Because they are more likely to travel, own second homes, host fundraising and other events in their homes, and drive expensive vehicles; affluent families and individuals have greater exposure to loss. Personal insurance for the affluent, such as homeowner’s, personal auto, and coverage for valuables like jewelry, antiques, art, and gun collections, should be tailored to address these risks.
Specialized insurance programs tend to carry larger liability limits, higher deductibles, and broadened coverage than traditional insurance. Insurance companies specializing in the affluent market offer tailored coverage such as guaranteed home replacement cost coverage, ensuring that special features of the home are replaced with like kind and quality.
The review process itself should be approached like a business insurance review. The first review can feel a bit overwhelming, but it’s critical to understanding our clients’ exposures to loss in order to provide comprehensive solutions. I always emphasize the need for comprehensive solutions based on my experience seeing affluent families targeted for fraudulent claims and higher reward demands.
Claimants can now easily research you online and determine with some certainty that you have financial means. There aren’t many secrets these days. A few clicks of the mouse, and claimants (and their attorneys) can determine occupations, organizations to which you belongs, social engagements you attended and the like. Claim demands will be higher; making the need for high limits of insurance all the more important.
Tom Kammerer, Sales & Marketing Manager for Chubb Personal Insurance, stresses the importance of working with brokers and carries with this type of experience in affluent insurance coverage.
“Sometimes it takes a poorly-handled claim to make people see they need specialized help,” says Kammerer. “For our clients maintaining their lifestyle after a significant loss is important. Large, custom-built homes can take well over a year to replace. After large losses, we work with clients to help them find accommodations, replacement cars and other important personal affects they enjoyed prior to their loss.”
To protect from huge potential loss and headaches, the affluent should go through a review with their insurance broker and carrier once a year. High-end insurance carriers should delve deeply into client practices and ask questions about domestic staff (gardener, nanny, etc.), central alarm systems, valuable articles, and more.
So, yes, there is a difference when it comes to insurance for the wealthy! And I’d advise you not to wait and learn that lesson the hard way.