Your House Is Your Castle ... Protecting Your High-Value Home

Over the past decade or so, insurance companies have put together, and continue to revise, specialized programs for higher-valued homes. The added benefits of these programs leaves a "plain vanilla" homeowners policy in the dust. And with the some of the newly introduced discounts now available, whether your home is valued at $500,000, $1,000,000 or higher, it is certainly worthwhile considering one.

Just like buying a car, you could purchase a basic policy, then add most of these options separately, but it becomes much more economical when these extras are included as "standard". Here are some of the key benefits of these types of programs, along with some important things to keep in mind when buying insurance on a high-value home:

Getting the Right Replacement Value - One of the biggest benefits of a high-value homeowner policy is the carrier goes above and beyond to be sure to get an accurate fix on what your house would cost to rebuild. They typically conduct a thorough inspection of the property, take measurements, photographs, and put together a formal appraisal for your records. With a standard homeowners policy you're often on your own to come up with the proper value. A good agent can help, but a professional appraisal is better.

Guaranteed Replacement - With a standard homeowners policy, often the company will not pay more to replace your home than the limit shown on the policy. What you see is what you get. Some improved homeowners policies will provide an extension of 10-25% above the policy limit to provide some extra "cushion". A high-value homeowner policy, however, "guarantees" they will rebuild or replace ... period, regardless of the cost. A cushion is OK, but a guarantee is far superior.

Rebuilding to Code - Most homeowner policies offer only a small percentage of the dwelling amount or have a set dollar limit to cover the additional costs to rebuild to new or revised building codes. Depending on the age of the house and the municipality's building codes, the costs of these upgrades could be enormous. Most high-value home policies provide unlimited coverage to rebuild to code.

"Cash-Out" Settlement Option - If you've ever had a significant loss from fire, water or smoke damage, you may have experience with how these claims are usually handled. For personal property, the company will first pay only a depreciated amount, and only reimburse for full replacement cost when you actually replace the property. That's right ... the company says show me the receipt, and then and only then, will we pay the full replacement cost. This is an extremely grueling process, leaves lots of room for error, and is enough to drive even the most patient person absolutely crazy. The beauty of most high-value home policies is you have the option to receive a cash settlement, and you are not forced to replace the item in order to be paid full replacement value.

"Special Form" Contents Coverage - Standard homeowners policies cover contents only against a specific list of 'perils'. If you have trouble sleeping some night, pull out your policy and take a look. You'll see a list of perils including fire, lightning, windstorm, theft, etc. If what caused damage to your contents isn't on that list, you're not covered. You could think of an endless number of things that could happen that don't appear on that list of perils, and believe me when I tell you they seem to happen a lot more than you'd think. The high-value home policy, however, covers contents the same way it covers the building ... for all perils, except what is specifically excluded within the policy. That's a world of difference in coverage.

The list of "standard" goodies included automatically in most High-Value Homeowners policies goes on, including identity theft, mold damage and removal, higher limits on jewelry, silverware and fine art, as well as extra liability coverages from libel and slander to alleged harassment or discrimination against a household employee. Another big advantage is the insurance company's willingness to go along with unusual exposures, such as coastal summer homes, high-performance boats and exotic automobiles.

If your home is valued at $500,000 or greater, this type of policy is definitely worth a look-see. The best part ... a high-quality program like this may not cost much more than going with "regular". Combine your homeowners and auto insurance with the same carrier and you may find you can actually get more for less. Now THAT's worth talking about!