Managing The Risks Of High Net Worth Individuals: Their Homes, Collections, Cyber Security, and Lives
Designing insurance coverage for managing the unique risks of high net worth individuals has always been an agent’s primary focus, with loss prevention often a secondary issue. For today’s high net worth individuals, loss avoidance is equally as important as the coverages for protecting their lives, homes, collections, and cyber security.
For decades, a trio of insurance companies has specialized in high-valued homes and their contents. Recently, however, the three have become one, dramatically changing this market segment. However, others see an opportunity and are entering this market with their own competitive programs.
Several factors play a key role in writing the coverage for high-valued homes including the location, a company’s appetite for business, experience in the area, and the catastrophic history, from wildfires and hurricanes to earthquakes. Together, they help explain why pricing can range widely from company to company and can change from one year to the next.
High net worth individuals have always expressed their personal interests by collecting rare books, art, jewelry, coins, automobiles, and many other items. While that continues unabated, there is a move on the part of some to turn personal interests into investments, which places an even greater need for serious loss prevention.
As yet, there are no cyber security insurance policies designed specifically for individuals. This is not due to a lack of interest, however. Rather, insurance companies are sorting out the complicated and rapidly changing risks involved, such as the evolving Internet of Things.
However, there are policies covering identity fraud expenses. One company offer coverage up to $20,000 and another up to $100,000.
Even so, it can be worthwhile to explore the services of companies such as LifeLock, Identity Guard®, IdentityForce®, and IDShield. LifeLock, for example, has a $1 million limit and comes with credit monitoring, information protection, recovery services, along with others for $14.95 a month.
Lives—Kidnap & Ransom
Those with a high net worth and who travel overseas or to Mexico should seriously consider adequate kidnap and ransom protection. While your homeowners policy may provide kidnap coverage, the chances are it is quite limited, such as traveling expenses, mailing costs, professional expenses and loss of income, unless you are retired. It’s worth noting payment of ransom is an exclusion.
However, kidnap and ransom standalone policies can help protect a family, including grandchildren with ransom limits up to $5,000,000.
Kidnapping for ransom is a real threat to U.S. citizens traveling or working abroad in high-risk regions, such as Mexico, Central and South America, the Middle East, India, Africa, and the Asia Pacific. The proliferation of terrorist groups, drug cartels, and other crime organizations, combined with new technologies that make it easy for criminals to identify individuals and families with significant net worth, make it necessary to consider kidnapping and ransom insurance.
A comprehensive policy reimburses for all expenses incurred with a kidnapping, most notably ransom, extortion, detention, or hijacking. Other benefits can include unlimited expenses for a Crisis Response Team, lost income, attorney fees, costs of travel and accommodations, fees and expenses of a private investigator, and psychiatric expenses.
Costs vary depending on the type of coverage, benefit amounts, who is being insured, and the risks of the location.