Alternatives To Traditional High Value Home Insurance Options

High value home insurance lines cover the costs associated with insuring expensive homes. Every insurance company sets different qualification limits for "high value home insurance," depending on the location.  Policies typically start at $300,000. If a home is significantly over-valued, in comparison to it's neighborhood, high value home insurance is typically required. Overvalued homes are costly to maintain and insure.

Bundle Your Policies

One of the simplest ways to save on insurance is to buy multiple policies with one company. High value homeowners usually have expensive auto insurance and may have water crafts or recreational vehicles. Insuring all of these items with the same company can mean unique discounts. You will also receive discounts on your home insurance each time you renew with the same company. 

Self-Insure Specific Lines

Some specific high value lines carry high premiums, but very low risk. For example, the cost to insure an expensive tile roof on a Spanish-style mansion may be expensive. However, if the home is brand new and was constructed with the highest possible standards, the claim can be low. Newer, more expensive homes have less incidence of damage due to storms or wind. Consider self-insuring this type of risk. You may also self-insure risks to items you can afford to replace outright. For example, if you have a fountain in your front yard assessed at $6,000, you can probably afford to cover the cost to replace the entire water feature yourself. Try to keep items you can pay for, off your insurance policy to reduce the expense.

Insurance A La Carte

New homes have unique risks, and high value home insurance often falls short. It is expensive to cover theft in a high value home, for example, because the items in these homes are typically more valuable. Security systems or gated communities can significantly reduce risks and insurance companies take special features into consideration, but often, not enough consideration is given. Purchase low coverage for theft and a higher coverage for liability. Liability is often much higher in expensive homes. Select your policy carefully to reduce your cost.

Form a Legal Structure

If you own multiple properties, you can consider using a LLC, limited liability corporation, or LP, limited partnership, to own the assets. LLCs and LPs are legal structures that absolve risk. Purchasing a property under a legal corporation can protect you from liability and lower your insurance costs. Additionally, you can add family members and include their homes into the corporation and reduce your cost of insurance. These types of formations are used by property developers as a means of reducing risk.

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