How Much Does it Cost to Insure a Multimillion-Dollar Home?

Table of Content

• Cost of insurance for a $10 million home
• High-Value Home Insurance vs. Standard Home Insurance
• Frequently asked questions: Homeowners insurance rates
• The Cost of Insuring Your Million Dollar Home with a Mainstream Insurer
• What is included in a home insurance rate?
• What Are Considered for Home Insurance for 1 Million- Dollar House

The kind of insurance policy you need does not just cover your house. Accordingly, it also touches on details that are integral parts of your property. A million-dollar house comes with a unique set of insurance premiums. Your insurers do not want you to be underinsured so that the insurance cost may be higher. These details are necessary for deciding whether the price of your insurance would go up or down, year built, credit score, deductible, personal items, and other valuables. The states with the least expensive average annual homeowners insurance premiums are Hawaii, Utah, Vermont, Delaware and Oregon.

Most mortgages are set up with an escrow account, which means that the mortgage company collects a portion of your home insurance premiums in your monthly payment. These amounts will be saved in your escrow account and the mortgage company will then pay your home insurance and property taxes when they come due. A more expensive home insurance policy will mean that your mortgage company needs to collect more money from you monthly, so your mortgage payment could be higher.

Cost of insurance for a $10 million home

States with frequent hurricanes, hailstorms, tornadoes and earthquakes tend to have higher home insurance rates. To get the best rates for your situation, shop around with at least three insurance companies. By comparing rates from multiple insurers, you can make sure you’re getting the best possible coverage at the lowest price. High-value home insurance policies provide liability coverage, just like a standard policy, and you can choose a coverage limit.

The average home insurance ratenationwide is $2,777 a year, according to 2022 Insurance.com data. Of the many things that affect the cost of home insurance, where you live is one of the biggest. Home insurance costs in each state are affected by things like extreme weather and the cost of building materials. After all, many provide coverage for most of the same perils, or causes of loss. However, what you might not realize is that you may be overpaying to be underinsured. Premier carriers offer many additional benefits, services, and features specifically tailored to meet the needs of a select group of clients that mainstream carriers do not.

High-Value Home Insurance vs. Standard Home Insurance

If you bump up your deductible from $500 to $1,000 or higher, it will lower your rates a bit. You take on more of the financial burden if you file a claim, which translates to a lower premium. It covers minor injuries to people who aren’t household members—for instance, a guest who slips on icy steps.

Its average annual rate is 61% higher than the national average home insurance cost. High-value home insurance policies generally include replacement cost automatically. They also typically provide higher coverage limits for valuable items such as jewelry. If you compare standard insurance policies from broad-market companies, beneath the marketing slogans, you’ll find many policies are similar. Often, they share the same limitations, capping coverage limits for homes and personal liability insurance.

Frequently asked questions: Homeowners insurance rates

Or another part of the state may have lower rates because severe weather losses are less frequent. Note that the dollar differences in parenthesis are those that are greater than the national average. Sterling is based in Cleveland, Ohio and is licensed to provide insurance services throughout the United States. Sterling Coverage provides exclusive risk management services to successful families. Coverage is available to qualifying clients with unique circumstances and risk challenges. For homeowners with newer homes, we changed the year the house was built to 2021.

Below you will find premium data provided by Quadrant Information Services for different coverage selections. We’ve also included our Bankrate Score to help you understand how these companies ranked based on several metrics, including average rate, J.D. Power customer satisfaction score, financial strength, available digital tools and more. The average annual rate for a home with $400,000 in dwelling coverage and $300,000 in liability and $1,000 deductible is about $3,231, according to a rate analysis by Insure.com. The Kansas Insurance Department estimated losses of $220,840,165 in 2022 from windstorms, tornados and hail, which contributes to Kansas’ high homeowners insurance rates. Hawaii also holds on as the least expensive state for homeowners insurance in the country.

The Cost of Insuring Your Million Dollar Home with a Mainstream Insurer

High-value home policies will often go above and beyond a standard policy by offering extended replacement cost coverage for your dwelling and other structures. This feature gives you reimbursement for house repairs that are above the amount listed on the policy. This can be important if local material and building costs rise after a disaster such as a tornado. It’s likely no surprise that many of the most expensive ZIP codes for home insurance are in states that experience lots of severe weather.

Every year, you should review your homeowners insurance, including your liability coverage, premium, and deductible. Guaranteed replacement cost coverage allows you to replace or rebuild your house, even if the damage is beyond your policy’s limits. You should know both market value and replacement cost since the coverage only applies to rebuilding your house at the same spot. A million-dollar house uses a formulaic rate to estimate the cost of home insurance.

It includes policy provisions to pay for your damaged possessions at prevailing costs, and the option of receiving the claim in cash. Your high credit score may lead to lower insurance rates, and a low credit score may lead to higher insurance rates. Based on some insurance studies, credit scores and claims frequency have a symbiotic relationship. If insurers do not find your claim history anomalous or repeatedly done, you will get a higher insurance score. Average home insurance rates were calculated using data from Quadrant Information Services. Rates are based on a policy with dwelling coverage of $300,000 and liability coverage of $100,000.

Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.