Luxury homes are a reward for the lifestyle you’ve worked hard to build. However, the lavish features that make your home an oasis may not be adequately protected with a traditional homeowners insurance policy. Understanding how these elements can impact your insurance rates and coverage can help you make informed decisions about your protection.

Do I Need High-Value Home Insurance?

In the insurance sector, homes valued at $750,000 or higher are commonly seen as high value. Many policyholders mistakenly gauge their insurance needs based solely on the purchase price. If your home’s replacement value exceeds $1 million or if it contains luxury features or items, high-value homeowners insurance is necessary. Current economic challenges, supply chain issues and labor shortages have driven up rebuilding costs. Partnering with an insurance advisor specializing in high-net-worth protection can help assess your property’s current value and ensure certain features or valuable contents of your home are properly insured. 

Want to learn more about our premier client service insurance options? Download the CBIZ Premier Client Services information flysheet for additional insight.  

Luxury Home Features & Items That Require High-Value Home Insurance

Some luxury home features may impact your homeowners insurance rates or require high-value coverage or endorsements, including:

Valuable Objects

Expensive items like antiques, fine art, jewelry and collectibles may exceed a standard policy’s coverage limits. Homeowners with high-value items need to review their insurance policies carefully and consider purchasing additional coverage or a separate policy, such as a scheduled personal property endorsement or a valuable items policy, to ensure adequate protection for these items. Some valuable items excluded or exceeding traditional homeowners coverage limits include:

• Jewelry: Pieces from luxury jewelers such as Harry Winston, Cartier, Tiffany & Co. or Bulgari
• Fine Art: Valuable artwork, antiques and collectibles
• Musical Instruments: Instrumental investments, including Steinway pianos, Stradivarius violins or Gibson Les Paul guitars
• Furs: Expensive fur coats, stoles or accessories
• Firearms: Includes rare or historical pieces, custom-made firearms or collections featuring intricate engraving or embellishments
• Silverware & Fine China: Antique and valuable tableware, including luxury pieces from Herend or Puiforcat silverware

Custom or High-End Construction Materials

Luxury homes often feature custom features or high-end construction materials that enhance their elegance and value. While they elevate the aesthetic appeal of a luxury home, replacement and repair costs are costly due to their premium quality and craftsmanship. Examples of expensive upgrades that may need additional protection include:

• Custom-build cabinetry
• Exotic hardwood flooring  
• Imported marble or granite countertops
• Specialty roofing materials like slate, clay tile or copper
• Custom lighting

High-End Appliances

Beyond the hefty price tag of high-end appliances, any repair or replacement of these features can be much higher than standard appliances. Carriers will consider these features when setting premiums. Expect to pay more for the convenience and style of professional-grade kitchens, but their quality and durability make them a sound investment.

Smart Home Technology

The increasing popularity of advanced smart home systems and technology can make your life more convenient and improve your home’s security. Innovations like smart thermostats, intelligent HVAC systems, home security cameras and voice-controlled assistants are expensive to install, repair and replace. Insurance providers view these systems as high-value items and may require additional coverage. Additionally, these systems can increase the overall value of your home, leading to higher insurance rates. However, systems that reduce the likelihood of damage or theft and improve your home’s safety can ultimately lead to lower insurance rates.

Looking for additional trends to lower your insurance rates? Our 2024 Homeowners & Auto Market Outlook offers an inside look. 

Swimming Pools & Outdoor Structures

Swimming pools, outdoor kitchens, guesthouses and other outdoor structures may require additional liability coverage to address potential risks such as accidents, injuries or property damage.

• Swimming pools are an attractive feature, but they come with risks and liabilities. Homeowners with swimming pools may need to invest in additional liability coverage to protect themselves in case of accidents such as slip-and-fall injuries or drownings. Additionally, swimming pools require maintenance and upkeep, which can also increase your insurance costs.
• Outdoor kitchens typically include high-end appliances such as grills, refrigerators and outdoor sinks that add value to your home. Unfortunately, equipment is susceptible to damage and outdoor kitchens pose a fire risk. Insurance providers consider these factors when determining rates for high-value insurance policies. It’s important to ensure your outdoor kitchen is properly installed and maintained to minimize these risks.
• Carriage or guest houses that are used for rental purposes or as separate living spaces may need additional coverage or a separate landlord insurance policy to protect these structures and their occupants.

Home Office or Business Equipment

If you operate a home-based business or have extensive office equipment in your luxury home, standard homeowners insurance may not provide sufficient coverage for business-related property or liability risks. A separate business insurance policy or endorsement may be necessary.

Wine Cellars or Specialty Collections

While a wine cellar may be a lavish addition to your home, it can also increase your insurance rates. Wine collections are often expensive to replace and repairing or replacing a wine cellar can be pricey. Additionally, wine cellars can be prone to issues like mold and water damage, which can lead to costly claims.

Home Theaters

The expensive electronic equipment and custom finishes in a home theater can lead to higher insurance premiums. In the event of damage due to accidents or natural disasters, the cost of repairing or replacing a home theater can be significant. This is why insurance companies may view home theaters as a liability and may require additional coverage.

We’re Here to Help Protect Your Home & Assets

While luxury homes offer unparalleled comfort and style, their unique features often require specialized protection beyond traditional homeowners insurance. Understanding the impact of these distinctive elements on your coverage is essential for safeguarding your investment. Partner with a member of our team who is well-versed in high-net-worth protection to help you navigate the complexities of insurance and enjoy peace of mind knowing you’re fully protected against unforeseen events.