In many cases, high-value home insurance costs less per dollar of coverage compared to standard home policies. On the other hand, there’s more to insure, so coverage costs can add up quickly.
The good news is that your high-value policy offers more ways to customize, giving you the freedom to optimize your coverage to match your needs and priorities while saving money.
Protecting your home, family, and belongings is always the top priority, but often you can tweak your policy’s “default settings” to cover your home cost effectively without sacrificing the core protection you need.
Below are the top three ways to lower your high-value home insurance cost. Many households can take advantage of one or more of these hacks, and some might be able to utilize all three to maximize savings.
1. Adjust Coverage for Other Structures
Coverage for the buildings on your property is split between two coverage types on your policy. Your home itself is covered by “dwelling coverage”, also called Coverage A, while other structures on your property fall under Coverage B, aptly named “coverage for other structures.”
These other structures might include fencing, detached garages, pool houses, hardscaping, tennis courts, or gazebos.
Most standard home insurance policies set coverage for other structures at 10% of the home’s insured value. By contrast, a high-value home insurance policy usually uses a default coverage amount set at 20% of the home’s insured value.
For example, if your home is insured for $10 million, your high-value home insurance policy might have a $2 million coverage limit for other structures. But what if the other structures on your property are minimal? You might not need $2 million in coverage.
With many high-value policies, you can adjust your Coverage B limit as low as 5% of the home’s insured value. In the example above, you could reduce Coverage B from $2 million to $500,000, also reducing your premium
2. Fine-Tune Your Personal Property Coverage
In the insurance world, personal property refers to the things you own that aren’t a part of your home. Think of your furnishings, clothing, and appliances, electronics, and jewelry.
With a standard home insurance policy, you’re often stuck with a fixed minimum coverage limit for personal property coverage, often 50% to 70% of your home’s insured value. However, a high-value home insurance policy offers more customization options. Some carriers give you the ability to adjust coverage for personal property to as low as 20% of your home’s insured value. This latitude can be especially helpful if your home’s insured value is much higher relative to the value of your belongings.
For example, if your home is insured for $10 million, but your personal property is worth about $2 million, you can adjust your personal property coverage to $2 million rather than the default coverage amounts for the policy, often set between 50% to 70% of the home’s insured value.
In a covered claim, the insurer will cover your actual loss rather than the maximum insured value, so it makes sense to match your coverage limits to your exposure as closely as possible. A high-value home insurance policy gives you the freedom to choose the limits that suit your situation.
3. Choose Claims Carefully
Insurers look at hundreds or even thousands of data points to predict the risk of a payable claim. In effect, we’re all a bit risky from an insurer’s standpoint, but insurers aren’t sure just how risky — yet. Insurance premiums reflect this estimated risk, combined with the insured value for the policy.
Placing a claim can bring our individual or household risk level into sharper focus, possibly leading to higher rates at renewal. Often, the best way to think of insurance is as protection against larger losses, particularly if you have the financial ability to cover smaller losses.
Placing claims for smaller losses can cause higher overall costs for the losses we really need to insure against, the big ones. It may be more prudent to pay for some low-value losses out of pocket as they arise, even if your policy can provide coverage for the loss.
Bonus Money-Saving Home Insurance Hacks
High-value policies bring more flexibility in policy options compared to traditional policies and even offer some ways to save that you might not expect. For example, in some cases, you can increase coverage in certain areas while reducing your overall cost of coverage.
Here are two examples.
- Choose higher umbrella coverage limits. With some high-value carriers, if you increase your personal umbrella coverage from $2 million to $5 million, you can earn a higher discount which may be high enough to cover the cost of the increased coverage limit and could even reduce your overall cost of coverage. In short, you may be able to get more coverage for less money.
- Choose a higher jewelry floater. With some carriers, if you add a jewelry floater to the policy over a certain value threshold, the discount you would receive on the homeowner policy would result in a net savings overall. Again, you may qualify for more coverage while also reducing premiums. Ask your insurance advisor if this strategy is right for you.
Other Ways to Save on Your High-Value Home Insurance Policy
Each household has different coverage needs and priorities. The best way to customize your policy to fit like a glove is to utilize periodic policy reviews.
Your insurance needs today likely differ from just a few years ago. A personalized policy review gives you a chance to adjust your coverage to meet life’s changes.
Often, the results of a policy review are twofold.
First, you’ll likely find some areas where your policies can be adjusted to protect your home and family more efficiently. However, you might also uncover gaps in coverage that have emerged over time.
The end result is that you can save money on your overall premiums in many cases while also investing some of those savings in better ways to safeguard the success you’ve built.
Here are some additional ways to reduce your premiums.
- Increase deductibles. The deductible is the part of the claim paid by the policyholder. In effect, deductibles act as a limited form of self-insurance. By choosing a higher deductible, you’re assuming more risk but can also save on premiums.
- Check inflation guard coverage. Many high-value home insurance policies offer an option called inflation guard, which adjusts the insured value of your home automatically to account for inflation-driven increases in rebuild cost. This option helps to prevent underinsurance but can leave you over insured in some situations because automatic adjustments aren’t always a precise tool. As part of your periodic review, ask your agent to calculate the current rebuild cost. This step sets a new base from which the inflation guard on your policy can adjust going forward.
- Bundle up. Most insurers offer extra discounts if you purchase more than one type of policy from the same insurer. For example, you might earn an extra discount on your policies if you combine auto and home insurance with the same insurer. Inquire about available discounts for other policies as well, including boats, valuables, or personal liability policies. In some cases, you may be able to save up to 45% for some insurance need.
- Compare quotes. High-value insurers offer similar coverage options, but you may find significant differences in premiums from one insurer to the next. This cost disparity often stems from the insurer’s focus, meaning the type of business they want to attract. By comparing quotes, you can find an insurer that has an appetite for your particular coverage needs or risk profile, possibly saving thousands.
Reach Out to the Experienced Advisors at Coastal Insurance
Successful households have special insurance considerations. From the value of the home itself to personal property and even liability risks, there’s simply more at stake. At Coastal Insurance Solutions, we work with high-net-worth households across the nation to protect your home, your family, and your unique lifestyle.
To learn more or to review your existing coverage, reach out to the expert insurance advisors at Coastal Insurance Solutions today. Our experienced high-value home insurance advisors work with successful households to design a customized coverage solution matched to your needs and priorities – at the best price possible. Protecting your legacy is our top priority.
Connect with our concierge team of luxury home insurance advisors to learn more about the best ways to protect your home and lifestyle. Our team of state licensed insurance advisors will help you compare rates from the finest insurance luxury home insurance companies like Chubb, Pure, AIG, Cincinnati, Openly and Vault
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