Personal Insurance Blog

Financial advisors play a key role in ensuring that their clients wealth is protected. Property and casualty insurance- protection for homes, jewelry, cars, fine art, liability and yachts- is a critical part of personal wealth management. If your client has net worth in excess of $2 million, they need an insurance agent and insurance carrier equipped to address the clients complex risk management needs. It is important to enlist a knowledgeable insurance agent with access to private client and specialty insurance markets.

Here are some important considerations to keep in mind  to protect successful individuals  and families: 

• How often does your client’s personal insurance agent conduct an in-depth review of the client’s lifestyle and insurance portfolio?  If the answer is less than an annual review, there may be gaps in coverage. Going through a checklist with an agent specializing in high net worth clients assures that all of your client’s exposures are properly addressed. Reviewing the needs of your client should be completed every year.

• Are your clients protected by adequate personal excess liability coverage? If their net worth exceeds liability coverage limits then assets are at risk. Private client insurers offer up to $100 million on a single policy. This can address claims for property damage and personal injury caused by your client. In addition, these policies also provide legal defense even for cases that may seem frivolous.

• Is the client's insurance program complicated? Does the client have policies split among several agents and insurers? For example,  the primary home and autos are insured  with one agent.  A summer home is insured  with a different agent and so forth. When coverage is fragmented, it almost always is more expensive and difficult to manage. Most importantly, if not handled by the same agent then there is a higher risk of an exposure going unprotected.

• Is the home properly insured and protected? If your clients had to rebuild their homes in today’s market, would they have enough homeowners’ insurance to sufficiently cover the cost to rebuild? If the home has been extensively remodeled and the home insurance was not properly updated, the property may be greatly underinsured. A home replacement cost analysis or inspection can be arranged as part of the client’s annual review.

• What type of hobbies or activities does the client enjoy?  Many private client insurers offer specialized Collection coverage to protect your clients favorite pastimes. For example, these insurers offer the services of art collection management experts to ensure that each collection is properly valued, adequately insured and protected in the event of an everyday mishap or a catastrophic disaster.

• What is the makeup of the family? The exposure to liability claims is greater when there are youthful drivers in the household. Umbrella liability coverage can address the increased exposure associated with teen drivers. Some families may want to consider kidnap and ransom coverage available from private client insurers.

• Does the client travel frequently? Private client carriers offer worldwide travel protection plans to respond to circumstances beyond the client’s control that cause a cancelled trip, emergency medical treatment or an early return home.

• Are the clients insurance policies in sync with their estate plans? It is not unusual for successful clients to structure their property ownership using trusts, LLPs and LLCs. Not all insurers allow their policies to reflect these ownership structures. This can result in reduced protection or complicate the claim settlement at the time of a loss. Having an agent and insurer that is knowledgeable of property ownership structures is paramount to assuring your client is properly covered.

• Are the clients involved with charities or foundations? Not for profit organizations typically operate on tight budgets and carry a minimal amount of liability insurance. Many private client insurers offer up to $1 million of liability protection in addition to the coverage provided by the board.

• Should the client increase deductibles to save premium?  Many private client carriers offer a range of deductibles from $1,000 to $50,000. These carriers also offer a waiver of deductible for a loss over $50,000 if the deductible is under $20,000. Increasing the deductible saves premium so it may make sense for your client to take a higher deductible.

• Does your client employ private staff? It’s not uncommon for housekeepers, nannies, gardeners and others to take their employer to court. Employment Practices Liability Insurance responds to allegations of sexual harassment, wrongful termination, discrimination and more. In addition, private client insurers May offer complimentary background checks on private staff. This helps to ensure only the most qualified and trustworthy individuals are taking care of the client’s family and property.  

Offering complete solutions for successful individuals and families can be ensured with a well-informed insurance agent with access to private client markets. Our agency www.agordon.com and I can assist clients with a complete review of their account and risk management solution recommendations for clients.