How Much is Insurance on a $2,000,000 House?
Ensuring a high-value home, one which is priced at $2,000,000 will often involve more complexities than insuring a $500,000 home. High-value homeowners insurance policies are often crafted to address the unique needs of a more expensive property and the unique needs of the owners themselves. If you’re considering purchasing a house which is $2,000,000 or more, or you already own a home which is $2,000,000 or more, you’ll want to read this latest post from the team at Portsmouth Atlantic Insurance. This post will help to explore what affects the cost of insuring a $2,000,000 home and what you may be able to expect in terms of premiums.
Factors Influencing Insurance Costs
Location:
Location, location, location. It really does affect the costs of insurance, especially homeowners insurance. Homes which are in areas which are prone to natural disasters such as hurricanes, earthquakes, wildfires, etc… will likely see much higher insurance premiums where there are significantly less risks involved.
Size & Construction Quality:
A $2,000,000 home will likely be larger than a $500,000 home in most cases (area-dependent of course). With this larger space and higher-quality construction materials, there’s more risk for the insurer, and therefore there will be higher premiums. Custom features such exotic stone flooring, custom woodwork, and other high-end finishes will likely increase repair costs, and therefore increase insurer’s costs in order to protect themselves from risk and loss.
Age of the Home:
The age of the home will likely greatly affect the homeowners insurance premiums. Newer construction homes will likely cost less to repair than older construction homes, as there will likely be more issues with the electrical systems, the plumbing, and the roofing with older homes when compared to new homes. Older homes which are $2,000,000+ will be even more expensive with their premiums compared to newer homes which are $2,000,000+.
Safety Features & Upgrades:
Homes which are equipped with the right level of safety features and upgrades will typically have reduced premiums, as this helps the insurer if there’s ever an act of burglary, a fire, or some type of other incident which could affect your $2,000,000 home. Upgrades such as reinforced roofing and storm shutters will likely help to reduce insurance costs as well.
Coverage Options:
The amount and type of coverage you’ll need for your $2,000,000 home will directly impact your premiums. High-value homes will more often than not require policies with higher coverage limits, not only for the structure of the home itself, but also for the personal contents within the home, added liability expenses, and additional living expenses should the residents of the $2,000,000 home become displaced due to a qualifying event.
Deductibles:
Choosing a higher deductible may lower your insurance premiums. Homeowners who own high-value properties may sometimes opt for the higher deductible option, simply, because they can afford to cover more out-of-pocket expenses than the average person, and this can reduce their overall insurance costs.
Estimating Insurance Costs
For a $2,000,000 home, insurance costs may vary widely based on the factors mentioned above. However, as a rough estimate, homeowners may expect to pay between 0.05% to 0.25% of the home’s value in annual premiums. For a $2,000,000 home, this could mean insurance premiums which could cost between $1,000 to $5,000 annually, though premiums could be higher or lower depending on individual circumstances, location, needs, and weather patterns.
Tips for Insuring a High-Value Home
Shop Around:
It’s generally advisable to compare and contrast quotes from several different homeowners insurance providers who specialize in high-value homes. This will help ensure you’re receiving the best coverage for a reasonable price.
Consider a Package Policy:
Some insurance companies will be able to offer a package deal which includes home insurance, auto insurance, and liability insurance all bundled together. Insurers will generally give decent discounts when you choose to insure all of the above under the same company.
Regularly Review Your Policy:
As your home ideally increases in value over time, or you make significant improvements to your home, increasing the value; you’ll want to review your homeowners insurance policy. This will help to ensure your coverage remains adequate, even with the changes involved.
Choose Portsmouth Atlantic Insurance for Your Homeowners Insurance Needs Today
The cost of insuring a $2,000,000 home is greatly influenced by factors listed throughout this post. Location, construction, safety features, and the chosen deductible and coverage options will determine the price of the premium. Through having a better understanding of these factors, and choosing to work with insurance providers who specialize in high-value properties, homeowners who own a $2,000,000+ home can better secure adequate coverage which better reflects the value and needs of their investment. Feel free to contact us should you have any questions or need assistance with finding the right coverage for your home and we’ll be happy to help. We look forward to hearing from you soon!