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What Does High Value Mean in California?
Let’s face it, California is not a cheap place to live. Just about anywhere you look home prices are way above national averages. Rising home values are creating a new concern for many California home owners. Because an increasing number them are finding their homes classified as HIGH VALUE. But does that mean your home requires HIGH VALUE INSURANCE?
High Value Insurance is related to dwelling replacement cost not the purchase price or square footage. So, the calculation method for replacement costs illustrated on the “Home Insurance” page of this website is not usually used for high value luxury homes. If your home has a dwelling replacement cost of at least $1,250,000, you probably need High Value Insurance.
The demand seen in the High Value Home market in California has been on a crazy climb the last 5 years. Rebuild costs have risen due to shortages in materials and a high demand for labor and contractors. At the same time, the number of insurance companies offering insurance for this market has declined significantly. Many, whom had been consistent in writing policies for these homes in past, have recently divested from this unique risk market. Because of this, a majority of insurance companies now only write to a max dwelling replacement of $1,000,000 – $2,000,000. Only a handful of insurance companies remain who will write policies for high value homes and even less who are charging reasonable prices.
High Value Home Insurance
Here are some of the factors that insurance companies take into consideration when formulating an insurance package for these beautiful homes:
- Location – rural, congested, on a hillside, ACCESS
- Unique and high end materials are more sensitive to price increases and availability
- Age of home, will it have to be brought up to new building codes if destroyed?
- Age of roof and plumbing
- Brush / Fire concerns
- Other concerns from mother nature
- Monitored Alarm Systems and Distance from Fire Department & Fire Hydrant
If you find your home in need of high value insurance, do your due diligence and be sure you’re comfortable with your agent. Because they are your main ally in obtaining correct and adequate coverage. Please don’t hesitate to contact Chris at (619) 980-7263 if you have questions. He will be happy to help you determine the proper level of home insurance to ensure adequate coverage for rebuilding in the event of a loss.
