People like to have nice things. With the global economy picking up, and a rise in living standards and disposable income, we’re consuming more luxury goods and services. As we splash out a bit more on the finer things in life, we also want to protect them. And while our exclusive goods and experiences are a luxury, insurance isn’t.
High value items
‘High value items’ can be individual items such as TVs, computers, phones and other smart technologies, or valuables like jewellery, watches and art.
There’s also a growing number of ‘high net worth’ clients with multiple homes and overseas properties, a fleet of cars, art collections, expensive jewellery and luxury travel.
People often think that home, car, travel and even wedding insurance will cover them in case of disaster. But there are pitfalls that you need to make your customers aware of:
- home insurance policies often have ‘single item limits’
- valuables like jewellery and art can increase in value year on year
- some policies ask for higher excess, which can cut premiums
- some insurers set the value of a product and don’t take into the account the value of the brand and experience
A good broker can advise their clients of the most cost-efficient way to achieve the valuable-items coverage. There are specific times you’ll need to advise your clients about insuring their high-value items and experience:
- when renewing an insurance policy, for example, it’s important to get them not to underestimate the value of new contents when renewing home insurance
- when buying a new insurance policy for your home, car or pet
- if planning an experience that’s costly, like a wedding or luxury trip with high-value jewellery or sports equipment – you need to advise them to check the travel policy as some only cover limited amounts, and extend it if necessary
- when gifted any expensive items, for example, coming into an inheritance.
What this means for insurers
As more people have a ‘high net worth’, it’s important to be clear with your clients (underinsurance is a problem in the home insurance market) and provide adaptable solutions to meet their needs for their growing assets and lifestyles.
- Be clear and qualify what you mean by luxury or ‘high-value items’ and the limits you’ll pay out.
- Make sure they keep up-to-date with changing valuations for their belongings and keep an accurate inventory, including pictures, of all their assets.
- Consider offering unique insurance for mid and emerging high-net worth customers.