Risks of Uninsured Property Losses Are Growing for Affluent Households

If you’ve accumulated substantial assets, you know you need robust insurance protection. However, if you haven’t checked your policy limits over the last few years, you could be at risk of underinsurance due to a surge in home rebuilding costs over the last six years.

Homes in coastal areas and those in remote locations — on mountainsides, near forests or overlooking the ocean — may have higher construction costs due to the expense of rebuilding in those areas. Since the COVID pandemic, the cost of rebuilding homes has skyrocketed 45% due to supply chain constraints and rising costs of materials and labor. High-end homes often have unique features that may be expensive to recreate.

In addition, homes in natural settings and remote locations face growing risks from natural catastrophes. Wildfires have ravaged western and mountain states over the past decade. Hurricanes have grown in frequency and intensity.

With these realities in mind, high-net-worth individuals need to make sure they are properly insured and that their policy limits are keeping up with rebuilding costs.

 

Ripple effects

Underinsurance has ripple effects. For example, the amount of insurance covering other structures on the grounds is commonly 10% of the amount on the home. Underinsurance on the home may lead to underinsurance on structures such as a gazebo, guest house, servants’ quarters or stables.

In addition, coverage for your personal property may be inadequate. The value of furniture, appliances, electronics, computer equipment and other types of property has risen sharply, and high-net-worth individuals typically have more expensive and rare belongings.

For example, high-end appliance costs have significantly increased over the last five years, with notable spikes driven by 2018 tariffs, pandemic-era supply chain issues and renewed inflationary pressures from new tariffs imposed in 2025–2026. While prices for some appliances dipped in 2023–2024, they reversed the trend in 2025, with specialized luxury items seeing 8% to over 25% price hikes, according to Morningstar, which also expects durable goods prices — electronics, toys, tools and small appliances — to rise 4.5% in 2026.

Affluent households also often have valuables such as artwork, jewelry, collectibles or musical instruments. These items require special coverage.

 

What you can do

So the question is, if you are a high-net-worth individual, would your current homeowner’s insurance cover your home if it were a total loss? In light of the increasing risks highlighted above, we recommend that you meet with us to evaluate your coverage.

The amount of insurance on a home should be enough to pay for rebuilding if it is razed by a fire or another catastrophic event. It should also cover all the features and property in the home through replacement cost coverage.

As for your personal belongings, a typical homeowner’s policy will cap coverage for certain categories, such as jewelry. This will not be sufficient if the value of your belongings exceeds the policy’s coverage.

While some recommend purchasing separate endorsements for these high-value items, we recommend a high-net-worth homeowner’s policy that adequately covers all your belongings.