It is a pretty common thought that high net worth (HNW) individuals are more money savvy than the rest of us. And typically, that is probably true, but surprisingly not so in the insurance world, or so say the results of a survey conducted by ACE Private Risk Services.
ACE polled more than 600 independent insurance agents and brokers, just like Texan Insurance, regarding their HNW clients that had been previously insured by one of the mass-market insurance companies. Their findings were interesting to say the least. They found that HNW clients are underinsured 58.3% of the time, and over insured only 7.5%. In addition, 27.7% of HNW individuals are missing out on various savings opportunities.
Why are HNW individuals more likely than others to be underinsured? The answer is simple: they have assets that out-value their insurance coverage or are faced with higher liability demands. For example, if you are HNW and staff any sort of employee in your home, then you should know that an umbrella insurance policy will not cover you for sexual harassment, wrongful termination or discrimination – instead, you need employment practices liability coverage.
Maybe you’re a collector of valuable artwork. If you are one of the 86% who is inadequately insured however, you could be losing money in one of three key ways: crude tracking and valuation, homeowners insurance limitations, and/or poor loss prevention strategy.
An independent insurance agent can help you put together a Valuables Policy to best protect your collection.
How to Save
HNW families are also missing out on various savings opportunities. For example, your home and auto deductibles may be too low.
What? Too low?
That’s right, too low. By increasing your homeowners deductible to $2,500 from $500 for a home valued at $1 million will save you $900 a year – over a 21 year span that’s $18,900!
You can also ask your agent about package savings discounts and any loss prevention credits you may qualify for.
Source – Wealth at Risk: How High Net Worth Families Overpay to be Underinsured
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