Luxury Home Insurance
Just as elite and expensive cars require special insurance, so too do the luxury homes of Malibu. From an insurer’s point of view, however, a house isn’t a luxury home just because it came with a high price or an enormous amount of square footage. Instead, a luxury home must have one or more of the following features: fine architectural detailing or uncommon construction details, high-quality construction, significant age, and contents that include fine art, collectibles or antiques. If your home meets this description, you should be shopping for a luxury home policy.
While all luxury home policies still cover all of the same perils and conditions as basic homeowners insurance policies, albeit at higher limits and values, there are certain things you must discuss with an agent up-front. Specifically, they are:
· Contents: Be sure that your policy will give you enough to replace, not just your home, but also its contents, including valuable collectibles, antiques, and art. Go over each type of personal property and ask how the policy valuation clause works. Just last week I walked it to a Malibu Beach home with an impressive Warhol collection of Art.
· You want a policy with guaranteed replacement cost on the structure itself with no limit, and replacement cost on the contents without limits like “actual cash value” on antiques. You will need to pay special attention to the limits on sub-classes of contents, like furs, jewelry, and silver, as well. Go in with an itemized list, if possible, and keep your list current as annual renewal dates roll around.
· Age: With antique homes, it is imperative that you make sure your policy will pay to upgrade the construction to meet current building codes after a loss. This includes upgrades in undamaged portions of the house, if local building authorities so mandate.
· Appraisal: While many insurance companies use a copy of the real estate appraisal done when you built or bought your house, with a luxury or antique home you may be better served if the insurer sends an appraiser of their own out to assess your property, and document not just the value, but also the construction details of your home. This will go a long way toward expediting your settlement if a loss occurs and you must make a claim. It will also insure that your coverage is really enough to replace your home in the event of a total loss.
Luxury home policies will cover every normal peril named on a standard homeowners insurance policy, but one thing they do not generally include is coverage for mudslides. Mudslides and landslides are considered flood-related perils, and are usually only covered within flood insurance policies, something you should consider adding to your insurance portfolio, especially if your home is in a flood zone.
Finding cheap insurance on a luxury home and its special contents, is more difficult than insuring the average single family home in a suburban subdivision, but this is because both the structure and the items inside cost more to replace. By being an active participant in the process, you will ensure that your home insurance meets your needs.
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