Safeguarding Luxury: A Comprehensive Guide to Insuring High-Value Homes in Coastal South Carolina
November 2, 2023 by Brad Davis, CIC
Owning a high-value home along the picturesque coastline of South Carolina comes with its own set of unique joys and challenges. While the breathtaking views and coastal lifestyle are unparalleled, the ever-present risk of hurricanes, flooding, and other natural disasters requires homeowners to prioritize comprehensive insurance coverage. In this guide, we will explore the key considerations and tips for insuring a high value home in Coastal South Carolina.
What is considered a High Value Home in Myrtle Beach?
Let's first discuss what is a high value home. Some people call them luxury homes or expensive homes, but in the insurance world we refer to them a high value. We typically use the Coverage A (Dwelling) limit to distinguish if a house is high value. It differs between insurance companies, but usually starts around 500,000 or 1,000,000. The most common limit and what insurance agents most commonly use is 750,000.
A quarter of a million dollars is a big number. But since the cost of homes are going up so fast, we are seeing so many more homes that are high value compared to a few years ago. It is super common now so see homes need 750,000 Coverage A, or higher.
Why is it important that we distinguish what is a High Value Home for the Myrtle Beach area?
Insurance agents must follow the guidelines set by the companies we represent, and they are all different. As mentioned above, most companies classify homes at 750,000 or higher as high value and they slightly change the guidelines for those homes. With the larger risk (potential large claim) on the books, the insurance company may ask more questions or require additional protection. For example, a policy for a high value house may require an alarm system, newer roof, pre-bind or post-bind inspection, or something else.
It may also be a matter of capacity. Often insurance companies can only write so much business in each area. If you think about it from their perspective, they can write three to four smaller homes or just one million-dollar home.
Side note: There is often more to a home just being expensive. It is common for a homeowner of a high value home to bring additional risks that the insurance company wants to evaluate. For example, the homeowner may have more valuable jewelry or fine arts, have a maid or landscaper on payroll, or be a director on one or more boards. Each of these things (and others) adds more coverage needed, an increase in liability exposure, or both.
Here is some additional information about insuring household help -> Insurance Information Institute
Home features and factors that should be considered when insuring a Coastal High Value Home.
1. Invest in Home Improvements:
Implementing structural enhancements, such as impact-resistant windows and doors, can reduce the risk of damage from high winds and debris during storms. Talk to your insurance agent about this, as they may be able to apply discounts with proof.
2. Elevate the Home:
If feasible, elevating your home can minimize the risk of flood damage. Elevated foundations are a common sight in coastal areas and can provide an added layer of protection.
3. Regular Maintenance:
Regularly inspect and maintain your property. Addressing potential issues promptly can prevent more extensive damage during a storm.
4. Consider a New Roof:
Roofs do not last as long near the coast. You are lucky if they last 20 years. Insurance companies like them as new as possible!
Types of Coverage that may be needed for a Coastal High Value Home.
1. Windstorm Coverage:
Given the frequent threat of hurricanes in Coastal South Carolina, windstorm coverage is essential. This type of coverage protects your home from wind-related damages, such as roof damage and structural issues caused by high winds.
You can check your wind and flood risk here -> riskfactor.com
2. Flood Insurance:
Coastal regions are prone to flooding, especially during hurricanes and heavy rainfall. Standard homeowners' insurance typically does not cover flood damage, so obtaining a separate flood insurance policy through the National Flood Insurance Program (NFIP) or a private insurer is imperative.
Your can request a flood insurance quote here.
3. Builder's Risk Insurance:
If you are building or renovating a high value home, consider obtaining builder's risk insurance. This coverage protects against damage to the structure and materials during the construction phase.
4. Extended Replacement Cost Coverage:
High-value homes often have unique and custom features that may not be fully covered by a standard insurance policy. Extended replacement cost coverage ensures that your home can be rebuilt to its original specifications, even if the cost exceeds the policy limit.
5. Comprehensive Liability Coverage:
Liability coverage is crucial for high value homes, especially in a litigious society. It protects you financially if someone is injured on your property or if you accidentally damage someone else's property.
6. Valuable Items Coverage:
Consider adding a rider or separate policy to cover high value belongings, such as fine art, jewelry, or collectibles. Standard policies may have limits on coverage for these items.
You can read more about this here -> Insurance Information Institute
Insuring a high value home in Coastal South Carolina requires a strategic and comprehensive approach. By understanding the unique risks associated with coastal living and securing the appropriate coverage, homeowners can enjoy the beauty of the coastline while safeguarding their most valuable asset against the unpredictable forces of nature. Working closely with an experienced insurance professional can help tailor a policy that meets the specific needs of your luxury home in this dynamic and beautiful coastal region.
Care to see what we can do to help protect your high value home? Please visit ThinkDavisInsurance.com or call (843) 213-0000.
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