What is high net worth insurance, what benefits does this type of insurance offer, how much does it cost and who is it suitable for?
High net worth insurance is the term used by the insurance industry to describe policies covering the personal insurance requirements for wealthy individuals.
What does High Net Worth insurance cover?
High Net Worth insurance covers one or more classes of insurance protecting the assets and liabilities of the Insured.
In essence it is an amalgamation of personal insurance products which can include buildings, contents, specified items (e.g. art work and jewellery), liabilities, legal expenses, travel, motor vehicles and yachts.
The covers can often be extended to include risks overseas, depending on the insurers’ ability to provide insurance the territory requiring cover.
What is different about High Net Worth insurance?
The key differences with High Net Worth insurance is the insurers’ attitude towards the underwriting of the risk and availability of cover outside of the scope of standard personal lines insurance products.
The insurers’ perception is that price is not the fundamental and overriding factor in the decision to purchase the insurance, but the Insured is risk aware and places value on the cover and services provided. The underwriting and products provided reflect this.
High Net Worth insurance providers are very flexible in their approach and are able to provide higher cover limits/sums insured, wider cover and more services than with standard products.
High Net Worth insurers take a different view on high value and high risk assets, and are willing to insure very high value property, including prestige and sports vehicles.
Am I a High Net Worth insurance customer?
High Net Worth insurance is not available to everyone, as there is usually a minimum asset value requirement to qualify for the product. These qualifications vary by provider, but would typically be something like a minimum sum insured on Buildings of £500,000 or Contents of £100,000 or a vehicle value of £50,000.
Why should I buy High Net Worth insurance?
The key reasons for buying High Net Worth insurance are the cover it provides and the convenience.
High Net Worth insurers can provide very high limits with very few restrictions or conditions attaching to the cover. Often the insurer will undertake a survey and provide valuations. Provided the insurer is happy with the nature of the risk on survey and cover is placed in accordance with the valuations, cover may be given without any onerous conditions such as alarm requirements or Average clauses.
High Net Worth insurers may be able to cover vehicles and drivers unacceptable to the normal motor insurance market, or cover that is not normally available such as ‘Driving Other Vehicles’ on a Comprehensive basis.
Overseas assets and vehicles may be covered.
All of the insurances may also have the convenience of being covered under a package with one insurer, meaning only one renewal and review to be concerned with.
There are an increasing number of High Net Worth insurance providers, as this is seen as lucrative and stable business.
The nature of the business is that no two risks will be the same and the expertise is in identifying the requirements and obtaining the appropriate cover.
The majority of High Net Worth insurance is placed through insurance brokers and an experienced and professional broker should be able to obtain a range of quotes matching the cover requirements. As no two policies are the same, it worth spending some comparing quotations and ensure the best quotation in terms of cover and value is selected.