High net worth (HNW) insurance can help you protect your assets

Insurers have a penchant for industry jargon, and they’ve coined the term “high net worth” (HNW) insurance to cater to affluent individuals seeking to safeguard their assets. HNW insurance is a bespoke and non-standard form of coverage tailored to your specific requirements. It offers more favorable terms, fewer exclusions, and often includes risk management assistance. In essence, it’s insurance that acknowledges your worth.

1. What is HNW Insurance? High net worth (HNW) insurance is the kind of coverage that many aspire to have but few can afford. Unlike standardized policies with limitations and exclusions designed solely for price competition, HNW insurance is meticulously crafted to meet your unique needs.

Moreover, it comes with an elevated level of service, including quicker and more comprehensive claims handling. Here’s an illustrative example: In April 2010, the volcanic eruptions of Eyjafjallajökull in Iceland created a hazardous ash cloud that disrupted air travel across Europe, causing widespread chaos. While most travel insurers scrutinized their policies’ fine print, finding reasons not to pay for canceled trips, HNW insurer Hiscox took a different approach. It publicly declared that, although its policy wording might have allowed it to deny these claims, its customers expected better treatment, and it would fully honor the claims. This decision set Hiscox apart. Ultimately, all other insurers were compelled by the Financial Ombudsman to settle these claims, with some even resorting to legal battles. Hiscox demonstrated a distinct attitude towards customer service. Peter Burkert, an insurance broker at Lark, remarks, “HNW insurance offers a hassle-free, less burdensome, extended coverage with the option to purchase additional products, adopting a portfolio approach.”

2. How Do I Know if I Qualify for High Net Worth Insurance? Qualification for HNW insurance is less about your wealth or the nature of your assets and more about your mindset.

Barry O’Neil, managing director of Home & Legacy, the HNW division of Allianz, explains, “There tends to be a triggering factor indicating that a standard home or auto insurance policy falls short of meeting the needs of affluent clients. This trigger could be the property’s rebuild value or size—for instance, properties valued at over £1 million or those with more than six bedrooms. It may also involve possessions exceeding £200,000 in value. Moreover, high-value items like jewelry or collections can act as triggers. For example, a £50,000 Rolex watch surpasses the coverage limits of most standard home insurance policies. Motor insurance policies may need to accommodate multiple cars and drivers, including high-value and high-performance vehicles.”

3. How Can I Purchase HNW Insurance? You won’t find HNW insurance available for purchase online, and it’s certainly not listed on price comparison websites. Instead, you need to engage with an insurance broker. You’ll meet in person, and they’ll likely visit your residence, conducting a thorough survey to ensure comprehensive and secure coverage.

Justin Gott, head of art and private client at Hiscox, emphasizes, “At the upper end of the market, there’s no one-size-fits-all insurance solution. A broker can help you secure the right level of coverage. They possess insights into specialist insurers with relevant expertise and can safeguard against common pitfalls such as underinsurance. Surprisingly, up to 55% of high-value homeowners underestimate the true value of their possessions—some by as much as 40%. This is entirely natural. In reality, we accumulate possessions as we journey through life. Items get replaced with newer models, our interests expand, we embrace new leisure activities, and perhaps our families grow or we inherit valuable heirlooms.”

4. What Can I Insure with HNW Insurance? HNW insurance allows you to protect a wide range of assets, which may include:

• Multiple residences, including properties overseas
• A fleet of vehicles, including classic collections and high-performance cars, for numerous drivers (family and staff)
• Yachts, powerboats, helicopters, or planes
• Valuable items, collections, or artwork, covering transportation, storage, and exhibition
• Jewelry, from pearls to luxury watches like Rolex
• Comprehensive travel coverage for you and your family, for both business and leisure purposes

Notably, most of your possessions can typically be covered under a single policy, offering worldwide all-risk coverage.

5. What Can’t I Insure? According to Burkert, “In terms of possessions, there is nothing you can’t insure.” Beyond personal possessions, your broker can likely find a solution for other aspects of your life. HNW individuals often have businesses and other interests, and HNW insurers can often provide encompassing coverage for non-personal risks as well.
6. What Can I Expect When Making a Claim? When making a claim under HNW insurance, you won’t be directed to a call center in a distant location. Instead, you’ll have a dedicated claims handler within your insurance broker’s team. HNW insurers typically process most claims promptly.

Since they have detailed information about your possessions and their values, there’s usually no room for disputes or delays. Additionally, you won’t be pressured to seek cheaper alternatives or purchase items from the insurer’s preferred suppliers. Instead, you’ll typically receive cash settlements, giving you the flexibility to spend as you see fit. Furthermore, if you require temporary accommodation due to a claim or need a rental vehicle, the provided accommodations and vehicles will be of a similar standard to your own home and car. Gott adds, “The true test of any insurance policy lies in the event of a claim. Many standard policies come with restrictive terms like replacement cost only (instead of new-for-old on contents), average clauses (reducing the claim if underinsurance is present), and limitations. Conversely, HNW policies typically offer broader coverage from the outset and impose fewer exclusions. We strive to make it as straightforward as possible for our clients, with policy documents free of jargon and an expert claims team proficient in handling substantial and intricate claims.”

7. What Is the Cost of HNW Insurance? You might assume that if you need to inquire about the price, HNW insurance is beyond your means. However, insurers point out that most HNW customers are astute consumers who pay attention to prices. They assert that the cost of HNW insurance is not substantially higher than buying separate standard policies with similar sums insured.

The key distinction lies in the comprehensiveness of coverage and the quality of service—attributes that often justify a modest additional expense.

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