The Top Insurance Planning Tips for HNWI
We reached out to Ryan Ferrer from Momentous Insurance Brokerage to hear his top insurance planning tips for high-net-worth individuals.
Neglecting your insurance can be the difference between protecting your assets or paying out of your own pocket.
An insurance broker’s duty is to advise and educate clients about the coverage offered, and why the coverage details are more important than selling price. And this is especially true for high-net-worth clients. Brokers must recognise that these clients are not just high-profile and wealthy, but that they are individuals with multiple interests, involved with many different types of business ventures and non-profits outside of their primary carrier. Brokers should research who a new prospective client is, what they do, who are they associated with, and even look at their social media accounts to get a better understanding of what type of insurance they will need. When a broker can comprehend their client’s lifestyle, career, and aspirations, they will better connect with the client.
There are always challenges when dealing with high-net-worth individuals. In the last five years, many of the personal lines insurance markets have tightened up their underwriting guidelines making it more difficult to place policies. California alone has gone through drastic changes due to the recent wildfire history. Homes that carriers once considered “favourable risk” are now being declined by underwriting due to the of location (wildfire/brush exposure), year built, maintenance of the home, or whether the home meets current earthquake building codes. Underwriters are also looking at the insured’s profile. An insured’s involvement with certain business ventures such as marijuana, any recent negative press, and even the size of their social media presence may all play a factor in the carrier’s decision to offer coverage. Social media is a big part of today’s society and having a big following can determine approval on liability. Unfortunately, all it takes is one bad post for a high-profile individual to receive significant negative press. And sharing the wrong information may, justly or not, lead to legal action and a resulting claim.
Brokers are adapting to this changing market, and strategically placing coverage with non-admitted carriers such as Lloyds London, Scottsdale, and AZGUARD. When placing coverage with these carriers, the broker must keep in mind the differences in coverage between an admitted carrier (e.g. AIG, Chubb, Cincinnati, Pure) and non-admitted carriers. For example, in California, an admitted carrier can offer workers’ compensation for household employees while a non-admitted carrier cannot. Moreover, an admitted carrier can offer broader endorsements such as Guaranteed Replacement Cost, Agreed Value, and higher limits for Water/Sewage Back-Up and Mold. A broker must understand all these differences and evolve with the markets to help make sure our clients are insured properly.
Since the beginning of the COVID-19 pandemic, the personal insurance industry has gotten busier. Many high-net-worth individuals now have the time to review their insurance policies, understand their coverage, and depending on their financial situation, figure out ways to save money or help better protect themselves by adding coverage.
Since the beginning of the COVID-19 pandemic, the personal insurance industry has gotten busier. Many high-net-worth individuals now have the time to review their insurance policies, understand their coverage, and depending on their financial situation, figure out ways to save money or help better protect themselves by adding coverage. With the rapid shift to tele-work, some insureds are reconsidering the location of their home. It may no longer be worth paying an insurance premium equivalent to a mortgage if their location no longer provides the benefits it once did. Every situation is different. Momentous Insurance Brokerage is a full-service brokerage dedicated to providing the highest calibre of insurance and risk management consultation. Our strength and focus are providing insurance and risk management solutions to high net-worth individuals, executives, and celebrities. We understand the day-to-day urgency, complexity, and confidentiality issues that surround our clientele. Innovative, out-of-the-box thinkers, we go above and beyond to protect our clients’ assets and offer concierge services that are beyond compare.