Your home, your vacation home, your cars, your boat, your jewelry and wine collection, these assets need to be protected but is your current insurance enough? Is your coverage tailored to address your specific risk profile? Coverage provided by standard and mass market insurance carriers is insufficient protection for those with a higher net worth. High net worth individuals (HNWI’s) need premium insurance protection.
As your personal wealth and/or your assets accumulate, your degree of risk also increases. An elevated level of risk translates into more complex insurance needs. Mass market and direct response insurance carriers like those represented by a perky, white-aproned spokeswomen or an adorable green gecko with an English accent, don’t offer the specialty products or expert guidance that accompanies private client insurance. There is a significant difference between traditional insurance coverage and that provided by our premium partners Chubb, Pure, Berkley One, Cincinnati, Hanover Prestige, and Vault.
Accomplished individuals and families need the customized protection of premium insurance, as well as the guidance provided by expert risk managers, such as McSweeney & Ricci’s Private Client Group.
Many HNWI’s are Underinsured
Your assets may include several homes, cars, a boat and more. Maybe you employ a household staff including nannies, housekeepers, drivers, gardeners or a family office. As your property and network grows, your liability also increases. High net worth individuals also have an increased likelihood of being targeted by cyber criminals and being named in a lawsuit.
Standard insurance is designed to meet the general coverage needs and risks faced by the masses. As the value of your home, property and other assets rises, basic coverage is insufficient to cover the level of risk, which can result in coverage gaps. These gaps in insurance coverage could jeopardize the financial success you’ve worked hard to achieve.
A recent article in Insurance Business Magazine revealed,
“…70% of high net worth individuals do not have suitable insurance coverage in place.” (1)
Reasons why successful individuals may be underinsured and paying too much for too little coverage:
1) Specialty Market Awareness
Successful individuals insured by standard or mass market insurance may be unaware of the existence of private client insurance. McSweeney & Ricci Private Client Group Manager, Jessica Logan states,
“many of the successful clients I speak with are surprised to hear that there is a difference between traditional insurance and the coverage provided by our premium partners. They’ve been insured by a captive insurer who has one product to sell, and no access to the select carriers that cater to the high-end market. After reviewing their existing policies and completing a thorough risk assessment, I often find gaps in their coverage that could’ve proved costly in the event of a loss. Many are underinsured, especially when it comes to personal liability. Some have never heard of a personal umbrella/excess liability and if they do carry this coverage, it’s not enough. Through our premium partners, I’m able to offer them tailored coverage that is not only a better value, but also more comprehensive protection.”
2) Failure to Adjust Coverage in Response to Changes in Lifestyle
As a person’s wealth builds, they may neglect to adjust their personal insurance program accordingly. A client’s insurance program should be reviewed regularly and their account manager should be asking questions to assess any increased exposure to risk. However, many affluent policyholders insured through non-specialty carriers, don’t have a dedicated account manager or their agent doesn’t have access to premium carriers, so they are never offered customized coverage.
Successful individuals have more to protect; their complex financial protection issues require the assistance of highly trained insurance professionals offering expert guidance and tailored risk management solutions.
3) Classification
Oftentimes, successful people don’t classify themselves as “wealthy, accomplished, high net worth or affluent” and simply seek out insurance to protect their assets, not realizing their portfolios warrant a higher level of protection.
Whether you classify yourself as an above average earner or not, the personal property and level of success you have achieved should be protected by premium insurance.
4) Forgetting to Insure Valuable Items
Many times people just don’t think about the items within their home that they would want to replace in the event of a loss. A skilled risk professional will schedule regular appraisals and ensure your possessions have enough coverage to be replaced at today’s market values. Over the years people accumulate possessions and forget that those items may have increased in value over time. Wine and spirits, jewelry, art collections, memorabilia and antiques should be protected by premium collections & valuable items insurance.
Areas of Concern-Cyber & Liability
Recently, there are two areas that have emerged with regard to HNWI’s being underinsured.
In an article by the Insurance Journal, Michael Taylor, Chief Claims Officer for our premium partner, PURE Group of Insurance Companies states, “I think there are two areas of particular interest and/or vulnerability that we see. … One of them is cyber and the other one is higher limits of liability insurance.” (2)
Cyber Risk
As the workforce becomes increasingly remote, successful individuals are being targeted by cyber criminals more regularly. Not only do wealthy individuals and families represent a higher potential payout for nefarious cyber criminals, but their lifestyles and sometimes public personas further increase their risk. Research conducted by our premium partners at Chubb indicated that, “1 in 10 wealthy respondents have been the victim of a cyber attack while working remotely.” (3)
McSweeney & Ricci’s Private Client Group provides accomplished individuals and families (including family offices), with custom-tailored fraud and cyber fraud insurance protection designed to mitigate and address cyber risks.
Liability Exposure
Within the mass market and with traditional insurance, there are limits as to how much coverage can be purchased. For instance, standard auto liabilities max out at $500,000 but it is easy to see how a successful individual sued for an auto accident, could be found liable for much more. In comparison, premium carriers such as Chubb offer liability limits of up to $5 million.
Many traditional personal lines carriers offer excess or umbrella coverage of up to $1 million. That amount of coverage simply isn’t enough to protect the assets of HNWI’s. Often the cost of higher limits for personal excess liability with mass market carriers is higher than the actual risk. An experienced private client risk professional may be able to increase excess liability limits to provide for more comprehensive coverage, while keeping a client’s premium the same.
Why Choose McSweeney & Ricci’s Private Client Group
Formed specifically to address the needs of accomplished clients, McSweeney & Ricci’s Private Client Group has partnered with more specialty carriers than most agencies our size. These partnerships with Chubb, Pure, Cincinnati, Hanover Prestige, Berkley One and Vault, allow our clients access to flexible products and services designed for affluent clientele.
Our experienced private client risk advisors provide concierge-level service. During a holistic review, our team will examine your full portfolio to assess your individual level of risk. We work with you directly, partner with your family office, or your personal business manager, to provide guidance as to the proper levels of coverage and solutions to avoid loss in the first place.
Accomplished individuals have more at risk. That higher degree of risk, requires a higher level of protection. For more information on premium insurance, contact the Private Client Group professionals at McSweeney & Ricci by calling 844-501-1361 or request a complimentary insurance quote on our website.
There is a difference. Experience it now.
Sources:
- Wealthy clients failed by direct carriers’ one-size-fits-all approach | Insurance Business (insurancebusinessmag.com)
- Getting Personal in Today’s High Net Worth Market: PURE Group (insurancejournal.com)
- NU Property Casualty 360-“Chubb work from home survey reveals new and emerging risks” By Danielle Ling | July 17, 2020 at 10:00 AM
- Tapping the High Net Worth Market (insurancejournal.com)
- The Best High Net-Worth Coverage | Insurance Business (insurancebusinessmag.com)