Why you might be underinsured AND paying too much for it
Chances are that you are currently insured with an Allstate, State Farm or Geico.
Captive and direct carriers such as Allstate, State Farm, Geico, are great companies, however they do not offer the specialty products and expertise high net worth clients need. The risk models these companies use are designed for covering large pools of average priced homes. An independent broker however has access to specialized products, risk management and loss prevention services tailored to the unique needs of wealthy individuals.
What’s more, your home and personal property may be underinsured if you are currently with a captive or direct carrier. You might also be overpaying for inadequate coverage. More often than not, when we rewrite accounts from a captive carrier we find that the big brand name carriers are over charging for far too little coverage in the high net worth market.
Just last month Kirkwood wrote an account for a client who owned a multi-million dollar home in Westchester. The client had been with a captive carrier for years, insuring his home for $2 million. When we went in and appraised the house however, we found the replacement cost of the house was close to $4 million.
Kirkwood was able to go through its carriers who cater specifically to the high net worth market and raise the limits to $4 million at no cost to the client. The client had been paying way too much for severely inadequate coverage.
Contents including fine art, jewelry, and even wine collections are also often overlooked. Kirkwood asks customers if their house burned down tomorrow, would they have enough coverage to replace everything inside their home. It is very important to schedule items of significant value they have accumulated over their lifetime.
High net worth homes frequently are insured at incorrect values because captive and direct insurance carriers don’t have the engineer specialists to correctly determine the replacement cost of a custom made home.
Are you protected if you get sued?
Not only are high net worth individuals often underinsured on their property, but they are also often underinsured on their liability coverage.
In today’s litigious society high net worth individuals are particularly vulnerable to lawsuits and huge jury awards. This makes having a comprehensive umbrella policy with sufficient limits all that more important. $1 million is no longer close to being enough protection in today’s world. Do you entertain frequently? Do you have young drivers? Are there employees in your home such as care takers? These are all situations increasing your risk of liability claims including car accidents, slip and falls, and injuries at your home. Today juries award verdicts for tens of millions of dollars. A high umbrella limit is critical to protecting your assets.
