With over 5 million high-net-worth individuals and families in the US, specialty insurers have taken notice, bringing a suite of specialized products like high-net-worth homeowners insurance and a bevy of associated coverages, like excess liability coverage to extend liability limits into the millions.
High-net-worth insurance brokers cater to these affluent households, matching policies and extra coverages to each household’s unique risks with expert precision. Every household’s needs are different. Your risks may differ from those of your friends and neighbors. In many cases, work and home life intertwine, creating a need for customized coverage that fills the gaps left by standard policies.
Enhanced Coverage for Luxury & High-Value Homes
Our homes are often the single largest investment we make and that trend is true even for high-net-worth individuals and households. However, as the value of homes rise — especially for households with significant assets, the basic coverages provided by a standard homeowners insurance policy are insufficient to cover the risks, leaving troubling gaps that can leave your home in jeopardy, along with your savings, investments, and even future earnings.
High-net-worth homeowners insurance refers to specialized homeowners insurance policies designed to protect high-value homes as well as your personal belongings. Proper coverage for your personal belongings, like valuable decor, jewelry collections, and fine art is crucial — and personal property coverage is also where standard home insurance policies start to show costly coverage gaps. With a specialized high-net-worth homeowners insurance policy, you’ll enjoy higher coverage limits for your home and all the cherished items that make your home a ‘one-of-a-kind’ reflection of your family’s legacy.
You’ll also find the freedom to use your homeowners insurance policy as you choose. For example, some high-net-worth homeowners insurance policies let you choose whether to rebuild your home or receive a cash settlement following a loss. That’s a feature you won’t find with a standard homeowners insurance policy.
Another extra offered by some high-net-worth homeowners insurance providers is guaranteed replacement cost coverage for your home. Estimating the rebuild cost of a high-value home can be tricky. The cost of rebuilding unique construction features and distinctive touches can be difficult to estimate. With a standard homeowners insurance policy, often the risk of cost overruns fall to the homeowner. Specialized high-net-worth homeowners insurance policies can put this risk where it belongs — with the insurer — by offering guaranteed replacement cost coverage.
Liability Protection for High-Net-Worth Individuals and Households
Expect higher limits and broader coverages with a high-net-worth homeowners insurance package. Often, the coverage limits for personal liability protection included with your policy are higher than you’ll find with a standard homeowners insurance policy. This coverage forms the foundation for personal liability protection. However, for many high-net-worth households, this base coverage is just a starting point.
By adding an umbrella policy, you’ll increase the personal liability limits for both your home and auto policies and you’ll add some important new protections. For example, a customized umbrella policy can extend coverage for risks like libel and slander, which are more common risks than many people might realize in today’s digital age.
Umbrella policies often reach a coverage limit at $5 million. For many high-net-worth individuals and households, a higher coverage limit is appropriate. Excess liability insurance policies fill the need for coverage above $5 million while also bringing new coverages to better protect you and your family.
This tiered approach to liability coverage helps provide higher coverage limits and protection for an expanded list of risks at an affordable cost. Often, your cost per dollar of liability coverage is lower using this structure when compared to the cost of liability coverage on your home or auto insurance policies. Many clients prefer the protection this tiered structure offers because the list of covered risks is expanded and the combination of policies can raise the liability protection for both home and auto insurance policies as high as $100 million.
A personalized high-net-worth insurance package protects you both at home and away from home — or even while you travel. In addition to worldwide protection, your liability coverage can pay for the cost of your legal defense, which is often one of the most expensive parts of a liability claim. Typically, coverage for legal expenses for covered claims is outside of your coverage limits, which means you’ll still have your full limit available to cover settlements if needed.
Whether it’s an accidental injury to guests at home, a roadway mishap, or an online misunderstanding, a well-designed high-net-worth liability insurance package can help protect your family’s assets and help ensure your continued legacy.
Specialized Coverage for Household Employees
Nannies, caretakers, and other household employees are more common in high-net-worth households. While in many cases these household workers can feel like part of the family, often there can be additional risks as well. A high net worth homeowners insurance policy builds in protection for household employee-related liability risks.
Professional Liability Protection—Directors & Officers (D&O Coverage)
If you hold a board position or are involved in business pursuits in which you give advice, a standard homeowners insurance policy can’t protect you against liability that can arise from business-related activity. As part of a customized coverage solution, our high-net-worth insurance brokers and skilled agents can tailor your coverage to protect you from both personal and business-related risks.
A well-designed homeowners insurance policy can protect your high-value home and valued belongings against many risks, but homeowners insurance policies can also exclude some risks. Flooding and storm surge are among those risks that aren’t covered by a standard policy. Fortunately, our agents can customize coverage for floods and other perils, making sure your home is protected in every way it can be.
Cyber Liability in the Digital Age
In today’s digital age, cyber-liability is getting a lot of attention. Most luxury homes have a complex network of devices that can control temperature, lighting, audio-visual systems, cameras & more. Each one of the devices has their own vulnerabilities putting you at risk to be hacked. It’s common for hackers to attack financially successful families, by exposing their privacy for ransom.
In the last few years, many of the specialty insurers have a cyber-liability endorsement that can protect you in the event you’re hacked. If you choose to add this coverage, some insurance companies will send their cyber-tech team to your house to proactively test network vulnerability before the coverage becomes available on your policy. Cyber liability coverage varies from company-to-company, so make sure you read your coverage very carefully.
Partnering with High-net-worth Insurance Brokers
At Coastal Insurance, we work with high-net-worth individuals and families to protect what you’ve worked so hard to build. The risks for each household are unique. It takes experience and the right combination of coverages to fully protect your home and your family. With the right structure to your insurance coverage, you can protect your family’s wealth and secure your legacy.