By David Clausen • High Value Home Insurance
Updated August 15th, 2025 • 11 min read
In 2025, the landscape of high-value homeowners insurance is evolving amidst higher rebuilding costs, rising premiums, and emerging climate risks. Inflation, supply chain disruptions, and frequent natural disasters have pushed national homeowners insurance averages to between $2,100 and $2,600 annually for $300K dwelling coverage. For multimillion-dollar homes, the stakes are even higher: premiums for a $1 million dwelling now average around $7,500 per year.
Whether your home is valued at $1 million, $2 million, $3 million, $5 million, or even $10 million or more, multimillion-dollar homes come with a unique set of coverage considerations. While many of the coverages are similar to those for a less valuable home, the cost of insuring a luxury home, condo or co-op is higher not only because the insured value of the home is higher, but often also due to location, construction type, style of home, safety features, year built and a variety of additional factors.
Insurance rates for luxury homes can vary widely across the nation. Across the U.S., homeowners insurance rates can range between $0.20 per $100 of insured value all the way up to $1.30 per $100. Home insurance in Suffolk County, New York, for example, usually costs about $0.40 to $0.50 per $100 of insured value. However, it isn’t uncommon to find homes that fall outside of that range for a variety of reasons.
Homeowners insurance rates can consider hundreds or even thousands of data points to determine a premium, but don’t worry — we won’t discuss them all in this article. Instead, we’ll look at some of the largest considerations and discuss the basic factors that contribute the most to home insurance costs.
What drives high-end, luxury home insurance costs?
Let’s look at some of the biggest factors in determining high-value home insurance rates. You’ll find that most are related to risk, with factors that contribute more risk of a loss raising insurance costs and factors that reduce risk also reducing overall insurance costs.
Location
You may remember your realtor telling you location is everything in real estate. That’s often true, but your home’s location also influences your home insurance rates — and sometimes in ways that aren’t always obvious.
A house located right next to the shoreline or next to a body of water costs typically more to insure than a home that’s inland. Some insurers charge a surcharge for homes within 500 ft. of saltwater. Exposure to storms and water damage is a more obvious concern, but insurers even look at location data such as crime statistics in the area to help determine the probability of a loss. Hundreds of data points may be considered when underwriters work with experts and insurance software to rate a risk, which is the industry term for pricing your home insurance policy.
Construction of home
The type of construction used for your home is also a meaningful factor in the cost of your policy. Masonry homes (brick & concrete block construction) can be more fire-resistant and have better durability in the face of storms and wind. In Florida, for example, most building codes require a home to be built using concrete so they can survive hurricane-force winds (74mph+ sustained winds).
In some cases, depending on the materials used and the construction methods needed to repair the home, masonry homes can also be more expensive to rebuild. The percentage of masonry compared to framing is considered as well. Most homes with masonry aren’t 100% of either type of construction. The type and shape of the roof on your home can also play a role in rates.
The cost to reconstruct your home
Square footage alone isn’t enough to determine a rebuild cost for your home. Particularly true for upscale homes, building materials can vary in price for homes in the same area or even for homes right next door. Homes built with more expensive materials, or which may require special construction methods to rebuild typically cost more to insure than homes that use standard materials and standard construction methods.
Year Built
You might not think the age of your home matters when buying home insurance, but it can. While many older homes were extremely well-built, newer homes tend to have more safety features built-in as well as newer wiring, plumbing, and climate-control systems, all areas of a home that can lead to a home insurance claim. Generally, expect newer or newly updated homes to get a bit of a price break on insurance rates. The age of the roof can play a role as well. Roofs wear out over time, sometimes leading to water damage or making the roof more susceptible to wind or storm damage.
Your credit score or insurance score
You might not expect this one, but credit scores can affect insurance rates, with lower scores often leading to higher insurance rates. Insurance studies have found a correlation between credit scores and the frequency of claims, so this seemingly unrelated factor can affect rates in either direction. Some insurers refer instead to an insurance score, which considers both your credit score and your claims history.
Your loss history
In insurance-speak, a loss is a claim. If you’ve had recent insurance claims — even if with another insurer or for another property, your home insurance rates can be affected. The type and the amount of the prior claim can also drive rates, with larger claims or certain types of claims becoming underwriting considerations.
Packaged policy or standalone policy
This refers to whether you have a single policy with an insurer or whether you have more than one policy with an insurer. In many cases, there are extra savings available for bundling more than one insurance policy with a single carrier. Depending on the types of insurance policies you have with that insurer, you might earn a lower rate on just your home insurance policy — or possibly on multiple insurance policies of different types.
Your chosen deductible
The deductible is the part of the claim that you pay. Every home insurance policy has a deductible and often there is more than one, with different types of
deductibles applicable to different types of claims. If you have a covered claim, the insurer pays the amount due after the deductible is subtracted from the covered loss amount. By choosing a higher deductible, you are assuming a larger amount of risk, which usually means lower rates for your home insurance. Claims that are valued below the deductible amount will not be covered by the insurer.
Discounts
Most home insurance providers offer several discounts, many of which are tied to factors that reduce risk. For example, an alarm system can discourage thieves or reduce the amount of time they’re willing to stay in your home taking and breaking things, thereby potentially reducing the loss amount.
It goes without saying that the cost of a high-value home insurance policy designed for a $1 million-dollar home will be greater than the cost of a standard mass-market policy designed for less valuable homes. The increased cost is not only because the insured value of the home is higher, but often also is the result of a premium location with greater geographic risk considerations.
While the costs vary, let’s go through an example of coverage costs for a $1 million home on Long Island New York. A fair estimate to use for this example is $0.41 per $100 of total insured value.
We will assume that this $1 million home has another $250,000 of “other structures” including a pool and that the personal property is valued at 50% of the home’s value, $500,000. Therefore, this $1 million Long Island home is insured in total for $1.75 million.
With $0.41 per $100 of coverage, this $1 million home would have an estimated annual premium of $7,175.
Here are the key factors that are used to determine the rate of an insurance policy for a $1 million dollar home:
- Location of home
- Construction type of home
- The cost to reconstruct your home
- Year built
- Your credit score or insurance score
- Your loss history
- Packaged home policy or standalone home policy
- Deductible
How To Estimate High-Value Home Replacement Costs by Square Foot
One simple way to estimate the cost of insuring a high-value home is to start with the property’s replacement cost per square foot. In New York, luxury properties often require premium construction materials and custom craftsmanship, which pushes rebuilding costs significantly higher than the national average. For 2025, a reasonable benchmark for upscale homes in the state is $550 per square foot.
To estimate your home’s replacement cost, multiply the square footage by $550. For example, a 5,000-square-foot luxury home would have an estimated replacement cost of $2,750,000. Once you know the replacement cost, you can apply the current average insurance rate per $100 of dwelling coverage (for 2025, approximately $0.41 per $100 of value) to estimate the annual premium.
Using our example:
- Replacement Cost: 5,000 sf × $550 = $2,750,000
- Contents: $2,750,000 × .5 = $1,375,000
- Other Structures: $2,750,000 × .25 = $687,500
- Total Insured Value: $4,812,500
- Estimated Premium: $4,812,500 ÷ 100 × $0.41 ≈ $19,731 annually
| Home Size (sq ft) | Replacement Cost | Contents Coverage (50%) | Other Structures (25%) | Total Insured Value | Estimated Annual Premium |
|---|---|---|---|---|---|
| 3000 | $1,650,000.00 | $825,000.00 | $412,500.00 | $2,887,500.00 | $11,839.00 |
| 4000 | $2,200,000.00 | $1,100,000.00 | $550,000.00 | $3,850,000.00 | $15,785.00 |
| 5000 | $2,750,000.00 | $1,375,000.00 | $687,500.00 | $4,812,500.00 | $19,731.00 |
| 6000 | $3,300,000.00 | $1,650,000.00 | $825,000.00 | $5,775,000.00 | $23,678.00 |
| 8000 | $4,400,000.00 | $2,200,000.00 | $1,100,000.00 | $7,700,000.00 | $31,570.00 |
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Cost of insurance for a $1 million home
The cost to insure a million-dollar home will vary a great deal based on location, the individual characteristics of each home and the unique needs of the homeowner. Not only do rates for million-dollar homes vary greatly around the country, but each high-value homeowner has their own individual considerations, requiring a customized high-value home insurance package.
Cost of insurance for a $2 million home
For a $2 million home, the same formula can be used to estimate the cost of home insurance, assuming $0.41 per $100 of coverage. The home itself would be insured for $2 million, the other structures would have an insured value of $500,000, and your personal property would be insured for up to $1 million. Your total insured value for your home is now $3.5 million, giving you an estimated insurance cost of $14,350 per year.
Cost of insurance for a $3 million home
By using the same formula, you can also estimate the cost of insuring a $3 million home, assuming a rate of $0.41 per $100 of coverage. In this case, the home would be insured for $3 million, with other structures having an insured value of $750,000, and personal property insured for up to $1.5 million. This brings your total insured value to $5.25 million, resulting in an estimated annual insurance cost of $23,100.
Cost of insurance for a $5 million home
To apply the same formula and assuming $0.41 per $100 of coverage for a $5 million home, you would assume that other structures on the property, including buildings and fences, are insured for 25% of the home’s insured value, or $1.25 million. For personal property, assume an insured value of 50% of the home’s insured value, or an additional $2.5 million. Now, you have a total insured value of $8.75 million and an estimated insurance cost of $35,875.
Cost of insurance for a $10 million home
For a home that’s insured for $10 million with a rate of $0.41 per $100 of insured dwelling value, the cost to insure the just the home might come in around $25,000 per year. However, that’s just the house itself. We’ll have to adjust that figure for other structures on your property as well as add some coverage for your personal property.
Let’s say your $10 million home has another $2.5 million in other structures on the property. Let’s also assume that your personal property, meaning your furniture, clothing, valuables, and household items, is valued at 50% of the home’s value, or another $5 million.
Now, your $10 million home has a total insured value of $17.5 million. At $0.41 per $100 of coverage, you can expect to pay about $71,750 annually to insure the home, other structures, and contents.
Compare High Value Home Insurance Packages
To combat a tightened market and raising rates, it’s more important than ever to partner with a broker who access to a full suite of carriers suited to your unique needs. The team at Coastal Insurance works with high value homeowners across the country to provide coverage solutions, even in a hard market. Reach out to our experienced advisors to access our exclusive suite of carriers and compare customized quotes. Our team of state licensed insurance advisors will help you compare rates from the finest insurance high net worth insurance companies like Chubb, Pure, Cincinnati, AIG, Vault, and Openly.
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Frequently Asked Questions
How can I estimate my high-value home insurance premium using square footage in 2025?
Using New Yok as an example, start by estimating your home’s replacement cost using $550 per square foot. Then add contents coverage at 50% of replacement cost and other structures coverage at 25% of replacement cost to get the total insured value. For 2025, you can apply an average insurance rate of $0.41 per $100 of total insured value to estimate your annual premium.
Example: The 5,000-square-foot home at $550 per square foot has a replacement cost of $2,750,000. Adding contents ($1,375,000) and other structures ($687,500) results in a total insured value of $4,812,500. At $0.41 per $100, the estimated annual premium is about $19,731.
What is the average cost to insure a multimillion-dollar home in 2025?
On average, homeowners insurance for a $1 million dwelling now runs around $7,412 per year, based on national data. However, your actual rate may vary greatly depending on location, property features, and coverage specifics.
How have insurance rates changed recently for luxury homes?
From mid-2020 to mid-2024, insurance premiums for mortgages of $1.5 million through Citizens Financial Group climbed 130%. If your property is in a climate-sensitive area—wildfire or hurricane zones—you may face notably higher cost increases or limited carrier options.
Why are high-value home insurance premiums rising so dramatically?
Premium spikes are driven by increased rebuilding costs, inflation, premium construction materials, rising climate-related losses, and insurers retreating from high-risk markets.
How can homeowners estimate replacement cost per square foot?
A quick method is multiplying your home’s square footage by local construction cost per. For multimillion-dollar homes with custom finishes, expect significantly higher per-square-foot rates. For example, a high value home in New York can be estimated at $550 per-square-foot.
Should I consider high-value homeowners insurance or specialty policies?
Yes, homes with replacement costs over $1.5 million often require specialized high-value policies designed for affluent homeowners, offering coverage beyond standard policies.
What steps can help reduce my high-value insurance premium?
Consider increasing your deductible, bundling policies, improving home safety features, securing extended or guaranteed replacement cost coverage, and regularly comparing quotes across carriers. Another option is to customize your personal property limit down to as low as 20% of your dwelling coverage.
