Ask the Expert: High-Net-Worth Insurance

Insurance Market Source regularly taps into its network of experts for insight into key trends and developments across the insurance landscape. Bill Gatewood, Corporate Vice President and Director, Personal Insurance at Burns & Wilcox, breaks down the ins and outs of high-net-worth insurance.

Q: What do high-net-worth insurance policies cover?

A: High-net-worth insurance policies provide specialized coverage for affluent families and individuals with homes valued at $1 million or above, or with a net worth exceeding $5 million. The policies can be uniquely tailored to the client’s needs, and can include a number of customized options such as equine mortality, kidnap and ransom, personal articles floater, excess flood and high limits of personal liability.

Q: Why should a client choose a high-net-worth coverage?

A: Beyond the added layer of protection, high-net-worth policies provide access to an array of subject matter experts and ‘white glove’ type services. For example, a client seeking a personal articles floater for a cherished family painting or rare foreign automobile will have access to and assistance from an art curator or collector car specialist to ensure that accurate values are established, sufficient protection is in place and proper coverage is offered.  Additionally, high-net-worth carriers have the expertise to offer additional services such as personal cyber threat assessments, background checks on domestic help such as drivers and nannies, hurricane evacuation assistance and wildfire protection.

High-net-worth policies also allow the insured to maintain their lifestyle in the event of a catastrophe, be it a natural disaster that destroys their home or a debilitating illness that strikes the family during a trip abroad. Under this coverage, families can be relocated to a place of comfort that mirrors their way of life as their home is rebuilt or while they travel.

Q: What should retail brokers and agents consider when working with high-net-worth clients?

A: Many high-net-worth individuals are underinsured by a standard market policy because they are unaware of the features and benefits of high-net-worth coverage. Retail brokers and agents should view themselves as full-service risk managers and counsel their clients accordingly. While premiums are higher for these specialty policies, when brokers and agents compare the coverages and services available through the affluent insurers, most clients will see the value of insuring their family assets with a high-net-worth carrier.