Are you an accidental High Net Worth individual? If so, what a delightful ‘problem’ to have, but does your home and contents insurance policy reflect you’re new circumstances?
So how does one become accidentally High Net Worth I hear you ask?!
Aside from winning the lottery, becoming a high net worth individual is usually the result of hard work, wise investments, good fortune and in some cases, a healthy family legacy. However, in the last 18 months or so, a certain pandemic has switched things up a bit. Covid has shone a light on our old lives and along with presenting many challenges, has presented some opportunity to. For example, it has demonstrated that, in many cases at least, we can work effectively from home. We’re not geographically tied to a location due to our work commitments. Fuelled by various government backed incentives to keep the property market buoyant and low mortgage interest rates, the property market has witnessed a mass migration away from urban city life to more rural, peaceful, spacious spaces. Richmond Upon Thames is trading places with Richmondshire as recently reported by the BBC.
The insurance requirements for a 5 bed, period property with gardens and outbuildings in the Cotswolds is different to that of a one bed flat in Knightsbridge. And for that reason, a standard home and contents policy may not offer the level of cover required. Welcome to the world of High Net Worth cover.
Increased Building Costs
If you have moved to a new area or perhaps a larger property, it is important to consider if your insurance provider is still able to meet your requirements. Building costs are also on the rise and therefore the rebuild value of a property could be more than you expect! It is vital that you have adequate cover to rebuild your property in full should the worst happen. Even if the worst doesn’t happen, the cost to repair a period building will be significantly higher than a regular construction located in the city. You’d also need to consider the requirement for local building materials, potentially increasing costs further.
If you have up-sized or your current insurer can no longer provide cover due to a higher sum insured, it could be time to consider if you fit the profile of a high net worth individual.
High Net Worth Insurance Policies
High net worth policies provide broader cover than that of a standard household insurer. The policies are generally warranty free and have great added benefits such as legal expenses and home emergency cover to name a few. High net worth policies are individually underwritten meaning the highest care and attention will have been applied.
As a benchmark, high net worth policies are suited towards individuals with a building sum insured of £500,000 upwards and general contents of £150,000 upwards. They can also cover those precious art and antiques and jewellery items under the same policy.