1. Limits of Liability
Does your Limit of Liability match your net worth? We often see clients with standard carriers that only have a $1 million or $2 million umbrella policy. Standard carriers and agents often don’t understand the risk that those with more assets face and cannot adequately provide the coverage necessary.
2. Naming on Insurance Policies, Deeds and Titles.
Are all policies in the proper names? Are the vehicles titled correctly? These are major mistakes that can cost you coverage. The “Who”, “who is a named insured” is one of the most important things to get right on an insurance policy. This gets increasingly more complicated with Trusts, LLP’s and LLC’s for agents who do not work in this space; often leading to major gaps in coverage.
3. Domestic Staff
There are numerous issues surrounding domestic staff that need to be addressed. How are they paid? Who determines when, how and what they do? Most people do things with their staff that they would never do in a business setting. Would you ever hire someone without a background check? Would you pay your employees in cash? Would you leave your bank/credit card statements where they could read them; what about password lists?
4. Hobbies & Collections
Do you have your collections, jewelry, art insured? While homeowner’s insurance policies limit coverage for these items, standard insurance companies do little so resolve the issue. Most limit scheduled collections to $100,000 and make you jump through a dozen hoops to get coverage.
5. Messy Insurance Programs
How many insurance agents do you have? Often people will have multiple agents when they have secondary homes or investment properties. The problems arise when none of the agents know or care what the other agents are doing? Yes you may have State Farm on both homes, but that does not ensure that the transfer of risk is set up appropriately. We regularly see secondary residences without liability coverage because of failed communication.
6. Under-insured Values on Properties
What is your current coverage/ft.? How was that number established? In the High Net Worth space, what we often see is homes insured at their purchase price or some reduced amount because of land value. Because most standard insurers have relatively low expectations for replacement cost this often puts clients being vastly under-insured when it comes to replacing their property after a catastrophic loss. What would it really cost to re-build your home? What would the cost be if your preferred builder was unable to build it? What would it cost if there was a shortage of materials?
7. Adult Children
Adult children present a number of issues when it comes to affluent & high net worth families. What we see most often are adult children on their parents auto policies when the vehicle is titled in the child’s name. The problem lies with “who is a named insured” and insurable interest. While parents have good intentions to help their adult child, they can be setting up situations that leave them greatly exposed or the child uninsured.
8. International Travel
With International Travel comes a ton of misconceptions. The most common of which is “I’m covered in my rental car by American Express…” While American Express my cover the vehicle as secondary vehicle damage coverage it does not provide coverage for liability. It also excludes a number of vehicles as well. What about boat or jet ski rentals in Mexico?
9. Absence of Review
What we see the most in the absence of review are properties whose policies are not named correctly, properties and vehicles not listed under the umbrella or excess and often times coverage that was designed for you when you were in a different place in life. This process is fluid and should change with you.
10. Undisclosed Exposures
What isn’t obvious and what most agents don’t ask about can lead to massive gaps in coverage. What about unregistered vehicles? ATV’s, Dirt bikes, golf carts, all need to be covered and need to be included under the umbrella/excess. While the best intentions of not letting anyone use them seem fair, it doesn’t happen that way in the real world. Here we need the coverage. Not just limited to those things, often clients have art in their offices that is not business property… What hidden things are lurking in your portfolio.