maintain your standard of living while repairs are underway.
• Regular appraisals and updates—The value of luxury homes and their contents can change over time. Regular appraisals and policy updates can help ensure your coverage remains adequate and reflects the current value of your property and belongings.

Learn More

Contact Leadwest Insurance Solutions to discuss your homeowners insurance.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.