Most wealthy individuals and families who insure their assets with carriers geared primarily for the average U.S. household overpay for coverage that leaves their wealth unnecessarily exposed to the risk of severe financial loss, according to an ACE survey of independent insurance agents. High net worth (HNW) families often do not carry enough liability coverage in a variety of forms. Too often, their homes and collections of jewelry, art, wine and other precious items are not adequately protected. Meanwhile, these families also overlook many savings opportunities, such as higher deductibles and package discounts. By taking advantage of these savings opportunities and strengthening coverage against severe loss, HNW families can often achieve more effective protection without a significant increase in premiums.
These findings are presented in a new whitepaper released today by ACE Private Risk Services, the high net worth personal insurance business of the ACE Group. The study, Wealth at Risk: How High Net Worth Families Overpay to Be Underinsured, surveyed more than 600 independent insurance agents and brokers about their new HNW clients previously insured by a mass-market carrier. The full research whitepaper can be found here. The study includes comparisons to 2010, when a similar survey was conducted, and shows that the problem of overpaying and underinsuring has worsened.
“Financially successful families and individuals often fail to adjust their personal insurance programs as they build wealth,” said Robert Courtemanche, Division President, ACE Private Risk Services. “Unless they have a severe loss, they never realize their agent and carrier no longer have the expertise, insurance coverages, and services to fully meet their needs. But by then, it’s too late. Ironically, if they had looked for an agent and carrier better suited to their current level of achievement and lifestyle, they probably wouldn’t have had to pay much more for better protection. In many cases, they could have paid less.”