Whilst insurance quotations may appear to be offering the same level of sums insured for your buildings and contents, this does not always mean you are being offered a like-for-like policy. The high net worth market can offer more comprehensive policies designed to meet the demands of your lifestyle and may offer less restrictive terms.
A thorough review should be carried out of each provider’s Insurance Product Information Document and Policy Wording where the ‘inner limits’ are highlighted, as these are likely to differ significantly. Some sections of cover really test a policy’s worth, examples of which we examine below.
Alterative Accommodation
Not all policies offer a comprehensive level of cover for alternative accommodation should your property be rendered uninhabitable after an insured loss. It is often restricted to a small percentage of the building sum insured.
If this is the case, it is possible it won’t provide a similar type of property to re-house you, or it may not be in the same location which could cause further stress and inconvenience.
High net worth providers can allow for a greater level of cover which varies generally between a maximum monetary amount such as the building sum insured, or between 3 to 5 years alternative accommodation as long as the cost is ‘reasonable’, i.e. in-keeping with your lifestyle.
Trace and Access
This cover is provided to locate a leak anywhere within the boundary of your property and to repair the damage caused in the process of finding the source, the cost of which can easily escalate particularly when underfloor heating is involved.
Water damage is more common than fire, theft and liability loss combined, yet standard markets may not provide trace and access cover as standard.*
If cover is included on a standard household policy, it can be limited and tends to start at around £5,000, while many High Net Worth insurers offer a minimum of £50,000 extending up to the building sum insured.
Single Article Limits
These are the limits that insurers will pay up to in the event of a claim for each item unless they are specified on the policy schedule. Insurers that we work with apply these in respect of artwork, antiques, precious metals, jewellery and watches, with amounts varying between £10,000 and £100,000.
Standard market policies may be more restrictive, may have lower single article limits and may request that any ‘high risk’ items within the general contents also be specified, including items such as TVs and furniture. This may prove impractical especially where purchasing habits involve higher-end brands and stores.
Average Clause
If you are unintentionally underinsured following a claim, an average clause (written into most standard policy wordings) can significantly reduce the claim amount you were expecting. For example, if you insured your jewellery for 50% of its true value, you could only receive 50% of the claim settlement.
Standard market insurers may be more likely to appoint a loss adjuster when a claim is made, and this is when the issue of underinsurance is brought to light.
It can be difficult to ascertain the combined and true replacement cost of your contents, especially if they are acquired over time. For this reason, as long as you are not deliberately underinsuring, the high net worth insurers we have access to will not apply the average clause.
We also have access to some of the leading and specialist valuers who, subject to a fee, are able to provide valuation reports should you wish to have a thorough review.
Worldwide All Risks
This is often referred to as personal possessions cover on the standard market, essentially providing cover for items outside of the home, including while you are on holiday. Cover is usually purchased as an optional extra, however high net worth policies may automatically provide cover for all of your belongings regardless of location for all insurable perils.
Security
Your insurance policy may be based on you having certain levels of security at your home, e.g. an intruder alarm. Sometimes a policy wording states a requirement to have your security measures in operation whenever you leave the property and this is usually the case in the standard market.
The high net worth market reviews claims on an individual basis, and will not necessarily decline to pay in the event you omit to use all available security at your home. Of course, we would always encourage you to make your property as secure as possible.
* news.na.chubb.com/blog-2020-08-18-Smart-Way-to-Help-Prevent-Water-Damage-in-Your-Home
With our expertise in serving High Net Worth clients, we are committed to providing you with a blend of service, product and price to meet your insurance needs.
These are brief product descriptions only. Please refer to the policy documentation paying particular attention to the terms and conditions, exclusions, warranties, subjectivities, excesses and any endorsements.
