| lise rich | Date: Monday, 2013-03-04, 5:43 PM | Message # 1 |
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| Associated Press Experts say some insurers won't provide wind coverage in risky markets, such as Hilton Head Island, S.C., above. To get full coverage on their <a href=http://louisvuitton-borseoutlet.webs.com>Louis Vuitton Outlet</a> home and the belongings in it, many homeowners with $1 million-plus properties have to sign up for at least four insurance policies. Beyond basic home insurance, they often need policies that pay out for damage their homes may sustain from natural catastrophes, like floods or earthquakes. They also want policies to protect valuables, like an art or wine collection, at home. And most of these homeowners also sign up for home-related policies that protect their assets in case of a lawsuit. What's more, premiums have been going up partly due to an increase in homeowner claims. For example, high-end insurer AIG Private Client Group says it increased premiums by 2% to 5% over the past two years. ACE Private Risk Services, the high-net-worth underwriting division of ACE Group, says it raised premiums by an average of 4% over the past year.The more expensive or rare a home, the more complicated the process of insuring it. To confirm a home has the appropriate amount of coverage, luxury insurers will send an appraiser to walk through the property to assess the cost of rebuilding, replacing rare materials or employing skilled workers to restore its unique features, like hand-painted murals. That can lead to an estimate that's 50% to 100% more than the market value of the home鈥攍eaving homeowners with higher premiums than they expected. Insurance premiums for luxury homes vary widely. F <a href=http://longchamp-outlet.webs.com>Longchamp handbags outlet</a> or example, on a $1 million home in areas where catastrophes are infrequent, a basic home-insurance premium can range from $4,000 to $5,000 per year, including a $2,500 deductible, with AIG Private Client Group. In high-risk hurricane zones, however, insurance brokers say wind coverage (which may not come with basic insurance but instead is sold as a separate policy) on high-end homes can come with premiums of $50,000 or more per year. And in many cases, individuals planning to take out a mortgage on a home have no choice but to s <a href=http://louisvuitton-borseoutlet.webs.com>borse louis vuitton</a> ign <a href=http://longchamp-outlet.webs.com>longchamp le pliage</a> up for extra policies. Lenders will require borrowers purchasing a coastal home at high risk of flooding to first sign up for a flood insurance policy before the mortgage can be approved. Similarly, many lenders will require wind coverage for homes located in hurricane-prone areas before approving a mortgage. In some states, like Florida and South Carolina, buyers often need both flood and wind coverage to get a loan.Complicating matters, a home's location could make it ineligible for certain types of coverage. Experts say some insurers won't provide wind coverage in risky markets, such as Palm Beach, Fla., and Hilton Head Island, S.C. Others first have to confirm the property is built to withstand a hurricane. Otherwise they'll require homeowners to install hurricane-resistant features. Some luxury homeowners in California encounter issues getting earthquake insurance. Insurers must first approve a home for earthquake coverage, and homeowners there often face high premiums or could be denied coverage.Such headaches have led some affluent homeowners to ditch peril-specific insurance. Spencer Houldin, president of independent insurance agency Ericson Insurance Advisors, says a Florida-based client with $1.4 million of basic homeowner's insurance recently decided to pass on wind coverage after insurers insisted that she replace her custom-made doors with hurricane-resistant versions. Rather than change her home and pay enormous premiums, she determined she has enough in savings to pay for potential wind damage the house may incur in the future, he says. Luxury homeowners also tend to sign up for "valuable-articles policies," which cover rare or high-value items in the home. Those with employees like housekeepers and chefs can also consider workers' compensation coverage that will offer protection if an employee is hurt, or if the homeowner is accused of improper terminat <a href=http://longchamp-outlet.webs.com>longchamp le pliage</a> ion or discrimination.Pooling policies with a single insurer could give homeowners more leverage: Insurers say they'll consider insuring a risk-prone home if they're also insuring properties that homeowner has in less-risky areas of the country. Bundling could also help homeowners get discounted premiums. Here are other ways to lower costs. 鈥?Raise deductibles: Affluent homeowners can lower premiums by raising their deductibles. AIG says it offers deductibles of up to $100,000, which can result in annual premium discounts of 20% to 40%. ACE Private Risk Services, which offers deductibles of up to $250,000, says that by increasing the deductible on a $3 million home to $10,000 from $2,500, homeowners can save 30% to 50% on premiums. 鈥?Add safety features: Most insurers say they lower premiums if homeowners take steps to make their home safer. Chubb Group of Insurance Cos. says it discounts premiums by up to 25% for homes with sprinkler and alarm systems, for example. 鈥?Second-home discounts: Insurers consider second homes to be more risky because they're vacant much of the year, so many will offer discounts for installing safety features, such as a water-leak detection system or a low-temperature monitoring system that protects against freezing pipes. Write to AnnaMaria Andriotis at AnnaMaria.Andriotis@dowjones.com A version of this article appeared February 15, 2013, on page M5 in the U.S. edition of The Wall Street Journal, with the headline: Protecting Your Home From Earth, Wind Fire.
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