Dealing with insurance claims for high net worth (HNW) customers comes with its own set of challenges for insurers and adjusters alike. Specialist knowledge is a prerequisite for adjusters when losses can include high-value jewellery, art, vintage cars, antiques, rare heritage pieces or horses.
Neil Middleton, a senior loss adjuster with the Major & Complex Loss team, oversees management of HNW claims in his capacity as head of private clients. He can call upon a team of highly trained and qualified HNW adjusters and expert partners, backed by a unique fine art and antiques validation service delivered in partnership with a leading auction house.
Insurers define HNW customers according to each carrier’s set of metrics, typically linked to property or portfolio values. Neil adds: “However the insurers define HNW, it’s Crawford’s job to respond appropriately, professionally and with empathy once we’re instructed.
“Our team comprises dedicated, high-performing and eminently knowledgeable adjusters who can call on cutting-edge technology to assist in their investigations as well as to speed the assessment process.
“They each take full ownership of their claims from start to finish, providing a bespoke premium service to our clients and delivering fast, insightful management information as the claim progresses.”
Underinsurance is the most common challenge in dealing with HNW claims, Neil says, usually as a result of inadvertent omission. He gave a few examples of how this can happen:
Overconfidence
Wealth itself naturally boosts confidence about financial resilience, but this can create potential for overlooking the finer details of necessary insurance. When most of the wealth is tied up in property and possessions, the client is asset-rich and, without adequate insurance coverage, vulnerable to becoming cash-poor in the event of a major loss such as a devastating house fire.
Art fashion
A painting or sculpture acquired a decade ago for £40,000 from an artist that’s since achieved world fame could now be worth £2 million – but has the policy kept track of the value?
Hyper-inflation
Prices can rocket, changing the value of possessions from property to precious metals to family heirlooms. If insurance coverage is not appropriately adjusted to keep track of inflation, claims paid out after an event will not reflect the true financial loss. In the case of significant fire or flood damage, this could also impact the allowance for alternative accommodation.
Listed buildings
Many of our claimants live in buildings with “listed” status. This can create interesting challenges. In the event of a significant fire loss, for example, it might be that the requirement to retain elements of the existing structure comes at a much higher cost than replacement of the structure as a whole. Additionally, VAT is charged on repairs, whereas a complete rebuild would be exempt. It’s therefore essential that compliance with both building and VAT regulations are incorporated into sums insured to provide optimum cover.
Complex property portfolio
When customers own properties in several countries, coverage will need to be reviewed against local legal and regulatory requirements in each country. Coverage of local perils, such as subsidence and natural disasters, may be excluded in some locations.
The overriding rule to ensure HNW clients have the insurance they need is that details matter. Putting the correct cover in place may require a bespoke policy and a thorough broker will work to create one, if necessary.
The challenge for brokers is to get complete, relevant and up-to-date details from the outset and make the case for the client to pay the necessary premium for the desired coverage and to avoid the potentially costly consequences of underinsurance.
Neil sums up:
“No two HNW claims are ever the same. But whatever the peril, circumstance of loss, or extent of cover, I know beyond a doubt that our hugely professional team will always respond with the utmost promptness, empathy, discretion and integrity.”
