Florida is home to 427,824 millionaire households; only California, Texas and New York boast higher numbers of millionaires. Approximately one in 20 households in Florida is worth $1 million or more, according to Kiplinger, a Washington, D.C.-based business forecaster and financial advisor. No doubt its popularity as a retirement destination, lack of state income tax and low cost of living all contribute to the concentration of affluent households in the Sunshine State.
For sure, the affluent have unique needs. They travel the world and own yachts, planes, multiple properties, household help, collections of art, rare and valuable cars and expensive jewelry. Protecting their valuable assets may require additions to insurance policies called endorsements. Endorsements can cover specific items, like jewelry or wine, or specific events, like floods and earthquakes.
Here are 5 specialized insurance coverages for affluent Floridians.
Most homeowners’ policies offer little coverage for personal property, such as collections of jewelry, fine art, wine or cars. If they do, the limits are low, which is why many affluent households purchase endorsements. There are two types of endorsements – a blanket endorsement that would cover a loss up to a certain dollar amount – and a schedule that lists your most expensive items individually. It is essential that the items listed be periodically reappraised. The value will appreciate or depreciate depending on market forces and demand for that object.
Standard homeowners’ policies tend to have numerous exclusions, exceptions and complications. Many high-net-worth individuals expect a higher standard of service than a standard policy. Specialty coverage plans are becoming popular with the wealthy. Examples include:
There are differences in auto insurance too. When it comes to insuring $400,000 Bentleys or $10 million Duesenbergs – and car collections – clients expect a white-glove approach. For example, insurers have begun offering attractive discounts if their customer bundles an auto insurance policy with homeowners and liability. Additionally, because high-net-worth individuals can generally absorb smaller losses, the can choose higher deductibles, which reduces their premiums.
Affluent individuals are more inclined to pay for a higher and exceptional standard of health care. The term for this is concierge health care. Examples of concierge health care include:
For most American families, life insurance covers funeral expenses and some of the household’s ongoing expenses. For the wealthy, life insurance is used to pay taxes, endow a charity or to transfer money to the younger generation. Oftentime, the affluent don’t even have to pay out of pocket for their premiums. Wealthy individuals can secure a $1 million-plus policy without tying up their personal assets. The cost of their premiums are secured by a loan arranged by their financial institution. The policyholder makes regular load payments, but the insurance premium is paid by the financial institution, keeping it in force during that time.
Specialized insurance for high-net-worth individuals is becoming more popular. Whatever endorsements people purchase, it’s good that they at least know what they are and what they cover (and don’t cover). Sometimes people tend to think more is protected under their policies than actually is covered.
High-net-worth individuals lead uniquely complex lives, making them a more attractive target for theft and other risks. To learn more about how Lanier Upshaw, Inc. can help you manage your risk, please contact us here.