If you have a high value Pennsylvania home, worth more than $750,000, you need more than standard homeowner insurance. The coverage levels offered by typical homeowner policies are insufficient to protect valuable belongings or unique architectural features. For this reason, the insurance market has custom-crafted policies to protect the homes and assets of high-income homeowners. Here’s an outline of what you need to know, as you select insurance for your luxury home.
Have Your Assets Appraised
In order to set the right level of coverage, you need to know the value of all your assets. This figure includes your home, of course, but it also extends to jewelry, art, vehicles, boats, landscaping features, and much more. Your insurance agent will refer you to a local Pennsylvania appraiser, so that you can move forward with this discussion. You can also keep a log yourself. Electronically being the best option in case of a fire. Keeping a log with simplify the claims process and make sure you’re full replacing all items.
Scheduled Personal Property Insurance
Standard homeowner policies set a low coverage cap of just a few thousand dollars on personal possessions, so you’ll want to specifically list, or “schedule,” your jewelry, electronics, art, antiques, and collectibles at their true appraised value. This scheduled personal property coverage becomes a part of your customized home insurance package. It’s covered worldwide and in most cases with no deductible.
Replacement Value or Cash Value?
One aspect of high value home insurance that you should discuss with your agent is whether your property should be covered at its current cash value or its replacement value. Replacement value is almost always preferable, especially with luxury homes and high-end items. Do you have a custom-designed tile mural, for example? Is your house part of the portfolio of a prominent architect? Do you have one of the nation’s 50 antique camellia gardens? The nature of custom homes is that they are unique and replacing damaged items can be devastatingly expensive if your insurance is inadequate. Most high value homes insurance policies will provide you an appraisal on the estimated replacement value of your home for no additional cost.
The term “bundling” refers to a price break you get by buying more than one kind of insurance from the same company. If you find an insurance company with good coverage in several different categories, bundling usually results in lower premiums. When you’re considering bundling, however, it’s important to review the value of each policy with your agent, because in some instances you’ll find better rates from going with two different, specialized insurers.
Umbrella policies protect everything you own — not just your home — in case you are found liable for damages to somebody else. You may be held responsible for an auto accident, in which the injuries suffered by the other party exceed your liability insurance. Or a visitor to your home may slip and fall on your icy steps, suffering damages that exceed the $300,000 to $500,000 coverage cap of a standard homeowners policy. Such standard coverage is nowhere near adequate for high-net-worth individuals, who have much larger exposure to lawsuits. Umbrella policies are an excellent bargain for the price, and are usually sold in increments of millions of dollars.
Underground Service Line and Water Backup Coverage
There are additional risks that you run, as a homeowner, that are not included in standard home insurance policies. These risks include any damage to the underground lines that carry water, electricity, sewerage, cable, and gas from the street to your house. If a problem occurs, and your front yard has to be excavated to fix it, you’ll be responsible for the costs. Your agent can add an Underground Service Line endorsement to your policy, to mitigate this risk. Similarly, if your water system or sump pump stop functioning properly, and their flow backs up into your house, you can suffer significant property damage that standard policies don’t cover. Water Backup Coverage will give you peace of mind, and you can be confident that your home is safe.
Independent Agents Give You the Best Coverage
For the average American home, which is worth about $227,000, today’s easy-access insurance apps can provide fast, inexpensive coverage. People who need high value home insurance, however, have additional needs. They are best served by a particular niche insurance market because of this, and they need more than the services of an app-based chatbot. An independent Pennsylvania agent can explore what’s available to you through companies that specialize in luxury home coverage (Erie, Chubb, MetLife, and PURE, among others), and find you the coverage that’s just right for your situation. Feel free to reach out to us for more information.