Talking of real estate, it is common knowledge that the term “real estate” refers to property that can be owned, occupied, transferred, or sold legally. It is made up of land and buildings or other natural resources on it. Building types and characteristics do vary from place to place due to several different contributing factors.
For as many people who have high specs, a luxurious home is a choice that they would go for. Characteristically, a home is set to be luxurious based on its location, architectural design, interior furnishing, environmental security, indoor and outdoor attractions, etc. All those do not matter to a real estate agent as much as the price.
Hence, talking from a realtor’s point of view, a luxurious home is one whose value averages US$500,000 – 1,000,000 and above. Life is all about risks, but some risks are grievous than others. A life without insurance is a dangerous gamble. Here are 9 facts that are to be known about luxury real estate insurance according to distinguished.com.
1. Luxury homes require special insurance carriers
Luxury insurance is covered by special coverage carriers that deal with high-value assets. Going to those who do not specialize in this type of claim would undervalue your home, thereby making recovery difficult or insufficient when a disaster happens. Specialty carriers are insurance companies that specialize in luxury homes that value for US$ 1M and above.
There are several of them. These carriers are who to look out for. Even when going through an agent, be specific with insurance carriers whose specialties are in luxurious assets such as homes, jewelry, cars, and so on.
2. Different protection levels
Insurance is for protection of properties, and where a luxury real estate is concerned, the insurance protection policy to be employed depends on details. These details show what type of damage the protection is covering exactly. This is great to know, because, according to Warhurst Law, you can avoid some occasional disputes.
Here, the type of coverage is selected. Some Luxury real estate insurance types to choose from are; property and casualty general liability, flood/water damage, Umbrella liability insurance, etc. these insurance types cover all forms of dangerous threats to a property that can be considered not too extreme.
3. Exclusion of some losses from the chosen insurance policy
No matter the insurance policy type selected, it can’t cover all forms of losses, and neither can it serve protection against all forms of potential danger to the insured luxury real estate. A real estate owner who wants total covering may have to go for all the cover options provided, and that may not be a good deal for the pocket.
Therefore, it is advisable to go for cover for the likeliest property threats. A look into the history of the property, its location, and form can help you make a good choice.
4. The Coverages go higher
The coverage for luxury real estate insurance is higher than the regular policies. It goes from about $1M to $50M, which makes sense because you are covering for high-value assets.
Keeping this price point in mind will also let you know the surest luxury real estate insurance carrier; once you see that their price coverage runs below the value of your assets or the figure given here, then you have to walk away.
5. There is a way to shop
Getting luxury home insurance may be difficult. Hence, getting an agent is the surest way to go. Usually, agents work for multiple carriers. Hence, talking to an agent is more profitable than looking for independent carriers. An agent has different offers from different carriers, and they have adequate knowledge about each one.
They are able to educate you on the available coverages and you can decide which premium coverage is best for you. A common fear that arises in the mind of many is that agents would want to be settled, thereby increasing the cost.
Well, that is not so, not anymore. The carriers are the ones who pay an agent from the premium service; therefore, there is no need to worry about paying an agent.
6. Claim denial due to poor maintenance
The insurance company might deny protection claim for the insured property if the damage that occurs arose as a result of the owner’s negligence and poor maintenance. For example, a property owner has been noticing an obvious blockage building in a waterway around the property, which, if not amended, could result in flooding, but the owner refused to take any step to mitigate the situation. If flooding occurs in a circumstance like this, the insurance company can deny the real estate owner the cover claim, as the damage isn’t accidental.
7. Change in property nature may need a change in claim coverage limit
Over time, the nature of the insured property may change, and this may result in rendering the coverage limit earlier settled to be insufficient. Therefore, it is needful to provide the insurance agent or your carrier with up-to-date information on the property, letting them know of the changes and verify if the change is still within the sufficiency of the insurance coverage limit.
8. Some extreme circumstances may still never get covered
No matter the insurance plan(s), extreme circumstances like where damages occur as a result of terrorism, acts of war, may never be covered in luxury property insurance. Sometimes earthquakes, tsunamis, etc. are also excluded.
9. In and out servant coverage
In and out servant coverage becomes important because of the size of luxury homes. The homes are usually large and would require a group of staff to manage them. Hence, the luxury home comes with coverage for the staff.
While no one hopes for an accident to happen to anyone, the possibility of accidents is why we insure our properties, right? So, it is important to cover for the staff, too. Although this coverage is not needed for normal homes.
To make a good luxury real estate insurance plan, it is vital to understand the simple facts explained here.