Insurance companies like Ace Insurance Company use various guidelines to separate high net worth individuals clients from the masses. Income alone may not sufficiently define clients as high net worth individuals, as in the case of one who inherits a large sum of money. So what designates particular clients as truly high net worth individuals to companies like Ace Insurance Company?
What makes high net worth individuals
o Home Value: the truly high net worth individuals usually own a home valued at more than $1 million.
o Possessions: many well-off clients own collections of fine art, jewelry, or other collectibles.
o Policy Amount: the high net worth individuals often generate premiums of $10,000/year or more.
As your agent, we will gather the information that is needed to insure you and your family properly. Many clients can only spend a limited amount of time discussing these matters, so we will prepare ahead of time and make your presentation as brief as possible. After all, time is money!
Due to large amounts of money invested in possessions like homes, cars, art collections and antiques, we remain on call for high net worth individuals 24 hours a day. For example, if a customer purchases a rare collection, they will most likely want it insured immediately. You can reach us anytime and we will do whatever it takes to meet your needs.
Managing Risk
High net worth individuals and families often are not aware that their risk profiles have changed in ways that require them to reconsider their insurance coverage. Risk management is very important when handling accounts for our wealthy clients. Because having more possessions at higher values, the needs are different. Many times the only way to help you realize cost-effective savings is to encourage setting deductibles high, and then cover smaller claims personally.
One area to look at carefully is liability coverage. Many clients have exposure to such things as libel suits, household employee issues and even the need for directors’ and officers’ coverage for service on a nonprofit’s board of directors. Insurance must also be adequate to protect a family’s fortune against things like personal injury lawsuits. One of our agents will sit down with you as a potential client or your representatives to do an initial assessment of the overall needs in order to ensure there are no issues with gaps in coverage.
Another area is property insurance where individuals or families may be underinsured as their circumstances change. People with unique homes or ones with customized features must be sure their insurance covers the replacement value rather than the current home value in the event of a fire as well as the time required to make repairs, something for which most policies have restricted limits. A policy on high-end homes would also offer protection against damage to art and furnishings during remodeling. G old coin collection s are often underinsured today.
As wealth grows, the breadth and complexity of risks also tend to increase. Properly addressing these risks often requires an agent with specialized expertise and access to insurance products and services from the few companies, like Ace insurance company, that focus on serving high net worth individuals or families. Unfortunately, most high net worth individuals have not sought out such an agent. As much as 65% may remain with agents who have placed them with carriers offering standard homeowners, auto, and other policies that do not address the unique property and liability risks confronting the high net worth individuals.
What should you look for in an agent?.
Some Insurance mistakes made by the wealthy
Placing too much trust in a property and casualty insurance agent is not beneficial. You should have a good understanding of what your insurance coverages are.
High net worth individuals families may acquire collections. The basic policy limits the coverage on these items to a certain dollar amount. The amount of coverage can be increased by adding an endorsement that lists the collectables by item. The type of coverage may be written to cover disappearance, breakage and loss outside the home.
Insurance companies’ like Ace Insurance Company, pricing includes the frequency of prior claims, not just the severity of the claims. Insurance companies expect to pay the large, catastrophic claims. But the number of small claims such as a $50 car-towing claim or a $100 windshield-repair claim will affect pricing from insurance companies. To an insurance company, a claim is a claim is a claim.
Making a decision by merely selecting the lowest price can lead to a poor insurance decision. Consider the quality and amount of coverage carefully. Price is just one factor.
The savings from higher deductibles can pay the cost of higher amounts of coverage. Other agents are focused on low deductibles to avoid the client being out of pocket on a claim. The high net worth individuals market is willing to pay a higher deductible, but seeks a higher coverage amount to protect its assets.
Direct agents, independent agents and brokers have different resources and expertise. Direct agents represent one insurance company, whereas brokers specializing in the high net worth individuals may use up to 20 insurance companies to build pricing competition. They may also be able to position a particular risk to an insurance company in a way that secures a lower premium.
According to the Federal Emergency Management Agency, “There is a 26 percent chance of flooding during a 30-year mortgage, compared to a 9 percent chance of fire for buildings in high-risk flood areas.”
