New York High Value Home Insurance


Top 10 ways affluent customers are under insured and still over pay

In today’s economy, you – along with the rest of the affluent community—are probably looking to cut costs and save money. For a wise money-handler, this includes taking a close look at your insurance coverage. Whether it has been a few months or many years since you last analyzed your protection, you are right to wonder: Am I paying too much? Am I protected as I should be? Where can I save money without risking my most valuable assets?

Here are the top 10 issues that you should review as an affluent consumer to make sure you are not overpaying, and are still protecting yourself and your family.

1. Deductible too Low:

In a home insured for over $1,000,000 the deductible is often way too low. I like to see a deductible of $2,500 to $5,000. You may be saying to yourself that “its way too high!” The truth is the average homeowner puts in a claim about once every 6 years. You can save over $1,000 per year by simply increasing your deductible.

Here’s the best part about increasing your deductibles. Not only do you save money, but many of our insurance companies that specialize in affluent homes have something called a Vanishing Deductible. What that means is that for every year you don’t have a claim, your deductible is reduced by 10%. For example if you choose a $5,000 deductible and you are claim free for 4 years, your new deductible is now $3,000!  You are still getting the discount for a $5,000 deductible but are enjoying a lower actual deductible.

2. Home Under Insured:

You bought your house in 1997 when construction costs on Long Island were about $150 per square foot. Did you know that on some homes we insure in Nassau County, the cost per square foot has risen to over $425! Most new customers who come to us are grossly underinsured. The problem of undervaluation becomes clear when a house is completely destroyed. Suddenly, the homeowner discovers that it cost far more to rebuild the home than the coverage limit in the policy.

While mass marketing policies provide a small buffer of 20-25% above the coverage limit, it is often not enough. The problem can be solved by insuring with one of our carriers that promises to rebuild the home regardless of coverage limits. That means if your house is devastated by a loss and is insured for $2,000,000 but will cost $3,000,000 to replace it, you will be paid the $3,000,000. This is the kind of protection that gives an affluent consumer like you the peace of mind you deserve.

3. Valuable Items:

Valuable items such as jewelry, watches, fine arts, furs and other collectibles are either overlooked or perhaps you did it years ago when you first purchased your insurance policy and haven’t updated it recently. Over the years you might have added many items to your collection and are severely lacking the adequate protection.

Also, over the past few years, the price of gold has skyrocketed. Your jewelry can be worth much more today than when you originally bought it. So, when it comes to jewelry coverage, it’s important to ask yourself: does your policy provide you with the right coverage? Insurance companies that specialize in insuring the affluent often will pay up to 50% more than the standard mass marketing company.

4. Package Discounts:

With all the promises of savings being delivered by some of the larger insurance companies via mass-market advertising these days, it’s no wonder that many people – including the affluent – have put their auto insurance with one carrier and homeowner with another. Beware; the so called savings can be a myth. Spreading policies over different carriers not only increases the potential for gaps in coverage, but it also negates any package discounts achieved when multiple policies are placed with one carrier. The discounts we can get you may even be as high as 10 to 15%.

Affluent customers can maximize the benefits of a package discount by choosing a carrier that can handle a wide range of their needs so the discount applies across all their policies.  By having all your policies with the same carrier, you get the best of both worlds; you maximize your protection and enjoy substantial discounts. At Brooks-Waterburn, we specialize in getting you the best of these multi-policy discounts.

5. Loss Prevention Discounts:

Did you know you can get credit for installing alarm systems and taking other loss prevention measures to protect your home and cars? Many affluent customers fail to get these credits for any number of reasons. But the fact is that these credits can deliver you a significant savings, often exceeding 30% of your premium!

For your home, you can get credits for Burglar Alarms, Fire alarms and Sprinkler Systems, Electrical Back Up and Lighting protection, Temputure Monitoring, Water leak detection with automatic shut-off and even Gas leak detection.

For your cars, you can get credits for features like alarm systems, fuel cut off switches, hood locks, steering locks, transmission locks, and location transponders. Don’t go any longer without getting every discount you deserve.

6. Preventing Catastrophic Loss-Liability Limits too Low:

In my many years in the insurance industry, I have seen many types of claims; from fires, to theft, to floods. While those losses were often devastating, the worst types of loss are liability claims against you. They often drag on for years and if not properly protected you could lose everything…including your home! Imagine this: you or your teenage child are driving at night and are involved in an auto accident. You think the damage to the other car is minor, but a few months later you are served with a law suit looking for millions in damages. Apparently the other driver was a surgeon and the accident caused shoulder pain which has prevented him from working. Now he’s looking to recoup millions of dollars in lost wages!

Umbrella Liability coverage protects the affluent customer’s net worth and lifestyle in case of a financially ruinous law suit of this nature. Limits can be purchased starting at $1,000,000 all the way up to $100,000,000. Surprisingly, the cost of this protection is quite low. It amounts to only a few hundred dollars per $1,000,000

7. Preventing Catastrophic Loss Part 2-Gaps in Coverage:

Here are a few examples of why it pays to have all your insurance in one place.

Let’s say you have an Umbrella policy protecting you for $5,000,000. You’re fully protected, right? Well maybe. Picture this scenario; you have your home and Umbrella protection with one insurance company and your autos are insured with a company that lets you “Name your own Price!”. Here are some potential problems: A gap exists between the point when the auto or homeowner coverage stops and the Umbrella begins. For instance, if the liability limit in the auto policy stops when the loss exceeds $100,000 but the Umbrella coverage doesn’t start until the loss exceeds $300,000, you have a $200,000 gap in coverage. All companies are different when it comes to the point at which umbrella coverage starts. Some are as low as $250,000 while others are as high as $500,000. If these numbers are not coordinated, you could be at serious risk.

Here’s another example of a gap in coverage that I often come across: Company cars that are driven by family members. You may think you are covered by the Company auto policy. But does it cover catastrophic losses if driven by a family member? Many don’t. In these cases, you could be personally sued, but not have the right protection.

8. Miscellaneous Auto Protection:

As you can imagine in my profession I look at hundreds of my competitors’ policies every year. It astounds me that so many auto policies are written incorrectly. Believe it or not, auto insurance is a complicated contract. It is written by lawyers whose main job it is to protect the insurance company, not you! Do you trust your coverage to some stranger in a cubicle over 1,000 miles away with 1 week experience in the industry? Here are 2 of the most common deficiencies I see in a typical auto policy:

Uninsured/Underinsured Motorist Coverage: A recent estimate states that 1 in 6 drivers may not have any auto insurance. Amazingly, most policies I see are written with only the state required minimum limits. If you are involved in an auto accident that is not your fault, you have a 1 in 6 chance of not collecting what you are entitled to because these limits were too low.

No Fault Insurance: What does a so called insurance professional from Omaha (Geico’s home office) know about NYS No Fault laws? Do they even know your coverage options or that you could obtain separate coverage for at home care?

As you can see, when you’re looking for auto insurance, it is very important to stick with a true insurance professional who will take the time to understand your options and needs.

9. Not-for-Profit Directors & Officers Liability:

You’ve done well over the years and you want to give back. Great idea. It feels good to help other but while doing these noble deeds, don’t put you or your family at risk. If you serve on the Board of Directors for a local charity, or maybe your kid’s soccer team, it is very important that they have a Not-for-Profit Directors & Officers liability policy. This will cover you for any lawsuits that the board of directors is involved in. And make sure that the policy covers “wrongful termination” of employees. Often these are the most common law suits a director is faced with.

10. The Importance of a Risk Review:

When was the last time you had a risk review? If the answer is 2 years or more, it is very likely that you have some deficiencies in your coverage and perhaps are overpaying in some areas. At Brooks-Waterburn, we work hard to understand your exposures at hand, gauge your risk tolerance, design a protection program together with you and most importantly, monitor it for you over time.

Some of the items we handle for you in a risk review are:

  • Your Home: Is it properly insured? What valuation is being used? Are your collectibles insured?
  • Your Autos: What types of vehicles do you have? Do you have an old collectible car? This should be insured far differently that a standard automobile. Are the limits and deductibles correct?
  • Umbrella: Do you have an adequate Umbrella limit? What is your net worth? How much do we need to protect?
  • Discounts: As I previously mentioned, you could be entitled to some significant discounts. Are you getting all that you are entitled to?
  • Risk Tolerance: Some people can’t sleep at night if they have a $25,000 deductible on their home. For others, they would rather have more savings and take that risk. The point is that everybody’s risk tolerance is different. That’s why we will custom-tailor a special protection program to match your own unique risk tolerance.

Brooks-Waterburn Corp: Your Solution

At Brooks-Waterburn, we understand the concerns and needs of an affluent consumer like you. When you talk to our Brooks-Waterburn experts about your special protection needs, you can rest easy knowing that you will get the best, most complete and most appropriate protection for the best price possible. Don’t spend another day worrying about your potential coverage gaps and lack of savings. We’re here to protect everything that matters the most to you! Contact us now and let’s make sure you’re taken care of.