Insuring your home sufficiently ensures that the occupants, belongings, and the home structure are well protected against potential risks. Most American homes are covered by standard insurance policies and are usually sufficiently covered since their value is in line with what the policies offer. For luxury homes, there comes a challenge. Not many standard insurance policies cover them sufficiently, which leads to underinsurance and in turn, financial loss in case of damages or accidents. Below is a guide to help you understand more about luxury home insurance.
What Is Luxury Home Insurance?
Luxury home insurance is a type of insurance policy designed for homes with a higher market value than standard homes. Luxury home insurance packages cover more than the standard insurance and are pricier too. Although insurance companies may offer additional coverages on top of the standard policy, luxury homes may remain underinsured even after getting the additional covers.
How Does Luxury Home Insurance Differ from Standard Insurance?
Luxury home insurance differs from standard home insurance since it offers:
More Structure Coverage
Standard home policies cover a certain amount for the home structure. Luxury home insurance policies offer more coverage meaning in case of structure damage, you will be compensated more than what you would get with a standard policy. This is because most luxury homes are very large and are made of unique, and expensive construction materials.
Luxury home insurance offers additional coverage than standard home insurance. For example, they may include things like identity theft, landscaping, and water backup.
Additionally, most luxury homes have a lot of valuable possessions such as expensive jewelry and pieces of art. Some standard policies cover these expensive possessions, but up to a particular amount which is often lower for many luxury homeowners.
Also, standard home policies may not cover your possessions from all losses, some exclude losses such as natural disasters. Some luxury home insurance packages offer coverage for any kind of risk.
Additionally, they also offer better liability coverage than standard policies.
Cost Of Luxury Home Insurance Package
Just like in standard home insurance, there is no one-size-fit-for-all luxury home insurance. How much you pay depends on several factors such as the amount of coverage, home location, and deductibles.
But one thing is for sure; you will pay more for luxury home insurance than a standard one. So, if you want to switch from a standard policy to a luxury one, be prepared to pay higher premiums. However, it’s worth it because, in case of a loss, you will be compensated more as well.
How Will I Know I Need Luxury Home Insurance?
Not every home requires luxury home insurance. Some only need the standard ones, and getting a luxury one for them would lead to over-insuring. Also, you might be having a standard insurance policy and think it’s fine, but you need a luxury one. If your home has the below characteristics, it might be a candidate for luxury home insurance.
- It’s worth more than $750,000
- Some of the construction features used to make it are very expensive and not commonly used
- It has some of your expensive art or décor pieces
- Has high-end appliances not found in standard stores
- Has unique exterior and interior features, such as custom landscaping, swimming pools, and other tailor-made features
If you aren’t sure what is appropriate for you, an insurance expert will give you the right information.
Building or buying a luxury home is expensive. Since they are also prone to risks, getting luxury home insurance coverage will ensure that your home and everything it contains is well insured against potential loss. If you have a luxury home and a standard insurance policy, some losses will not be catered for by the insurance company, and you will have to pay for the damages from your pocket.