High-value home insurance: What it is and who needs it

What is a high-value home?

There's no exact definition of what constitutes a high-value home. In areas of the country where home prices are on the lower side, a house valued at $550,000 might be considered high value. But in a state where average house prices are considerably higher, a house worth $550K might not make the cut.

In general, however, a house is considered high value when its replacement cost is $750,000 or more. Note that the replacement value is not the same as the market or listing value. Replacement value is related to construction prices and how much it would cost per square foot to rebuild your house to its former state if it was destroyed or damaged in a disaster or mishap. 

A licensed insurance agent can help you determine your home's replacement value. This amount would then be the basis for your dwelling coverage, which is one part of a home insurance policy. Construction costs would include the material and labor costs for framing the structure, as well as all interior work, electrical, plumbing and any other costs required for the home to be livable.

What does high-value home insurance cover?

A luxury homeowners insurance policy and a standard homeowners insurance policy have several key differences, particularly regarding the type of coverage and coverage limits included. Here are some of the things you may receive with a high-value home insurance policy:

Higher coverage limits

High-value homeowners insurance policies typically have broader coverage than traditional home insurance policies. Many luxury home insurance policies cover your home and personal property at their replacement cost value on an open perils basis. This means that any losses not specifically excluded are covered. You might also get higher coverage limits for valuable items or extra perks with your additional living expenses coverage.

Additional coverage options

A high-value home insurance policy might also include additional coverage types that are not typically included in standard home insurance policies. For example, many luxury homeowners insurance policies may automatically include water backup, landscaping, identity theft and business property coverage. On standard home insurance policies, you typically have to request to add these coverages and pay extra for them.

Policy perks

Some of the best high-value home insurance companies also offer special perks for policyholders. The specific benefits vary based on the insurance provider, but some perks include free home appraisals, a cash settlement option in the event of a total loss, deductible waivers for certain losses and risk consulting to reduce risks in your home.

Dedicated customer service

If you purchase a high-value homeowners insurance policy, you might get access to dedicated customer service. In this case, policyholders are sometimes paired with a concierge or personal representative who can file claims on your behalf, schedule appraisals, find and hire contractors and book a hotel if you need to use your loss of use coverage.

Best companies for high-value home insurance

According to our research, the best high-end insurance companies include The Hartford, Farmers, Chubb and PURE Insurance. These companies offer options that high-value homeowners may find appealing. All but PURE Insurance are ranked in the J.D. Power 2024 U.S. Property Claims Satisfaction Study, showcasing their ability to provide a high level of customer service.

To determine the high-valued home insurance companies to feature, we evaluated coverage options, policy features and average premiums obtained from Quadrant Information Services. We also evaluated J.D. Power customer satisfaction scores and AM Best financial strength ratings to assess an insurance carrier’s history of being able to meet financial obligations.

Cost of high-value homeowners insurance

In the U.S., the average annual premium for a high-value home insurance policy with $750,000 in dwelling coverage is $4,189, which breaks down to about $349 per month. In comparison, the average annual premium for a standard home insurance policy with $300,000 in dwelling coverage is $2,181, which is roughly $182 per month.

Keep in mind that the cost of homeowners insurance is different for everyone. Premiums are calculated based on many factors, including your state of residence, claims history, policy type, amount of coverage, chosen deductible and applied discounts. In most states, your ZIP code, the age of your home and your credit history also play a part in determining your premium, although not all states allow the use of these rating factors.

How much high-value homeowners insurance do I need?

Knowing how much home insurance you need can be tricky, but with a bit of research, you should be able to get a decent idea. To determine how much high-value home insurance you need, you may want to consider:

• Your home's value: Consider how much it would cost to rebuild your home to its former condition. Note that this figure is not the same as your home’s market value.
• Your personal property amount: Your personal property coverage should be enough to replace your belongings, from furniture to clothing to appliances. It can be useful to have a home inventory on hand before you need to file a claim.
• Your liability risks: Standard home insurance policies usually come with a minimum of $100,000 in liability coverage. Consider adding an umbrella policy if you have frequent visitors or there is a pool or other potential hazard on your property.
• Additional living expenses: This coverage would apply if you were unable to live in your home due to a covered loss. It would go toward your lodging, food and other expenses until you can move back into your home.
• Your circumstances: High-value home insurance can usually be personalized with endorsements like identity theft, water backup and service line coverage.

A licensed agent can help you decide if the coverage levels and types you’ve settled on are appropriate. Independent agents, specifically, partner with multiple carriers and can help you determine your coverage needs and the right carrier for your situation.

Things to consider when purchasing high-value homeowners insurance

When purchasing a high-value home insurance policy, consider the following:

• Your coverage amount: Make sure you are purchasing adequate coverage for your situation, especially if you are a first-time home insurance buyer.
• Customer service: Consider choosing an insurance company that offers a dedicated client concierge and use their expertise to build a robust policy that can help limit risk and provide adequate coverage for your home and personal items.
• Replacement cost coverage: Each insurance policy may have a different method of calculating the cost of restoring your home and personal belongings. Two common types are actual cash value, which takes into consideration depreciation, and replacement cost coverage, which does not. It is also common to have extended replacement cost coverage, which would pay out a specific percentage above the policy limit in the event of a total loss.
• Premium: Price likely shouldn’t be the only factor you think about when insuring a luxury home, but it is a consideration. Luxury home insurance policies are usually more expensive than standard policies because they offer more coverage. To get cheap home insurance, you might want to shop around and compare quotes from several providers to make sure you are getting the lowest rate. Also, look for insurance companies that offer discounts you can take advantage of.
• Additional coverage: High-value home insurance can include additional coverage you may not be able to get with standard home insurance. These features may include coverage for a vacation home, dedicated risk management assessment, extended replacement cost coverage and a cash settlement for total loss from a covered peril.
• Flexible rebuilding options: If your home is destroyed in a covered event, having a flexible rebuilding option in your policy allows you to decide whether or not you want to rebuild or simply receive a cash settlement. This gives you the flexibility to rebuild, downsize or move.

Frequently asked questions

Methodology

Bankrate utilizes Quadrant Information Services to analyze January 2025 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on married male and female homeowners with a clean claim history, good credit and the following coverage limits:

• Coverage A, Dwelling: $750,000
• Coverage B, Other Structures: $75,000
• Coverage C, Personal Property: $375,000
• Coverage D, Loss of Use: $150,000
• Coverage E, Liability: $500,000
• Coverage F, Medical Payments: $1,000

The homeowners also have a $1,000 deductible, a $500 hail deductible and a 2 percent hurricane deductible (or the next closest deductible amounts that are available) where separate deductibles apply.

These are sample rates and should be used for comparative purposes only. Your quotes will differ.