Owning precious valuables can sometimes be worrisome. On the one hand, possessing unique and expensive objects such as art, jewellery or an expensive home can be a source of pride and imbue you with a sense of distinction. On the other hand, these objects can create additional burdens, constantly requiring security and special consideration.
How can you reconcile these two perceptions? Secure your commodities and your peace of mind by purchasing a high net worth insurance policy.
Who Needs It?
Standard insurance policies will meet the needs of most customers. However, a high net worth policy benefits customers who have particularly valuable assets, such as an expensive home, a collection of fine art, high-end jewellery, yachts, motor vehicles and more. Standard policies may not encompass customers’ full range of assets, providing an insufficient sum insured or one that cannot account for the sheer volume of valuables.
Because they cover such a wide variety of valuables, high net worth policies are often composed of several different covers which, together, constitute a single policy. The following sections describe some popular covers available as part of a high net worth policy.
Buildings Cover
Your luxury home is one of the largest and most expensive purchases you will ever make—forgoing high value buildings insurance may condemn your high value property to ruin in the event of an accident or emergency.
As part of a high net worth insurance policy, ‘buildings’ is likely defined as the main dwelling, outbuildings, garages, swimming pools, tennis courts and other features on the property. High net worth insurance policies typically extend cover beyond the limits of a standard policy to include buildings and features ancillary to the main house.
Due to its expansive nature, insurers usually offer buildings cover, and most other high net worth covers, on an ‘all risks’ basis rather than a hazard-specific basis. But offering ‘all risks’ covers does not preclude insurers from issuing cover exclusions—they sometimes exclude damage caused by domestic animals, frost and more. Always read your policy wording to know what you are covered for.
Contents Cover
Contents are generally defined as the personal property which you own. This can include furniture, furnishings, household goods and personal effects.
Most high net worth insurance policies provide contents cover on a ‘worldwide’ basis, meaning it covers belongings wherever they are in the world for the entire period of insurance. Worldwide cover is especially attractive to people with multiple homes or those who travel extensively. Rather than arranging separate policies for the personal property spread across several countries, customers can purchase a single, comprehensive worldwide contents policy that protects their belongings—no matter where they are.
Extensions to contents cover can include alternative accommodation, home office equipment and guests’ effects. Exclusions can include loss caused by government confiscation, repairs and pets. The list of extensions and exclusions to contents cover can be long—pick a policy that insures the full spectrum of your contents.
Valuables Cover
Depending on your policy, your valuables—items such as gold, jewellery and furs—may be covered under your contents cover. Insurers also offer separate valuables cover if customers have a specific list of valuables they would like to protect, such as fine art, antiques and collectibles.
Extensions include cover for newly acquired valuables, pairs and sets, and an increase in sum insured due to the death of an artist. Exclusions can include dented or faded stamps and coins, losses during transit and damage caused by alterations.
Liabilities Cover
As the owner of a house or employer of domestic staff, you unavoidably expose yourself to legal liability. Liabilities cover protects against liability claims related to your property or household employees. For example, are there public rights of way across your land, or do you hold public events on your premises? Inviting or allowing members of the public on your property greatly increases your legal liability. Mistreating employees or failing to provide a safe working environment in your home makes you liable for any employee injuries or deaths that occur.
Insurers may fold legal expenses cover into liabilities cover. Legal expenses cover defrays the cost of pursuing claims against another party, arising from, for example, an accident that causes death or injury to the insured or a dispute over a contract.
Additional Covers
There are many more additional covers available as part of high net worth policies, such as:
Small craft
Caravans
Second homes abroad
Family protection
General Exclusions
Exclusions, including those listed below, typically apply to most high net worth policies:
War
Faulty workmanship
Nuclear hazards
Terrorism
Make sure you read your policy to know all applicable exclusions.
Insure Your Legacy
Protect your legacy—and the things you have worked so hard to obtain and expand. One disaster can cause a ripple effect, divesting you of the products of your hard work!