What is High Value Homeowners Insurance | Openly

High-value homeowners insurance is a specialized type of home insurance designed to protect higher value homes and their contents. 

Unlike standard homeowners insurance, high-value policies offer increased coverage limits and tailored features to meet the unique needs of owners of high-value properties.

Keep reading to learn more about what constitutes high-value home insurance coverage, its benefits, and how to choose the right policy to fit your needs. 

At a glance: 

• A high-value home typically exceeds $750,000 and possesses unique characteristics like custom architecture, prime location, and valuable contents.
  

• High-value homeowners insurance often requires specialized coverage, including increased limits for dwelling, liability, and personal property, as well as endorsements for valuable items.
  

• Underinsurance, limited coverage options, natural disasters, cybersecurity risks, and liability concerns are key challenges for high-value homeowners.
  
  

What qualifies as a high-value home?

While the value of a "high-value home" can vary, depending on region, a high-value home is generally considered to be worth $750,000 or more.¹ It’s important to note that the definition of a "high-value home" can also vary depending on the specific insurance company and the local real estate market.

Defining high-value properties

Insurance companies often have their own unique definitions of "high-value homes" for insurance purposes, which may differ from general market perceptions. The definition of a "high-value home" can vary significantly depending on the specific local real estate market. However, there are several factors that typically contribute to a home's classification as high-value:

• Homes with significantly higher market values than average homes in the area
  
  
• Properties with custom architectural elements, luxury finishes, or even historical significance
  
  
• Homes located in prime locations, such as desirable neighborhoods with excellent schools, proximity to amenities, and scenic views such as waterfront properties
  
  

Characteristics of high-value homes

High-value homes often possess additional characteristics that set them apart:

• Larger than average homes, often with multiple floors or expansive living spaces
  
  
• Custom architectural features, high-end materials, and custom-made furnishings
  
  
• Outdoor amenities such as water features, high-end landscaping, or outdoor kitchens
  
  
• High-end security features such as surveillance cameras and secure entry systems
  
  
• Valuable collections of art, antiques, jewelry, or other valuable possessions

In essence, high-value homes offer a unique blend of size, location, high-quality construction, and high-end features that cater to buyers seeking the best value for their money.

Tailoring insurance for high-value homes

Tailoring insurance for high-value homes requires specialized coverage beyond standard homeowner's policies. Review your policy annually to ensure it continues to meet your changing needs and reflect any updates to your property. 

Here's what to consider:

• Accurate property valuation—Obtain a professional appraisal to accurately determine the replacement cost of your home to ensure adequate coverage in case of a total loss.
  
  
• Increased coverage limits—Standard policies may have inadequate limits for dwelling, personal property, and liability coverage for high-value homes. Increased coverage limits can ensure more adequate financial protection to reflect the higher replacement cost or increased risk.
  
  
• Specialized coverages—If you’re located in a flood zone or earthquake-prone area, consider a separate floor or earthquake endorsement, as these are typically excluded from standard home insurance policy coverage. 

Some insurers, like Openly, offer policies specifically designed for high-value homes. These policies often include broader coverage, higher limits, and customized options. Consult with your independent insurance agent to help you assess your specific needs and recommend the most appropriate coverage options.

Custom home insurance coverage needs

High-value home insurance policies offer specialized coverage options to address the specific needs of high-end homeowners:

• Higher coverage limits for the structure of the home to account for its increased value
  
  
• Broader protection against liability claims, including those related to accidents, injuries, and property damage
  
  
• Supplemental coverage for unique features like art, jewelry, and wine collections (this may require a "scheduled personal property" endorsement)
  

• Adequate coverage for other structures like garages, guest houses, and pools
  
  

Additional coverage options

Depending on the location and specific needs of the homeowner, additional coverage options may be considered. Beyond the essentials, consider these additional coverage options for your high-value home:

• Identity theft protection—Coverage to help you recover from the financial consequences of identity theft
  
  
• Cybersecurity coverage—Protection against data breaches and cyberattacks
  
  
• Collectibles coverage—Specialized coverage for valuable collections such as art, antiques, and even wine
  
  
• High-value jewelry coverage—Specific coverage for valuable jewelry and watches, often with appraisal assistance

Home insurance needs change over time. Be sure to review your policy annually to ensure it still meets your needs and reflects any changes to your property or lifestyle.

Insurance challenges for high-value homeowners

High-value homes present unique challenges for homeowners and insurers alike. Accurately valuing these properties, securing adequate coverage, and navigating the complexities of specialized insurance policies are critical considerations.

• Underinsurance—Accurately valuing unique features, high-end finishes, and custom construction can be challenging for appraisers.
  
  
• Limited coverage options—Finding insurers willing to cover high-value homes, especially in high-risk areas, can be difficult.
  
  
• Natural disasters—High-value homes are often located in desirable areas, which may also be prone to natural disasters like wildfires, hurricanes, and earthquakes. Many policies have limitations or exclusions for certain types of natural disasters.
  
  
• Cybersecurity risks—High-net-worth individuals are prime targets for cybercriminals. Data breaches can expose sensitive financial information and lead to significant losses. Coverage for cyber-related losses may be limited or unavailable in standard policies.
  
  
• Liability concerns—High-value homes often host more social events, increasing the potential for liability claims from guests. Ensuring sufficient liability coverage to protect against significant lawsuits is crucial.
  
  
• Inflation—The cost of rebuilding a high-value home can increase significantly over time due to inflation and rising construction costs. Policies that included guaranteed replacement cost coverage ensure that your home can be rebuilt or repaired even if the cost of construction materials, or labor, have increased. 
  
  

Overcoming underinsurance risks

One of the biggest challenges for high-value homeowners is the risk of underinsurance. This occurs when the coverage limits on a policy are insufficient to fully cover the cost of rebuilding or replacing a home and its contents in the event of a loss. Here are some ways to overcome this risk:

• Obtain a professional appraisal every few years, especially after major renovations or market fluctuations. This ensures your coverage accurately reflects the current replacement cost of your home.
  
  
• Review your policy annually with your insurance agent. They can help you understand your coverage options, identify potential gaps in coverage, and ensure your policy adequately protects your investment.
  
  

Managing premium costs for high-value home insurance

High-value homes typically require higher insurance premiums due to their increased value and risk. However, there are strategies to manage these costs:

1. Increase deductibles—Raising your deductible significantly lowers premiums. Ensure you have sufficient emergency funds to cover the deductible amount in case of a claim.
   
   
2. Improve home security—Install security systems (alarms, cameras), smoke detectors, fire extinguishers, and consider upgrading locks. These safety measures often qualify for discounts.
   
   
3. Maintain good credit—In some states, credit history is a factor in determining premiums. A good credit score can lead to lower rates.
   
   
4. Explore loss control measures—Implement proactive measures like regular maintenance (roof inspections, plumbing checks) to reduce the risk of damage and potential claims.

While these strategies can help manage premium costs, prioritize adequate coverage. Don't sacrifice necessary protection to save on premiums.

Choosing the right insurer for your high-value home

Choosing the right insurer for your high-value home is crucial. Look for insurers specializing in high-value homes. They often offer:

• Guaranteed replacement cost—Ensures your home will be rebuilt to its pre-loss condition, regardless of the cost
  
  
• Extended replacement cost—Provides an increased dwelling coverage limit to account for potential cost increases
  
  
• Personal property replacement cost—Covers the replacement cost of your belongings, not just their actual cash value
  
  
• Scheduled personal property—Typically used for valuable items like jewelry, art, and antiques
  
  

What to look for in an insurer

When selecting a home insurance provider for your high-value home, consider the following:

• Financial stability—Ensure the insurer has a strong financial rating to guarantee claims payments. Look for insurers with strong financial ratings from A.M. Best, a leading credit rating agency for the insurance industry.
  
  
• Reputation—Choose an insurer with a solid reputation for claims handling and customer service. Read online reviews and seek recommendations from other high-net-worth individuals.
  
  
• Customer service—Look for an insurer with excellent customer service and responsive claims handling.
  
  
• Specialized expertise—Choose an insurer with experience in insuring high-value homes.
  
  
• Claims handling—Look for companies with a history of efficient and responsive claims handling. Some insurers have dedicated teams of experienced adjusters for high-value claims.
  

Future-proofing your high-value home insurance

Future-proofing your high-value home insurance involves proactively adapting your coverage to an evolving world.

To ensure your home is adequately protected, consider a home insurance policy from a provider that specializes in higher-end homes, like Openly. Openly works with trusted independent insurance agents throughout the country who can help you assess your unique needs and tailor a high-value homeowners insurance policy to safeguard your valuable asset. You can easily connect with an independent agent in your area to explore personalized coverage options or request a home insurance quote online through a trusted Openly agency partner.

^1. Mary Van Kueren. "High-Value Home Insurance: What It Is and Who Needs It?". Bankrate. Published 7 January 2025. Accessed 24 January 2025. https://www.bankrate.com/insurance/homeowners-insurance/high-value-home-insurance/