How Much Does Home Insurance Cost on A Million Dollar Home?

Luxury homes require insurance plans that can pay for any damage in the future without burning a hole in your pocket. An expensive home can wipe off a considerable part of your life savings. Additionally, you certainly don’t want the risk of keeping your home uninsured. One small crisis and you might lose another huge part of your savings just to fix the issue.

But is insuring a million-dollar home expensive? How much will it cost? If these are some questions running through your mind, this guide is for you. Today, we will answer the question, “how much is homeowners insurance on a million dollar home?”.

After you’ve learned the answer to the question, “how much is homeowners insurance on a million dollar home?”, feel free to click the following link to team up with the best home insurance brokerage in Canada.

How much is insurance on a million dollar home in Canada?

There is no set premium rate for a million-dollar house. There are a lot of factors that come into play, deciding how much of a risk your property might bring to the insurer and how grave the damages can be. It will also depend on the insurance company. After all, there is no industry-specific rate.

On average, your premium rates can vary anywhere between $0.05 to $0.21 per $100 of insured value. For example, if your insured property is valued at $1 million, your premium will range between $500 to $2100.

Now you know the answer to the question, “how much is home insurance on a million dollar home in Canada?”.

Factors affecting the insurance premium for a million-dollar home

It’s not the price of your property alone that decides your final insurance premium. Here are a few other factors that come into play when your insurers evaluate your property:

1. Location

To understand the risk your insurer is undertaking by choosing to insure your house, they will take all the factors that could potentially damage your property under loss assessment. The locality of your property tells a lot about the problems it might face. For example, if your house is located by the beach, it will be more affected by storms and tsunamis.

Similarly, if your house is located in a flood or earthquake-prone area, the risk of insuring your house increases which further adds to the premium.

Natural factors aren’t the only parameters of your property’s location. If the crime rates in your area are abnormally high, your property is at a greater risk of vandalism, theft, etc. In that case, your premiums will be slightly higher.

2. Construction add-ons

Your home insurance policy does not just cover the building alone. Depending on the policy you choose, it can also protect the contents of your house, especially if you have any expensive or antique pieces and delicate architectural add-ons like a glasshouse, swimming pool, spa area, etc.

The more complicated and delicate your home’s construction, the higher your premiums will be. Similarly, if you are trying to insure your house as well as everything inside, you are naturally increasing the risk on your insurer, making them charge a higher premium.

3. Year of construction

If you are not purchasing a freshly built home, the year of construction will also play a huge role in determining your final premium rate. If a house was built a decade ago, it would definitely be weaker or a little damaged compared to a new million-dollar home.

So when your insurer is undertaking a property like this, they also take responsibility for any damage due to years of use or neglect. That’s why older homes attract costlier premiums compared to new constructions.

4. Safety features

Premiums are all about compensating your insurer for the risk they are taking. So if you can manage to reduce that risk a little by adding safety features to your home, you will definitely get a bargain.

For example, if you have an impeccable security system installed, it reduces the risk of theft or vandalism. If you have a proper fire alarm and extinguishing system, your home is less likely to burn down. And if it’s built with quality, damage-resistant materials, your property is less likely to retain severe damages from natural calamity.

Thus, anything that adds an extra layer of protection to your property qualifies you for a discount on your premium.

What is covered under your home insurance policy

While discussing average premiums for your home, you should know what exactly you are paying for. So here is a list of things that can be covered under your home insurance policy

1. Structural damage

In case a natural disaster, vandalism, or any other factor as agreed upon by both parties damages the structural integrity of your home, your home insurance policy will pay for fixing all the damages. Most insurance policies assign approximately 10% of the coverage for structural damage.

2. Personal belongings

In case a robbery, natural calamity, or any other factor damages your personal belongings, it will be covered under your home insurance. This can include jewelry, expensive clothing, furniture, art, etc. Some plans also offer off-premise coverage, meaning your personal belongings will be protected even when not inside your property.

3. Liability protection

Liability protection kicks in if you, your family member, or even your pet causes any property damage or bodily injury to another person. Liability protection usually covers remuneration to the victim as well as legal fees in case the matter goes up to court.

4. Additional living expenses

In case the damages in your house render it inhabitable for a while, additional living expenses will cover your cost of living away from your home. This includes hotel bills, meals, travel, and other costs.

How much is homeowners insurance on a million dollar home? — Bottom line

Every property is built differently, so there is no way to determine how much your insurer will charge you. But a rough estimation and a list of factors that influence the price will certainly help you negotiate a better deal.

Building an expensive, million-dollar home is a lifelong dream for most of us. So when you fulfill that dream, ensure you protect it with a comprehensive insurance policy designed to accommodate your unique needs.