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Although most insurers have been cutting back on coverage, a few high-end companies, including Chubb, Fireman's Fund and AIG, do things differently. They still offer full-replacement-value coverage on your home.
To do this, Chubb spends a lot of time calculating rebuilding costs. The company sends appraisers to assess the replacement value of each home and create a detailed report documenting its special features. The report helps Chubb make sure it's collecting enough money in premiums to pay for the full replacement value. The appraisers interview contractors every year to make sure the coverage amount and premiums keep up with local construction costs.
"We insure a lot of historic homes, and we typically find that the replacement cost far exceeds the market value," says Edward Fernandez, senior vice-president of the Chubb Group of Insurance Cos. This is the opposite of most basic homes, which lack unique architectural details and therefore the replacement cost is less than the market price because of the value of the land.
Chubb also tends to provide more coverage for possessions: $5,000 for jewelry, securities and furs, for example, $10,000 for silverware and about $5,000 for stamps and coins in their standard policy. Most other companies limit those coverages to $1,000 to $2,500 unless you buy extra insurance.
This extra coverage doesn't come cheap. A Chubb policy tends to cost about 20% to 40% higher than other companies' standard policies on a $600,000 home, and up to 10% to 25% higher on an $800,000 home, says Kevin Daly, an account executive with PLI Brokerage in Boston.
But you are getting a lot of insurance. "If you take a bare-bones policy from a standard company and add the bells and whistles, Chubb's pricing will be very competitive," says Mike Smerkanich, who heads the New York office of Marsh's Private Client Services, an insurance brokerage that generally works with Chubb, Fireman's Fund and AIG because of their extra features and good reputation for paying claims.
If you don't have a lot of valuable possessions, the Chubb policy may provide more insurance than you need -- and the company may not insure you anyway. In Massachusetts, the coverage is available only on homes with replacement values of $600,000 or more, says Daly.
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