How high-net-worth (insurance) changes the game
There has been a lot of insurance disruption in the past 5 years
What have you been up to in the past 5 years? Take a second to think about this question. Personally speaking, there has been a lot of change. But when I think about this question in relation to the insurance marketplace, my eyes open wide. There has been a huge shakeup and change in this quiet and misunderstood space.
In this blog post, I’m pulling the curtain back on the personal insurance marketplace and the different types of personal insurance carriers out there. As an insurance agency fully emersed in the personal insurance space, we have witnessed sudden market shifts and changes with new competition, especially in the high-net-worth or high-value insurance space. If you haven’t paid attention to your insurance in the past couple of years, now would be a good time to check in and review your program and take advantage of these changes.
The High-Net-Worth Space vs. All Others
I’ve separated all the insurance carriers that offer home insurance into two groups: "high-net-worth” (or “high-value”) and “all others,” sometimes also known as the “standard market” in the insurance community. As I write it out and think about it, it’s all in the name.
High-net-worth (or high-value) market, superior.
All others (or standard market), average.
To keep things as simple as we can, we will be comparing the personal insurance marketplace to the automobile market, a place where brand names define it all without having to explain the why. Also, it’s a little sexier to compare insurance to, well, anything other than insurance, are we right?
What makes high-net-worth or high-value carriers different?
In the personal insurance marketplace, there are two basic insurance tribes:
The high-net-worth, high-value, or private client insurance space.
“All Others,” aka “standard market.”
Some carriers with high-net-worth, high-value or private client insurance offerings include Chubb, Pure, Cincinnati, Vault, AIG and Berkley One. These carriers offer superior coverages and coverage limits, higher limits, elite services, and unmatched claims experiences. They are the industry leaders. They also offer coverage on exposures that generally other carriers will heavily (scrutinize) underwrite or say no to (i.e., historic homes, fast cars, pets, trampolines.) Known for providing their customers with a seamless claims experience, white glove customer service, and additional benefits, this group is considered best-in-class. These carriers have the capability and capacity to offer more, and they offer the best. In the automotive industry, insert your Tesla, Benz, BMW, Land Rover, Bentley, and Porsche labels of the world here.
The other homeowner insurance carriers that are not listed above fall into the “All Others” group or “standard market”. They offer coverage and services, but with restrictions on how much, what they will cover, where they cover, and coverages they offer. They’ll likely vary in their claim-handling, loss control and program service, too (in a frustrating way). In the automotive industry, these are the Toyota, Subaru, Volkswagen, Ford, and GMC brands.
Before we discuss the coverage differences between the two groups, let’s address the elephant in the room. If you’re looking for the best-of-the-best in insurance, you need to work with an insurance agency that not only has access to the high-net-worth insurance market space, but is also specialized in working in the high-net-worth world. If you think this is irrelevant because you assume you’re not high-net worth, keep reading. Trust us.
Are you considered high-net-worth in the world of insurance?
The answer is maybe. When you think about a high-net-worth, affluent, or private client, you likely have a preconception of who fits this mold. It’s easy to automatically become disenfranchised.
But, wait - stick with me.
While these insurance carriers do write for the wealthy and ultra-wealthy (think multiple homes, mansions, mega yachts, jewelry, fine art collections, luxury vehicles, and antiques), there’s a chance you might be included in this group. If you meet minimum coverage requirements and are willing to pay a premium for the best coverage, service, and claims experience, this may be your ticket “in.” If this is what you value, you can be insured by the best. The minimum thresholds are not as extreme as you might think, depending on the carrier. And the high-value marketplace has changed dramatically (with more options and competitors in the space) over the past five years. For example, if you have a property that is currently insured around the $750K mark, you may qualify. If you are a renter or live in a condo, the threshold is much lower. Given the circumstance of having a primary and secondary home with autos, collections of some sort (i.e., jewelry, art, wine) and an excess policy, you can most likely be insured by a high-net-worth insurance company should you choose, and if you’re willing to pay it. Just like with the luxury automotive market, it may cost you more to be insured by a high-net-worth insurance carrier. But, you’ll sure get a lot more in return.
High-Value Home, Auto, Collections, Excess limits and coverages
What are the coverages that premiere insurance companies offer that the others can’t?
Here’s some highlights:
Concierge-level claims service and response
Guaranteed replacement cost to repair, replace, without question
Unlimited loss of use
Agreed-Value on your autos
High coverage limits available
Under and uninsured motorist, up to $10M
World-wide protection
Employment Practices Liability (EPL), up to $250k for domestic staff
Non-Profit board liability (D&O), up to $1M
Available choice of legal counsel
Included personal attorney participation in defense
Defense costs - Outside policy limits
The evolving marketplace
All insurance carriers have their unique limits, coverages, underwriting requirements, and limitations. They are continuously updating their coverage offerings and creating new solutions. There is new competition, too. The homeowner insurance carriers that appeal to the mass market (the “All Others”) have started to offer key coverage and benefits to compete. This is why it’s critical to work with a reputable insurance agency and licensed insurance agent that you trust.
The insurance marketplace is complex, tricky to navigate, and you need a qualified professional that knows this space inside and out. Whether you have a lot to protect (or lose) depending on your risk management approach, take the time to choose your carrier and policies that best protects your life and what you are most worried about. As an immediate next step, talk to your insurance agent to understand the type of program you have, ensure it’s enough, and review limits each year as part of your care and maintenance plan.
Depend on a partner you can trust
NaVella was created out of equal parts love and frustration with the insurance industry, its complexities, and the ever-evolving market space.
With more than 16 years of experience in multiple facets of this industry, 1000+ insurance policies analyzed and reviewed, and hundreds of customized insurance portfolios crafted, we are dedicated to giving you control over what and how you protect what you care about most.
We are a woman-owned, progressive, independent insurance agency and consulting firm. We offer personal lines insurance solutions. Our product solutions include insurance for your: Home(s), Auto(s), collection(s), Excess + Umbrella, watercraft, and Life. Our consulting and coaching services serve both personal and corporate clients. Headquartered in Massachusetts, and primarily focused on the Massachusetts and greater New England markets, we can write nationally.
If you’re ready to protect yourself now and in the years to come, please visit us at www.navellains.com, or email us at hello@navellains.com.
Manage your insurance and live your life. Partner with us.