Texans sells their current home on average every three to five years. When they do, they typically move in to a bigger home. Bigger homes come with more value and it's not uncommon for them eventually approach or exceed the million dollar range. As they move up that price scale, the needs for home insurance change and at some point you change how you view your home insurance.
What Is A High Value Home?
For most insurance companies, when the reconstruction costs (dwelling value) of your home move beyond the range of $750,000 to $1,000,000 they begin to view your coverage differently. Your home's resale value will include the property that it sits upon, which include the dirt. Insurance companies don't insure dirt, so they don't include that in your dwelling value. It's a subtle, but very important distinction to keep in mind. The definition of high value is not the same for each home insurance company, but once we hit the $750,000 mark it definitely begins to kick in Dallas/Ft Worth. And once we hit the $1,000,000 mark it's time to discuss very specific needs.
Why Is Insuring A High Value Home Different?
Homes in North Texas are often times built in volume by big home builders like History Maker Homes among others. Those companies like History Maker do a great job at what they do, but the construction methods and finish outs tend to be different than a high value home because of the repeatable nature of their business. They purchase supplies in bulk to get competitive pricing and work from a series of very specific floor plans. This works well, but does not account for the uniqueness that typically goes into a higher value home. Custom builders will use varied and unique floor plans, materials, and finish out items. This can range from imported Italian marble for your bathroom to centralized smart home systems that include water shut off valves. Not only are some of these items harder to source, they also change how your home is protected.
Items that are harder to source tend to cost more and have specialized contractors who can complete the work. As a result, the cost to replace or repair can escalate in a hurry. Given that price curve, the insurance company will generally do both an internal and external inspection of your home. They want to make sure that they have enough coverage in place to truly replace the stucco walls, 20 foot ceilings, custom built in cabinetry, or other items that you absolutely love in your home.
The whole house systems also come with a cost, but more importantly they work to protect your investment. Enhanced smart home products will work to make your home more efficient and safer. Having the entire home set up with sprinklers and heat/fire monitoring, monitoring the water flow and pressure to keep an eye on potential flooding, and having full surveillance systems tied to a central monitoring system will provide substantial discounts since they will help reduce the effects of a potential claim situations.
So What Else Is There To Consider?
The other major thing to consider is claims handling. Generally speaking, the insurance companies that specialize in high value homes put a major emphasis upon creating the most customer friendly claim experience possible. They understand that a 1% wind and hail deductible is a hefty price tag on a home over $1,000,000. They understand that it's more important to have some price stability rather than acquiring market share and then raising rates by 15% to 20% each year. They understand that you have options and the ability to change. As a result, they will include these factors in the policy and the premiums that they put in front of you.
It's important to understand the differences between insurance companies and what they offer you. As an independent insurance agent headquartered in Colleyville, we can work with you to make sure that your home and possessions are properly protected against loss. We can customize a plan just for you and your family, while also protecting the other things that you value. Schedule a time to talk to us today!