3 Questions High Net Worth Homeowners Ask About Their Insurance

Today I want to share with you three questions that high-net-worth individuals will ask that everyone else does not.

And my reason for sharing this with you is actually a study from Plymouth Rock, which kind of highlights the differences in what's important to different demographics of homeowners.

And what was blaringly obvious to me was something we found in our office here at Rogue Risk. Because we work with the full spectrum of homeowners.

We have individuals who have home insurance values of $2 million and above, all the way down to people who own mobile homes because of good coverage, good service, and caring.

It shouldn't matter how big or expensive your home is.

But what's interesting is the individuals who own these different types of properties approach their homeowner's insurance in different ways.

And I thought it might be interesting to you to know that this study lines up with what we found.

So there are three things that often are most important that I get questions about from the wealthiest individuals who do business with our agency,

These three things have to do with the financial strength of the carrier, their claims handling ability, and finally, their liability.

And so, what are these three things, and why do they ask about them?

the financial strength of a carrier

First is the financial strength of a carrier. Why would you even care? There is an assumption that if you purchase insurance from a carrier, that carrier's just always going to be there.

And that if something happens, you're always going to be protected. That's not necessarily the case. Now, if you're purchasing, it depends on what state you're buying homeowner's insurance in.

Our headquarters for Rogue Risk is in New York. So if you purchase homeowner's insurance in New York, there is a backstop that the state has if a company were to dissolve.

But that's not really why financial strength is the most important. It is not because of the size of your homeowner's insurance policy.

Even if you're some of the wealthiest individuals in the world, most carriers are still going to be able to cover that, even if they're having financial problems.

The bigger issue when it comes to financial strength is ultimately pricing variability, which means their pricing might come down and then shoots back up.

That's not what you want to be dealing with. Because now, in order to keep the best price, you're constantly switching coverages, and constantly switching carriers. It's not good.

And ultimately, for our high net-worth individuals who do business with us, the financial security and stability of a carrier are very important.

Because they don't want to deal with that. And they know that it's an issue.

And what I'm saying to anyone who isn't necessarily purchasing a high net worth policy is it's okay for you to care about that too.

Because you're impacted the same way they are in terms of pricing fluctuations. So just consider that.

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How are claims handled?

Number two, claims. How are claims handled?

If you go with a cheap, fast, and easy digital online carrier that was started four years ago, it's fine if you choose them, but understand that they're most likely outsourcing their claims.

And if you outsource the claims, it means you're getting an independent contractor who could give two flying craps about you or your home or the damage done to your home when they come out to adjust it.

Where in contrast, there are carriers who have superior claims handling, such as Hanover Insurance, Chubb, or if you're in New York, New York Central Mutual.

These are companies who care, who are responsible, who are held accountable for their decisions, who are looking to make you whole, and who are helping you.

Now, some people go, "Ah, Ryan, that's BS. Carriers don't care." That is wholly untrue.

There are absolutely, positively insurance carriers that dedicate what they do to helping their policyholders be financially brought back whole after a loss.

And then there are carriers that don't really prioritize that. It's my job to make sure you're put with the ones that do if that's something you care about.

liability

And the last one is liability. Liability is where you can have your largest risk. You can max out. You say your home is worth 300,000 bucks to replace. It would cost $300 to replace your home.

You're maxing out at a $300,000 loss if that home comes all the way to the ground. Well, that's a big loss, don't get me wrong.

But if someone dies in your backyard because they leap your fence and they drown in your pool, when you're not home, you're on the hook for the entire lawsuit.

That's going to be filed against you on what's called an attractive nuisance, in a pool, trampoline, swing set, or anything like that.

You are going to be held responsible. State laws vary, but particularly in the Northeast, a lot of the states are similar. You're going to be held responsible for that death.

That lawsuit's coming against you, and your homeowners will pick it up to the max that you have liability.

So I find that my high net worth clients, the wealthier clients I have, they're always interested in maxing out their liability.

Liability is super cheap versus the coverage you get.

So consider that. Think about it.

These are the questions that I get.

But none of these things are things that anyone who doesn't have a high net worth policy shouldn't think about either, or can't think about or can't afford.

These aren't things that necessarily make the policies more expensive, which I think is interesting.

READ NEXT: Buying Homeowners Insurance: Expectations Vs Reality

The Rub

When it comes to insurance for high-net-worth homeowners, there is a lot to consider.

Doing research and working closely with an insurance professional is one of the best ways to ensure that you choose the right policy for your situation.

With the right information, you can make an informed decision when it comes time to purchase insurance for your home and property.

This is where we come in at Rogue Risk.

If your current insurance professional has never addressed issues like this with you before, I’d encourage you to reach out to us today.

• You can call or text us at 518.960.6600
• Click here to contact us via email.

I look forward to introducing you to a new way of viewing your insurance program.

Thank you,

Ryan Hanley