Home Insurance

Home insurance for high-value properties has become one of the most disruptive and rapidly changing costs in the homeownership stack. In markets previously considered desirable and stable — coastal California, Florida, Louisiana, parts of Colorado — major insurers have exited the market or dramatically increased premiums in response to wildfire, hurricane, and flood risk recalculations. For buyers in affected markets, insurance has moved from a predictable line item to a material uncertainty that affects purchase decisions.

Standard homeowner’s policies from major carriers become inadequate for high-value properties in ways that aren’t always obvious. A replacement cost policy that’s priced based on the square footage cost to rebuild may significantly underestimate what it actually costs to reconstruct a custom home with premium finishes to its original standard. High-value home insurance specialists — Chubb Masterpiece, AIG Private Client, PURE, Cincinnati Financial — offer policies specifically designed for homes valued above $1 million that include guaranteed replacement cost, broader coverage for valuables, and enhanced liability coverage.

Premium ranges vary significantly by market and property type. A $2 million home in a low-risk market with a reputable specialty insurer runs $4,000–$8,000 annually. The same home in coastal Florida may cost $20,000–$40,000, if coverage is obtainable at all from a private carrier — many homeowners in high-risk Florida markets have been forced onto Citizens Property Insurance, the state’s insurer of last resort, with its own coverage limitations. Wildfire-exposed California properties face similar market dynamics.

Flood insurance is a separate policy from homeowner’s coverage and is required by lenders for properties in FEMA-designated flood zones. National Flood Insurance Program policies cap at $250,000 in building coverage, which is inadequate for most high-value properties — private flood insurance fills the gap but varies widely in availability and pricing. The full picture of ongoing ownership costs lives in the Real Estate pillar, alongside property tax and HOA & upkeep.