When you put a lot of money in your property, it means that it is worth a lot. It also means that you are worth a lot. Two good reasons to protect your assets. That’s what a homeowner’s policy is for. Whether it is a good investment is not even a relevant question: the fact is we all need it. It is required to qualify for a secured loan and it is essential to sleep at night.
A couple of months ago, I had a nice discussion over lunch with a friend and a top pro, David Costello, who is running “Cause Insurance” in Northern California. He gave me an education on the menu of exclusive coverage options for the luxury market, options that are part of what he refers to as “ Private Client Group Services.” Here is his brief summary of the types of coverage often sought by the elite:
- Wildfire Protection Unit: if a fire is approaching within 3 miles of your home, the Wildfire Protection Unit, at no charge, will come out and spray the house with an organic fire retardant.
- Mechanical Breakdown Coverage: can be added to cover electronic gates, pool filtration systems, smart house electronic systems, home theaters and wine cellar refrigeration units.
- Excess Liability Umbrella: direct writers usually max out at $5M for personal umbrellas; private clients limits start at $5M and can go up to $100M.
- Double the stated homeowner’s policy limit (200%). A typical direct writer would go up to 120%. If a $1M home ended up costing $2M to rebuilt, many direct writers would stop at $1.2M.
- 3rd Party Liability Coverage: can be offered as part of the personal umbrella. As an example, if a balcony gave way causing bodily injury to you, you may sue the owner and get a $2M judgment against him. If he has only $300K of liability coverage, you can turn to your policy and whatever limit you have purchased will pick up the difference,
- Umbrella with Defense Costs in addition to the umbrella limit, with the ability to select an attorney of choice from leading national law firms.
- Non-Profit Board Liability: If you are serving on a board (such as a Homeowner’s Association), your umbrella can be endorsed to include an extra $1M in protection (up to 5 boards).
- Agreed Value Coverage on Automobiles: if your car was a total loss with a typical carrier, it would be adjusted on an “Actual Cash Value” imposing depreciation for wear and tear & prior usage. The affluent market allows for “Agreed Value” replacement cost.
- New Vehicle Replacement Coverage: if you purchase a new car and total it 3 years later, it could be replaced with a brand new model.
- Rental Reimbursement: a typical carrier may give you up to $50/day for 30 days max to rent a car, while the better coverage allows up to $12,500 to get the vehicle of your choice with no time limit.
- Ability to consolidate a client’s personal assets worldwide as a package.
- Kidnap & Ransom Coverage available when traveling outside the USA.
- 150% Coverage Extension when scheduling fine art and jewelry: you schedule a $100K diamond and can replace for $150K due to the increase in the price of gold, etc.
- Earthquake Insurance to include $500K in contents coverage and up to $120K in loss of use coverage on the house.
- Concierge Level Claims Service: claims adjusters erring on the side of the client to reach top customer’s claim handling satisfaction.
Of course options vary, depending on who, what and where. Do the checking. By the way, I did not mean to scare you with all this. It is just part of a homeowner’s life. Best to be prepared.