Protecting Your Home: 3 Insurance Trends for Luxury Homeowners

Insuring your high-value property is one of the first and most important steps in your homeownership journey. In some instances, a smart insurance strategy can be the difference between $500k per year vs. $100k per year. These strategies typically work best on properties that are high-value ($10M in reconstruction value and above) but not considered to be high-fire. Read on to understand three new trends we’ve noticed as carriers try to find a new way to enter the market.

High Wildfire Deductible

Most standard homeowners insurance policies will cover fire damage, but you’ll want to make sure you’re selecting the right type that can help offset the cost of repairs. You could be working with a carrier that might include a general deductible of 250k, but their wildfire deductible ranges anywhere from $1M - $3M. These higher deductibles for wildfire claims can help significantly reduce the annual cost of insurance.

Cost Sharing With Clients

Cost-sharing can benefit the insurance company and the policyholder because it offers you a lower premium. In this scenario, a carrier could agree to cover 80% of the payout in the event of a claim, while the client would agree to cover the remaining 20%. This can work with a loan, too - as long as the loan value is less than the portion that the insurance company agrees to cover.

Insured Cap and Layering

Insured caps can be one of the most important concepts to understand when navigating your insurance portfolio. You could choose to insure the first $12M of your property, even if the agreed-upon reconstruction cost is $15M. When the loan value is less than the insured value, this is an option - even if all parties agree that the building is not insured to full value.

Similarly, layering risks is common practice in the commercial insurance market. Even though this hasn’t always been widely available in the home insurance market, we saw it pop up in 2022, and we’re beginning to see instances where three or four companies can be involved to layer on top of one another to insure a property to the full reconstruction value.

How Weiser Can Help

Our top priority is to give our clients custom insurance solutions that are right for their lifestyle and future. We understand that peace of mind comes from knowing everything you love is protected. At the Weiser Agency, we make sure new trends are identified as they pop up - enabling us to provide excellent coverage and the peace of mind everyone deserves.