For affluent individuals and families, insurance is more than just a safeguard – it’s a strategic tool for wealth preservation, legacy planning and risk mitigation. However, securing and maintaining optimal coverage isn’t as simple as purchasing a policy and forgetting about it. Your insurability – meaning your eligibility for the broadest, most comprehensive coverage at the best possible rates – depends on careful management of claims, periodic market evaluations and understanding when to stay the course.
Here is what you should know to optimize your long-term insurability and maximize the value of your insurance portfolio as a high-net-worth individual.
High-net-worth individuals should be strategic about claims
While insurance is there to protect you, filing too many claims – particularly for minor losses – can negatively impact your risk profile. Insurance carriers assess your claims history when underwriting policies, and excessive claims can lead to higher premiums, policy restrictions and even non-renewals.
When should you be filing a claim?
- Significant losses: If a claimable loss is substantial and exceeds your deductible by a meaningful amount, filing a claim makes sense.
- Liability exposure: If an incident involves potential legal liability, such as injuries sustained by visitors on your property, it is critical to immediately notify your insurer.
- Third-party damages: If damages involve another party (e.g., a car accident or damage to a neighbour’s property), prompt reporting helps protect your financial interests.
When should you pay out of pocket?
- Minor losses: If the repair or replacement cost is close to or slightly above your deductible, consider paying out of pocket to keep your record clean.
- Preventable damages: Frequent claims for avoidable issues (such as plumbing leaks or roof damage) may signal poor risk management to insurers. It is highly recommended to invest in preventive maintenance to minimize claims.
When high-net-worth individuals should change insurance companies
The insurance market is constantly evolving, with carriers adjusting rates, coverage terms and underwriting standards. While loyalty to an insurer can have benefits, such as long-term discounts or relationship-based underwriting, there are times when exploring new markets is the best course of action.
Signs it’s time to shop around
- Significant rate increases: If your premiums spike above the regional average, without a corresponding increase in coverage or risk, it may be time to seek alternatives from competitors.
- Coverage gaps: If your insurer is reducing coverage limits or adding exclusions that no longer meet your needs, switching carriers could provide better protection.
- Carrier stability concerns: Red flags for an insurer include financial instability, regulatory challenges and poor claims handling. If these issues arise with your current insurer, consider switching to a more reputable provider.
How to smoothly change insurers
- Engage a specialist broker: Your advisors at Signature by Acera Insurance have access to exclusive markets and can negotiate solutions specifically designed for your requirements and concerns.
- Bundle policies strategically: Combining home, auto, umbrella, and specialty policies (e.g., art, yachts, aircraft) with a single carrier can provide leverage for better terms.
- Time your transition: Ensure there is no lapse in coverage by securing a new policy before canceling the existing one.
When to stay with your insurance company as a high-net-worth individual
Despite market shifts, there are instances where maintaining your existing relationship with an insurer is the best decision.
Reasons to keep your current insurer
- Exceptional claims experience: If your insurer has consistently handled claims efficiently and fairly, that reliability is extremely valuable.
- Loyalty benefits: Some insurers offer long-term policyholders preferential pricing, risk management services, or access to higher coverage limits.
- Comprehensive customization: If your current carrier has been providing solutions tailored precisely to your needs – especially for complex risks such as multiple homes, valuable collections, or business interests – switching may introduce unnecessary complexity.
Ensure long-term insurability and financial security
Wealthy individuals have unique insurance requirements which call for a proactive approach to claims, market evaluation and policy management. By being judicious with claims, strategically assessing market options, and maintaining strong insurer relationships, you can ensure long-term insurability and financial security.
Your insurance portfolio should evolve as your wealth grows and risks change. It’s important to work closely with your trusted advisor at Signature by Acera Insurance to regularly review and refine your coverage. It takes much more than just having insurance to be effectively protected – you need insurance that is personalized to you.
Leanne Lawson is a Client Executive with Signature by Acera Insurance. With more than 15 years of insurance experience, Leanne brings specialized expertise in providing high-net-worth individuals and their families with customized solutions to protect their valuable assets.
Connect with Leanne at leanne.lawson@acera.ca or 403.520.7252.