The “high-value” home market consists of homes valued at an excess of anywhere from $500,000 to above $1 million, depending on the area. It is made up of approximately 11.1 percent of all households – or about 14.9 million homes. When compared to the Census Bureau’s most recent housing estimate of 135.8 million households, high-value homeowners become a niche market for insurance agents. Additionally, nearly half of these 14.9 million U.S households are located in disaster-prone areas of the country, including coastal areas and flood plains.
According to the Insurance Journal, approximately 40% of high-value homeowners carry only enough insurance to cover the sale price of their home and not nearly enough to entirely rebuild the home in the event of a total loss, leaving them underinsured. Agents and brokers have a unique opportunity to distinguish themselves in the high-value home communities, but doing that takes a little research and strategy. Here are six things agents should know about high-value homeowners:
- Many high-value homeowners who are inadequately insured are not aware of it. Agents should review homeowners’ policies, reminding them that their basic policy covers only the mortgage value of the home and does not include custom work or specialty construction.
- Though 85 percent of the high-value homeowners market is controlled by direct underwriters, that still leaves approximately over 2 million homes for other insurance agents and brokers.
- Most high-value home policies provide generous replacement reimbursement such as guaranteed replacement cost. This type of policy pays the full cost of replacing the home even if that amount exceeds the policy limits, and is a very attractive feature to high-value homeowners.
- Luxury seasonal and secondary homes and condos are common among high-value homeowners, and may require a more specific type of policy depending on their use.
- High-value homeowners value expertise and personal attention from their insurance agents.
- Agents and brokers should look to partner with wholesalers that can provide training and support to help them address all of their clients’ needs.
With a partner in California-based American Team Managers (ATM), agents and brokers can benefit from working with an independently owned insurance wholesaler and managing general agent. ATM helps agents and brokers cut into the lucrative market of high-value homes and provide potential clients with the insurance expertise that high-value homeowners require when looking to purchase customized insurance products and risk management services for their homes.
About American Team Managers Insurance Services
Founded in 1998 by Chris C. Michaels, American Team Managers Insurance Services (ATM) has provided wholesale and MGA services to more than 5,000 independent insurance agents throughout the United States. Our goal is to establish close, long-term relationships with our agency partners and insurance carriers and provide competitive products for the Exclusive and Non-Exclusive markets that we serve. For more information on our products and services, give us a call at (714) 414-1200 to speak to a representative.