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Do you need high value home insurance?


What is a high value home? It’s a relative term, of course, and it might be a moot point whether a particular home is high value compared to another.

What most of us are going to agree on, however, is that a high value home is going to be a prestige home, one of a kind, and probably owned by someone of personal high net worth.

Specialist home insurance is likely to be the cover bought by discerning individuals who recognise the considerable investment locked into certain high value homes.

What are the numbers?

According to a story in the Guardian newspaper, there are more than half a million homes in the UK with a market value exceeding £1 million and that figure looks set to more than triple – to 1.6 million – by the year 2030.

Indeed, in the first half of 2016 the number of homes valued at more than £1 million rose 12% faster than in the same period in the previous year, said the BBC on the 5th of November 2016.

Even though the number of what are clearly high value homes is increasing, each one is an individual, out of the ordinary and prestige property. Those distinct and unique characteristics is what sets this category of home apart from others.

High value home insurance

Because this category of home is so distinct, it requires a special form of high value home insurance to provide the protection needed for both the structure and fabric of the building – and almost inevitably, its contents too.

Safeguarding the building itself, of course, is likely to be the priority and this requires a careful valuation – in the case of a high value home, one that is carried out by professional surveyors or valuers – of the cost of reconstruction or reinstatement in the event of loss or damage.

On that score, it is also important to remember the distinction between market value and reinstatement value – a subject we discuss in our knowledge base here at UKinsuranceNET. That is to say, the total building sum insured needs to be sufficient to cover the cost of completely reconstructing the property in the event of a major, devastating loss. In the case of many high value homes – such as thatched roof properties, listed buildings and other homes of non standard construction – rebuilding costs need to reflect these factors.

High value homes typically contain high value contents – reflecting the owner’s invariable high net worth. This also highlights the specialist nature of high value home insurance, with contents cover that may need to extend to collections of fine art, other collectibles and maybe even the contents of the wine cellar.

High value homes may also be more vulnerable than most to public liability claims.

As the property owner, you may be held liable, and ordered to pay hefty compensation, if a visitor, neighbour or member of the public is injured or has their own property damaged through any kind of contact with your home. If the home itself is high value, the presumption by any claimant is likely to be that you are also especially wealthy, and this might be reflected in the size of any claim. The £1 million indemnity typically incorporated in ordinary home insurance policies might therefore be upgraded to provide £5 million or even £10 million of cover.