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Is Luxury Home Insurance Worth It?

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Published
04/17/2020

Building a home in Texas could be one of the most significant investments you could ever make in a lifetime. When you have such a valuable investment, you would want to protect it the best way possible. Sometimes, standard home insurance won’t be enough. Some builders suggest getting insurance coverage specifically tailored for luxury homes. But the question is -- would it be worth the price?

What Is Luxury Home Insurance?

Luxury home insurance or high-value home insurance is a type of policy that provides a higher quality of coverage for buildings that are deemed of higher value than average. They could be heritage homes or unique homes that feature special or unique design elements. It has comprehensive insurance coverage that you could never find in any standard home insurance. This luxury home insurance is also available for rental homes and luxury condominiums.

Do You Need to Look For Luxury Home Insurance?

Not because you want and can afford it, you can have it. Not all homes can qualify for luxury home insurance since they are exclusively for dwellings that come with a high reconstruction value. You should opt for luxury home insurance if:

  • The cost of your home is worth about $750,000 or more.
  • The home’s design elements cannot be found in an average home. For instance, a particular design was executed by a famous architect or interior designer.
  • You have a heritage home that features construction methods that are no longer practiced.
  • You have a priceless collection of jewelry, fine arts, wines, and rugs that you keep in your home.
  • You installed fixtures, decorations, and appliances that come from specialized stores from abroad.
  • Your home’s roofing is non-standard, such as copper, metal, or clay.
  • Your home is green and you made investments in eco-friendly design.
  • You have unique features in your home, such as landscaping, swimming pools, guest houses, and modern technology.

What Does Luxury Home Insurance Cover?

Those who have luxury home insurance do so because they have more extensive coverage limits and additional benefits.

For one, insurance companies would begin by a home inspection to double-check if your home indeed has the reported value. The home inspection is also a way to verify the guaranteed replacement value of your home.

One of the significant differences between standard home insurance and luxury home insurance is the higher policy limits for:

  • Reconstruction costs
  • Structural repair or replacement
  • Collectibles such as antiques, fine arts, jewelry, and even money
  • Home items used for business
  • Functional or ornamental landscaping
  • Living expenses during the restoration
  • Cyber protection in case of stolen digital assets
 

In most cases, homeowners are after the higher living expenses limit while the home is undergoing renovation. It allows them to continue living a life that matches their standard way of living. Often, some homeowners would choose to pay affordable electricity rates in Texas but a higher premium for insurance.

Standard home insurance often has a limit on the amount payable for lost items that are part of a set or a pair. Luxury home insurance gives the assurance that the whole set gets replaced even if only one thing is lost. This limit could be useful if you have a partial loss in one part of your home. For example, your kitchen had a fire. Standard home insurance will not replace the entire kitchen. They will only shoulder the cost of repairing the damaged areas. This can be a problem if you want to maintain a seamless look in your kitchen. With luxury home insurance policies, insurance companies understand that you have to achieve a complete design element. That’s why they are willing to cover the items even if they were not damaged.

Getting luxury home insurance is worth it if you want to protect your investments. In the end, the higher premiums would pay out if anything should happen to your home.

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