The wealth that high-net-worth (HNW) individuals accumulate allows them to indulge in interests that most people can only dream about. The high-profile purchases, highlighted in celebrity interviews, of pieces of art, car collections grand homes and private aircraft are just a few of the indulgences the public gets a glimpse of in magazines or on television.
Yet there are some indulgences for which even the wildest imagination of the average person might not consider a need for insurance.
Among some of the less run-of-the-mill types of coverage HNW clients may ask for is mortality coverage for exotic animals in a private zoo, says Ray Condon, president of Aon Risk Solution's private risk-management practice.
One uninsurable request: Protection of a view from a high-rise co-op apartment that might be obscured by another building built years after the client has moved into the home. A carrier won't provide coverage for something that has no measurable value and is difficult to quantify as a risk, Condon explains.
PURE Insurance President/CEO Ross Buchmueller says one of the biggest gaps in homeowner's insurance for HNW individuals is the allowance for jewelry coverage. Typically, jewelry coverage is capped at $5,000 and insureds would have to purchase additional coverage for expensive pieces for sometimes hundreds or even thousands of dollars in premium. He says PURE in 2010 increased jewelry coverage in its homeowner's policy to $50,000, which he says likely exceeds "payments for virtually all of the exotic policies that might sound sexy but do very little to reduce the cost of risk for a policyholder."
Chartis and Chubb offer programs aimed at reducing risks for HNW clients. For example, both offer wildfire-defense services aimed at taking initiatives to protect a home; these include risk mitigation to reduce the chance of a wildfire burning down a house and the dispatch of privately contracted mobile fire-suppression units.
One insurance product that is growing in demand, says Condon, is Kidnap & Ransom and Extortion coverage.
"The wealthy feel targeted and vulnerable," he says, noting that this coverage is especially popular with Latin American clients with assets and homes in the United States.
There is also a growing demand for High Limit Disability coverage for those in the entertainment and professional fields, says Condon, adding that business managers often demand it. He says professionals such as a high-profile surgeon want the coverage in case something were to happen to, say, a hand, and they can't perform surgery. Coverage depends on how challenging the profession is and the individual's income level, he adds.
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