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High Value Home Insurance Coverage White Paper
October 21, 2009
John Howard Payne’s popular 1823 song “Home, Sweet Home” acquired immortality in American culture as it tapped into the consciousness and history of people who were building up new ideas of what home should be. Throughout the history of America, the promise and dream of owning one’s house and yard has become synonymous with the American Dream. In fact, American ambition and economic security have informed dreams of owning property so strongly that they have altered house design and the path of business. And because there has never been a national land-use policy in the U.S. and because the single-family house has long been the dream of the majority of families, a strong system of protecting homes has gradually developed. The goal of this paper is to examine high-value home insurance, which may be the most important type of home protection for those who have attained the American Dream, and to introduce Stuckey & Company’s vision for such protection.
Correcting False Assumptions About Homeowner Coverage
The need for home insurance is not only based on the homeowner’s desire to protect their investment, but also on the policy of linking mortgage contract finalization to adequate home insurance coverage. Even with this connection in place, the existence of gaps and problems with actual coverage arises. Consider the increasing risks of catastrophic events that affect property. Both man-made and natural disasters have occurred with increasing frequency and have resulted in increasing losses during the past few decades. And unlike automobile insurance which is often termed “high frequency, low severity” risk, home insurance is a “low frequency, high severity” risk. One reason for the gaps in coverage is due to the great variety of home insurance types which has the effect of confusing homeowners. Inadequate home insurance is often the result of coverage assumptions that turn out to be wrong, and for this reason Stuckey & Company details their approach to the special needs of high-value homeowners.
Affluent Homeowner Insurance Must Be Tailored
All homeowners should be centrally concerned with protecting their home’s physical structure and personal property. But in addition, homeowners must protect themselves against liability for accidents that injure other people or damage their property. These three needs are even more important for affluent clients because their homes and properties are often much more complex and require insurance that goes beyond the basic coverage of mass-market home insurance policies. Stuckey & Company’s High-Value Home Insurance is specifically tailored to meet the needs of affluent clients whose homes are valued in excess of $1,000,000. Charles Williamson, the president of Chartis’s Private Client Group, explains, “many extremely affluent clients are like small companies and require services similar to those of a commercial customer.”
Industry reports confirm what Williamson says. According to new research by the National Association of Insurance Commissioners, 33% of US. heads of household who own a home and have homeowners insurance mistakenly believe that standard homeowners insurance protects them from a wide variety of perils such as sewer line breaks, wind damage, and flood damage. The survey reveals that many homeowners do not know that standard insurance does not cover water and mold damage and, importantly, does not cover liability should a person or pet get hurt on their property. And for clients who have complex heating, cooling, and electrical systems, or who may have several outbuildings, or who may have a historic home, the potential gap in coverage could have devastating financial repercussions should a catastrophe occur. Certainly floods, storms, and tornados are of primary concern when it comes to high value home Insurance, but affluent clients must also take seriously other threats, and therefore must cover landscaping, collections, and antique cars. Other options that affluent clients may need to consider insuring watercraft and aviation equipment. In addition, Stuckey & Company provides custom options such as kidnap and ransom coverage for high profile individuals.
Although the National Flood Insurance Program (NFIP) makes recommendations for a basic level of coverage, affluent clients require more knowledge and greater limits. And greater limits are not just necessary for water and mold damage risks. Umbrella liability is very important for wealthy clients. According to Walter Bell, National Association of Insurance Commissioners president and Alabama Insurance Commissioner, many clients do not closely read the fine print for key terms like actual cash value and replacement value. “It’s important that consumers understand this distinction,” says Bell. “In the event of a covered loss, an actual cash value could be thousands of dollars lower than a benefit calculated at the replacement value.” This is just one example of how affluent clients can suffer financial loss due to improper coverage. Agents must be especially attuned to the needs of their high net worth clients.
What Really Matters: Cost and Service
Two essential characteristics of High Value Home Insurance are cost and service. Stuckey & Company considers cost issues for their agents and clients. Important cost concerns such as flexible deductible and waiver options as well as custom floaters and riders are available. But perhaps the most important consideration to both insurance agents and their clients is service. Service is what sets many insurance companies apart, and service is also what enables agents to close the deal. Stuckey & Company prides themselves on “Concierge-level” claims handling for their clients who expect and require “kid glove” handling. Using streamlined computer applications and expert handling, Stuckey & Company knows that time is money, and therefore go from quote to coverage to binding in next to no time. According to Personal Lines Manager Jerry Lovin, “banks often request insurance policies rather than just quotes or certificates, and this is where Stuckey & Company is especially good.” He continues: “we are particularly good at fast turnaround.”
In this age of global travel and complicated financial arrangements, insurance agents need to know an enormous amount of information. Stuckey & Company helps put expertise at their agents’ fingertips. Stuckey & Company provides international protection and has the specialized knowledge to help high net worth clients understand their individual risks. Their specialists can provide expert service to solve even the most complex needs. From customizable coverage to excessive limits, they can offer agents flexible and powerful coverages.
Stuckey & Company Personal Lines specialists focus all their efforts on making sure each policy runs smoothly so that any unfortunate incident that may befall an affluent client is as stress-free as possible.
For more information about protecting the American Dream, contact the Personal Lines specialists at Stuckey & Company. Call Person Lines Manager Jerry Lovin at 800-828-3452 x 27.
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REFERENCES
Born, Patricia H. and Barbara Klimaszewski-Blettner. “Catastrophes and Performance in Property Insurance: A Comparison of Personal and Commercial Lines.” The Independent Institute.
2 September 2009. 5 Oct. 2009. <http://www.independent.org/publications/
policy_reports/details.asp?type=full&id=32>.
“High Value Home Insurance.” Stuckey & Company. 2008. 5 Oct. 2009. http://www.stuckey.com/products/personal/high-value-home-insurance.html>.
“John Howard Payne.” Encyclopædia Britannica. 2009. Encyclopædia Britannica Online. 19 Oct. 2009 <http://www.britannica.com/EBchecked/topic/447521/John-Howard-Payne>.
“What Isn’t Covered by Your Homeowners Insurance?” National Association of Insurance Commissioners. June 2007. 5 Oct. 2009 <http://www.naic.org/Releases/
2007_docs/homeowners_not_covered.htm>.
