Most individuals select their insurance agent during the purchase of their first car or home. Usually, that insurance person comes at the recommendation of a friend, family member, or maybe even more randomly via the phone book. Once a policy is secured, they never look back.
As time moves on, families grow, careers take off and the demands put on your insurance coverage change. With Moneta clients, it is not uncommon for families to have multiple residences or properties located in different states. Having homes in different states means having homes that require different kinds of insurance.
Consider this, in Missouri it is common for basements to have water issues such as flooding, sewage back up, pipes breaking, storm water problems, etc. Plus, given the humid environment in Missouri, mold is a problem that can cost homeowners big dollars, but is often under insured. On the contrary, a home or condo in the mountains or in the desert would likely require different kinds of coverage. Essentially, every home you own requires a thorough review—and one-size does not fit all when it comes to home owners insurance.
In addition to insuring your properties in different states, high net worth families often have jewelry, art collections, fine wines, unique cars and collectibles that need to be insured.
Affluent families often have recreational properties with boats, jet skis and ATVs, shooting activities, or other recreational sports—all of which require additional considerations in terms of property and casualty insurance, as well as careful consideration as to how assets are owned. For example, should these properties be owned individually, jointly, or perhaps in an LLC or separate trust?
Many of the major stressors of protecting your assets can be alleviated by working with a trusted agent who can provide creative solutions as well as objective and unbiased advice. Ideally you should have one truly professional property and casualty advisor who can coordinate all aspects of risk management; this ‘big picture’ approach will give you the best opportunity to limit gaps in coverage.
The most important coverage available to protect families from exposure to liability is an umbrella or excess liability policy. One aspect of umbrella coverage that is often overlooked is the underlying insurance limits required on homes, cars, and other personal and real property. The liability coverages on these items must meet a minimum coverage requirement in order for the umbrella policy to function properly.
Not meeting these minimum limits can result in a significant coverage gap and financial obligations that could have, and should have, been protected by insurance; so be sure to review your minimum coverage requirements with your insurance broker.
Accidents and disasters happen, and we live in a very litigious society. As a result, insuring your family and assets has become increasingly complicated, especially as your real and personal property assets grow. Rather than navigating this maze yourself, align with an advisor that you trust and that you feel provides comprehensive and thorough coverage for you and your family.
As always, if you have any questions, feel free to reach out to your Moneta Group team.