Most successful people have larger portfolios with diverse and complex insurance needs. We frequently work with clients who have various, dissimilar policies – often in multiple states – collected along the way as they acquire assets. After reviewing their portfolios, we repeatedly find inadequate coverage or gaps, leaving them with serious exposure. It’s vital to holistically review the entire collection of our client’s insurance coverage to assure the policies are complementary and comprehensive, and to avoid major interruptions or shortfalls in coverage.
In this case, a client came to us with three homes, each insured with a different carrier and different insurance agency. One of the homes was out of state.
Additionally, they had multiple cars, insured with standard carriers, a $1 million umbrella policy, and two boats.
The critical piece for proper risk identification is to have a comprehensive understanding of our clients’ assets and how those assets are used to identify their liability exposures. A single knowledgeable agent – with the ability to see how all the pieces fit together – can identify gaps or missing coverage, see the target areas of personal liability and adjust as needed. For example, two of the homes were titled in trust, however the polices were not — resulting in potential exposure.
“The critical piece for proper risk identification is to have a comprehensive understanding of our clients’ assets and how those assets are used to identify their liability exposures.” – Partner, BKS Partners
We met with the client to review all their coverage and get a clear understanding of their assets and how they use those assets. We then chose to consolidate coverage with one of our high-net-worth carriers, providing many additional benefits.
After gaining an understanding about how this client lived their life with all its moving parts, we increased the umbrella policy coverage to $10 million.
A common mistake when selecting umbrella coverage is to match the net worth based on a balance sheet or simple net worth calculation. This does not take into consideration any streams of ongoing in come from current employment, future investments, partnerships, etc. – all of which are collectable.
Once we completed a holistic review of the clients’ financial situation and lifestyle, they ended up with:
This material has been prepared for informational purposes only. BRP Group, Inc. and its affiliates, do not provide tax, legal or accounting advice. Please consult with your own tax, legal or accounting professionals before engaging in any transaction.
