Insurance - CKRe Ltd.
ARE YOU BEING
COVERED? Tom Montgomery takes a light-hearted but insightful look at insurance, the pitfalls to avoid and how a family and its family office can navigate the complexities and options they have when choosing and maintaining their insurance coverage. Now let’s be honest about this; insurance is possibly the dullest subject out there. Everyone hates paying for insurance, and insurance brokers are as popular as estate agents or the tax man! However, everyone needs insurance and everything is insurable. In the Lloyds of London market we have insured everything from Pamela Andersons’ breast implants and Jennifer Lopez’s bottom, to Elon Musk’s recent space rocket launch, to the most mundane such as warehouses in Northamptonshire and fleets of white vans.
Family Office Insurance Underinsured As a family and family office you all need to work out your risk appetite and how you’re going
“
to structure your insurance and risk management. This will save you money on your insurance premium and give you reassurance that you are covered if a disaster happens. There’s one thing that most UHNW families have in common, and that is they’re underinsured. This is increasingly true as asset values and personal liability risks increase. Industry stats in Europe estimate that seven of ten luxury homes are underinsured. Furthermore, many UHNWI don’t adjust their coverage limits in accordance with changes in the value of their assets or risks. Recently this was demonstrated by a new client who had been let down by his previous insurance company. The old insurers had not updated the
values of his classic cars for about a decade, and over the past twenty years the prices of classic cars, often seen as alternative assets now, have risen hugely. All this came to an (expensive) head when he was manoeuvring a rare Ferrari around his garage and reversed into his classic Aston Martin DB3. Altogether both cars were undervalued by almost US$700,000 which he couldn’t claim due to their true value not being stated on the policy. The global recession, which hit many wealthy insured families hard, has transformed the approach these families take to maintaining their financial security. We have found that clients have not been very satisfied (or happy) with the performance of their bond portfolios or their
© Unsplash; Shutterstock
In the Lloyds of London market we have insured everything from Pamela Anderson’s breast implants and Jennifer Lopez’s bottom, to Elon Musk’s recent space rocket launch, to the most mundane such as warehouses in Northamptonshire and fleets of white vans.
Family Office Investor
”
