I NOTICED a beautiful Surrey mansion on Rightmove going for nearly £20million and I got wondering how much it would cost to deliver the high net worth home insurance.
This is not a normal property to insure. The average price in the UK is around £200,000, so this is 100 x more expensive. And it looks it as well, have browse yourself here at Rightmove.
It’s very much an aspirational home that probably belongs to a banker, footballer or MP…
At 22,000sq/ft it is pretty much 15-20 times bigger than most decent size homes and more like 34 times larger than most London flats. But when it comes to home insurance it is simply another calculation of rebuild and contents cover that is needed.
In this case, I doubt the owner spends time on price comparison websites seeing if he can save £20 on his annual policy. There are not many price comparison sites could deal with a property of this scale and magnitude. It needs what they call int he industry, specialist High Net Worth insurance. That means it is tailored for the higher rebuild and contents values that are expected in such a property.
Despite the premium build, I doubt very much the rebuild would be £20million. Retail and rebuild values are not normally close to each other. I’d estimate maybe £5million from the ground up. That’s still around 25 times bigger than the average rebuild value in the UK, so you can see why this will need specialist cover. If it goes wrong and a claim is made, it is going to be costly.
The contents insurance are another thing altogether. Most high net worth individuals will have beautiful and highly appointed furniture and electronic gadgets. Then they may have art, jewellery and wine collections with values that are eye watering. The normal £30,000 – £50,000 contents insurance does not apply here, that may only cover a single painting in a house like this. Literally the sky is the limit when it comes to contents insurance, it could easily match the £5million rebuild or more.
The good news is that these high value home and contents insurance policies are available and there is significant competition to win the business. The owners tend not to move supplier for years as the costs are relatively low compared to their wealth, so getting new high net worth business is valuable for providers who can then spark up a long term relationship.
Most of these insurance policies will be bundled in with financial advisers, but that simply adds another mouth to feed in the process. For the best high net worth home insurance, you should try The Property Insurer.