Owning a high end home is almost synonymous with the American Dream.
Most people aspire to own a luxury home with spacious rooms and a great view.
For those of us who achieve this dream, we quickly come to understand the old saying, "More money, More problems".
First, getting a loan requires much more patience because Jumbo loans take more time to close, then when you factor in that 40% of luxury homes are under insured, buying a luxury home can be a real nightmare...
But it doesn't have to be.
In fact, having your high end home insured properly only requires a few key points, which we'll get into in a few minutes.
But first let's look at some things you need to think about first.
High Value House Insurance
The first thing you need to know about buying a high end house is that it has about a 50% chance of being in a catastrophe prone area. These homes are typically in coastal areas, which means that a significant amount of them are going to be waterfront properties
High Value Insurance: Valuing Waterfront Properties
Generally speaking, a high value home is a relatively small market and is defined as having a value in excess of $1 million dollars.
Here are some things to consider when buying waterfront property insurance:
These things are vital because they all can increase or decrease the amount you pay in premiums for your home.
You should make sure that your insurance agent knows that you have a collection of rare books or custom wood floors. In the event that your home is lost and needs to be rebuilt, these items will be factored into the replacement costs.
Many high net worth homeowners lose their investment because they only have enough insurance to cover the mortgage or the sale price of the home and not the replacement value of the home because of the specialty construction work and other high value items that may need to be replaced.
When you are buying high value insurance, especially for a waterfront home, you may need to ask about general insurance, flood insurance and wind insurance because these are typically the ways that luxury homes are damaged.
How To Get The Right High End Homeowners Insurance
Unfortunately for 85% of high net worth home insurance policy holders, it's very difficult to get the right coverage and stay properly covered over time if you go directly to the insurance carrier for coverage.
They will give you the best high end home insurance they can, however, unless you have time to shop multiple carriers on a consistent basis, you will quickly become under insured.
That's because high value homes tend to be the most up to date homes and every time they are updated, the value of the home can change drastically.
And it's very common for luxury homes to actually overpay for less coverage because of it.
If you want the best luxury homeowners insurance you need to get a quote from an independent agent. Independent insurance agents can give you options that the insurance carriers can't. For example, we work with over 20 carriers which allows us to offer great coverage while also finding the most competitive rates available. It's like having a personal shopper.
We also review your policy frequently so that we can make sure that you are properly covered at all times.
If you would like a quote for your high value home, contact us today