February 16, 2016

Auto Insurance for the Affluent

Why should a Wealthy Client consider Affluent Auto Insurance?

What are some of the differences?

How do you decide if you are wealthy enough to consider Affluent Auto Insurance?

Affluent Auto Insurance:

Saving money on insurance is one of my main responsibilities for my clients.  However, at a certain point, it may make sense for individuals to move to a more affluent insurance carrier if they have amassed enough wealth.  How and when to ask them to spend more for automobile insurance is a tricky dance.   In general you will spend more money with one of these so called affluent insurance carriers than your typical Preferred or Standard Insurance carrier, however, the coverages that you receive will be almost always better.   According to an article from Fox Business (Insuring the Rich and Famous), “but mass-market policies are designed for Main Street, not the Manhattan elite.”    One thing to consider is that as you gain more financial wealth your need to cover individual property items should become less, while at the same time your need to protect your wealth from a liability claim will should become more.

First off, here is a quick run down of some of the differences in coverages:

1. Increased Options for Bodily Injury limits.  Limits beyond the typical $500K/$500K.
2. Increased Options for Property Damage limits.  Limits beyond the typical standard max of $100K, enough to pay for a wrecked Tesla and 911.
3. Increased Options for Uninsured Motorist, also called Under insured Motorist.   The value of this option can not be oversold.  By rule your uninsured motorist coverage can not be more than your general bodily injury limits, therefore to increase this, you must increase that.
4. Increased Options for rental car reimbursements from the somewhat standard max of $30 per day and a $900 total max to something that might pay for a sports car rental.
5. Increased Options for Medical Coverage.
6. Increased lowest options for comprehensive and collision deductibles.  You will not find the $100 and $250 option available and perhaps not even $500.
7. Some coverage outside of the United States and Canada, possibly even worldwide.   Claims of worldwide coverage should be reviewed in the policy jacket for exclusions if you are serious traveler.  The absence of a functioning government or a legal means of driving should cause you to question driving insurance options.
8. Tighter integration with the same affluent home insurance company.   Since the items left in your vehicle may be covered by your home insurance, in the event of a theft, this integration can become important.
9. The Option for a Stated Value coverage.   The stated value option can make auto insurance much more clear.
10. General Breadth of liability coverage.
11. Credit Rating.  There are many highly rated auto insurers out there, however, there are many poorly rated carriers as well.  Check your own Auto Insurers Credit rating at AM Best.  However, with one notable exception, as a general rule of thumb all of the Affluent Carriers are rated A+ or better.  How important is your auto insurer’s credit rating?  Well its important especially if a case is likely to drag out for a long period of time, carry a large payout, or both.

the credit rating becomes more and more important the larger the liability they are offering

These are some of the differences, but certainly not all.  Each and every situation is somewhat different.  Many of these differences concern options for you to choose and thus if you are not likely to choose that option than some of the value may not be realized.  Professionally the number one reason that I believe is option for increased uninsured motorist coverage, especially for wealthier and larger families.  A small subset of the population is driving around with NO Auto Insurance.  Another sizable grouping carriers only the bare state minimums, which is unlikely to even pay for a moderately long ambulance ride.   Secondly the International option is also one that I find can frequently be of value to wealthier clients.

So how do you know when to begin looking at an Affluent Insurance Carrier for Auto Insurance?

In general once your umbrella policy needs to start numbering in the multi-million dollar amounts, it is likely time to begin evaluating affluent insurance carriers.    It may come time to consider an affluent carriers if you buy that third home.  Or, you it may makes sense when you begin traveling abroad more.  You may decide that the increased coverages are not worth it, however, you may take a look at them and decide that your assets may need a bit more security.   The “Ah Ha” moment may be when you really feel like managing your own insurance is getting too complicated to do it yourself.   An affluent carrier, in general, will have a broader spectrum of liability coverage and have less liability holes to fall through.

Contact Us for an Affluent Auto Insurance Quote Today

Reading about insurance is not a suitable replacement for speaking with a licensed agent (or broker) in your region or state.  Seek counsel from licensed individuals only.  Read all policy statements, applications, and such.   Marindependent Insurance Services LLC is regulated by the Department of Insurance in the great state of California, License Number 0K10734.

Marindependent Insurance Services LLC    415-294-5454