Many high net worth families fail to acclimatize their insurance portfolios to protect their assets as their wealth grows.
This is not bizarre as life has a way of getting very busy.
A lot of people think once they have an insurance agent who has set up a comprehensive insurance program, it is on auto-pilot but life happens and things irrevocably change, thus it makes sense to review and update your insurance program from time to time to make sure you in fact actually have comprehensive insurance coverage.
What Is Comprehensive Insurance Coverage? You will ask, what is comprehensive insurance coverage? Simply put, comprehensive insurance typically includes home insurance, auto insurance, collector car insurance, boat (yacht) insurance, valuables insurance and umbrella liability insurance.
In some cases it can also include workers’ compensation and employment practices liability insurance, cyber insurance, and directors and officers insurance. There are even more types of insurance, but this list gives you a good idea of the types of insurance being referred to.
High Net Worth Families and Comprehensive Insurance:Most entrepreneurs, business owners, and high net worth people understand the concept of risk. They have almost certainly taken a high level of risk while working to increase their wealth and assets over time.
They also understand that it makes sense to minimize their downside by insuring against risks. Insurance is not exactly fun or cool to talk about, yet one of the first questions people ask when something bad happens is, “Is it insured? Am I covered?”
In other words, we all know insurance is important, we just don’t like talking about it In working with entrepreneurs, business owners, high net worth families and insurance professionals, it can be learnt that there are some specific questions people should be asking when reviewing or considering changing their comprehensive insurance coverage.
Do I Have the Right Insurance Coverage? This is typically the first question high net worth families ask themselves and their insurance agent. Addressing the following questions when designing and implementing your comprehensive insurance portfolio will help you better in figuring out the best insurance package for you, what the deductibles will be and how the claims process works if something happens. Ultimately it should lead to a very strong and comprehensive insurance solution to protect you and your wealth.
Questions High Net Worth People Should Ask When Protecting Their Wealth and Assets
1. Who is your current insurance carrier and insurance agent?
2. Do you have an umbrella liability coverage that matches your net worth?
3. Does your umbrella policy include excess uninsured/underinsured motorist liability?
4. Will your homeowner’s coverage pay to rebuild your home with similar quality materials and craftsmanship?
5. If you recently expanded or upgraded your home, was your insurance agent notified of this new development?
6. If you own a wine collection, a significant amount of jewelry, artwork or other valuable items, are they properly adequately insured?
7. Do you have at least $1 million in uninsured/underinsured liability protection?
8. If you employ domestic staff like a nanny, housekeeper, gardener, or chef, do you have employment practices liability and workers compensation insurance?
9. If you serve on a board of directors, do you understand that the organization’s insurance may not protect you from liability lawsuits that may be brought against it?
10. Have you considered raising your insurance deductibles?
11. Is all of your insurance coverage (home, auto, collector car, boat, valuables, umbrella, etc.) with the same carrier? (Life insurance does not need to be with the same carrier as there rarely is a discount for adding it to the insurance package.)
12. Have you informed your insurance agent about any safety and loss prevention devices (security systems) in your home and autos?
Bear it in mind that each person’s insurance portfolio will be different and uniquely tailored to their needs. These questions are a great way to review and assess your current insurance coverage.
Discussing all of this with your insurance agent, whether you already have one or are looking for a new one, will greatly improve the likelihood that you have the comprehensive insurance portfolio that will best suit your situation.