As you manage the complex portfolios of high-net-worth clients, your role as their realtor or financial advisor becomes pivotal. Your clients often have extensive assets, including luxury properties and valuable collections, which require tailored insurance solutions.
Here, Vault shares valuable tips to help you ensure your clients receive the coverage they need. By understanding the key elements of insurance coverage and the importance of risk mitigation, you can offer invaluable guidance.
Related: Ensure Your Clients are Covered
Tip 1: Appraisals: The Foundation for Proper Coverage
Accurate insurance appraisals are crucial for securing the right coverage. Partnering with Vault, a company that specializes in coverage for high-net-worth clients, streamlines access to qualified appraisers for luxury assets.
Recommend that clients schedule an appraisal when purchasing new property and regularly update these appraisals to prevent underinsurance or overinsurance due to market changes.
Tip 2: Encourage Regular Insurance Policy Reviews
Advise your clients to periodically review their insurance policies with their insurance agents, not only when acquiring new assets but after experiencing significant life changes as well. These changes may include:
- Renovations: Home improvements can increase property value, requiring updated coverage.
- Marital Status: Marriage or divorce may necessitate adjusting policy limits or ownership details.
- Sale of Valuable Items: Buying or selling high-value items may affect specialized coverage needs.
- Business Changes: New ventures or changes in business assets may require liability adjustments.
- Estate Planning Updates: Changes in estate plans, such as creating a trust or transferring assets, may affect property ownership and require adjustments to insurance policies.
- New Liability Risks: Roles like serving on non-profit boards may require excess liability coverage.
- Relocation/Travel: Moving or extended stays abroad can impact insurance needs.
These reviews help ensure that their coverage aligns with their current situation, covering new risks and adjusting for changes in asset values.
Tip 3: Leverage Vault Custom Insurance for Tailored Risk Mitigation
Vault Custom Insurance offers tailored insurance solutions that are essential for managing and mitigating risks associated with high-net-worth clients’ unique lifestyles and asset portfolios.
Key Features of Vault Custom Insurance:
- Customized Coverage: These tailored insurance solutions fit the distinctive needs of each client, covering everything from high-value properties to rare collections, ensuring comprehensive protection across your client’s portfolio.
- Integrated Risk Mitigation Strategies: Vault’s proactive strategies include advanced security systems, automatic water shut-off technology, and fire-resistant landscaping. These measures protect clients' properties from natural disasters like wildfires and hurricanes while minimizing risk.
- Specialized Policies: With Vault, clients can access policies designed for specific risks, including collections insurance, home systems protection, and excess liability coverage.
Tip 4: Highlight the Importance of Excess Liability Coverage
Excess liability coverage offers an additional layer of security beyond the limits of standard homeowners insurance policies. This coverage is vital for high-net-worth individuals as it protects against the excessive costs associated with lawsuits or claims that exceed the limits of their primary insurance policies. This coverage extends to a wide range of incidents, including:
- Guest injuries on a client’s property
- Employment practices liability
- Non-profit board liability
- Crisis management support
Imagine a situation where a guest suffers an injury at a client’s estate during a private event. The medical expenses and potential legal settlements could far exceed the liability limits of the homeowner’s insurance. Excess liability coverage would step in to cover the additional amounts, protecting the client’s financial stability.
Or, if a client faces legal issues related to their role on a non-profit board, excess liability coverage can provide critical financial protection and support during these crises.
Recommend that your clients consult with their insurance agents to determine the proper level of excess liability coverage based on their assets and potential exposure to liability. This advice helps ensure they are not only aware of the risks but also adequately protected against them.
Related: Ensure Your Clients are Covered
Tip 5: Secure Collections Insurance for Valuable Assets
Specialized collections like art, antiques, or jewelry require collections insurance to protect against loss, damage, or theft—coverage that goes beyond what standard homeowners insurance offers.
Advantages of Collections Insurance:
- Tailored Coverage: This insurance can cover the full value of high-value items where homeowners policies will fall short.
- Condition-Based Protection: It also covers specific risks, such as damage from climate control failures or during handling.
- Security Recommendations: Implementing insurer-recommended security measures can enhance protection and may reduce premiums.
Tip 6: The Cost to Rebuild
A common question high-net-worth clients may ask is, "How much will it cost to rebuild my house?" Having a correct answer is essential for proper insurance coverage. This cost often differs significantly from the current market value and is key to setting adequate insurance limits.
Importance of Accurate Rebuild Estimates:
- Tailored Coverage: Accurate rebuild cost estimates ensure insurance policies are specifically tailored to cover the full scope of potential rebuilding expenses, including labor, materials, and compliance with current building codes.
- Prevents Underinsurance: Knowing the exact cost to rebuild prevents clients from being underinsured, which can lead to significant out-of-pocket expenses if the actual rebuilding costs exceed the policy's coverage.
- Adjusts with Changes: Recommend that clients reassess rebuilding costs periodically, especially after making significant home improvements or if local construction costs increase, to keep their insurance coverage aligned with actual needs.
For clients with custom-built homes featuring specialized architecture, determining the rebuild cost is crucial. This cost often far exceeds the home's market value, especially when unique materials or design elements are involved.
Tip 7: Relocation or Extended Travel
When clients leave their primary residence unattended or rent it out during extended travel or relocation, it creates new property management challenges. This situation may require adjustments to homeowners and excess liability insurance policies to address risks associated with an empty or rented property. Clients should ensure their policies cover potential damage, theft, or liability arising from renters, and any maintenance issues that may occur in their absence.
The Vault Difference
At Vault, we understand that managing the complex needs of high-net-worth clients involves far more than just insuring assets—it involves comprehensive risk management. Our tailored insurance solutions are specifically designed to safeguard the lifestyle and assets your clients have worked hard to build. Invite your clients to request a quote today and experience the Vault difference.
