There is a salty saying by an author perhaps intentionally unknown which is, “A little risk management saves a lot of fan cleaning.” Our lives today demand that we all have varying amounts and styles of insurance. We all know we need it, we just don’t necessarily know how much or what kind. And if a catastrophe or accident occurs, the last thing we want to discover is that we are not covered as well as we thought, or worse, that we aren’t covered at all. Properly insuring yourself, your family and your personal assets from a variety of risks is a necessary consideration nowadays and it can be confusing to decipher the particulars. At DWM, we believe regularly evaluating your risk management is a fundamental element in your total financial picture. As our clients know, we include a regular review as part of our on-going total wealth management process.
It is always important to do a routine annual assessment. Certain life events may trigger a need for policy updates. My daughter recently got her driver’s license, now my third household driver under 20, so I am particularly aware of how a new driver or change of automobile status can trigger a painful review of auto insurance costs! With homeowner’s insurance, everyone understands that when you move you will need to investigate property insurance. It is also a good idea to watch for the renewal notices and review each policy before it is due to renew. It can be easy to forget about property insurance when it is buried in an escrow payment, so you can check with your mortgage lender or insurance agent to keep track of the renewal date. There are other events that should make you think about your insurance as well. Perhaps you added some significant jewelry or art that may need to be covered. Maybe you did some renovations or improvements to your home recently, like an added security feature, a new roof or upgraded windows. Other triggers might be changes in lifestyle – marriage, birth, divorce or death can all affect your insurance requirements. Even sending kids off to college or landing a new job with added responsibility can increase your need for coverage. All of these changes can impact your property and casualty insurance policies and should be evaluated by an insurance professional.
Besides changes in your lifestyle, it is worth reviewing your policy to look for coverage problems. Some coastal homeowners’ policies may have very high deductibles for wind & hail insurance. This includes hurricane damage, but also can include a thunderstorm knocking a tree onto your house. You might prefer to have a high deductible on the “named storm” coverage and keep the regular wind events covered in the lower amount of your “all other perils” deductible. Most homeowner insurance coverage uses a standard cost for satisfying replacement or repair claims. You may want to look for policies with extended replacement cost coverage for custom home features or for inflated costs of goods and services during a large impact event. Lastly, it is a good idea to be sure you aren’t over-insured.
We also think it is important to watch for changes in the marketplace and keep up with new products or services that might be available to our clients. We have recently learned more about a company called PURE (Privilege Underwriters Reciprocal Exchange), a mutual company owned by its ‘members’ or policyholders rather than public shareholders. Their niche model specializes in offering exceptional coverage and savings to “responsible” owners of the “finest built homes” and allows PURE to offer competitive rates for property & casualty insurance, often with premiums at 20% less than their competition. The idea is to provide competitive coverage to successful families who are motivated to take care of their properties and who value the premium customer service offered to the PURE members. The PURE founders came from the high net-worth programs at AIG and Chubb and have been inspired, in part, by the successful member exchange concept at USAA. PURE believes in a client-centric service model with financial transparency and customized and detailed risk management assessment. PURE writes insurance around the country for high-value properties worth $1 Million or more. We don’t endorse particular companies, but we think PURE does a good job of acting as a fiduciary for the insurance coverage of their clients. If you fit their profile, it is worth getting a quote from an agent.
Sorting through all of the coverage levels, intricate policy choices and evaluating your personal insurance requirements can be daunting and time-consuming. At DWM, we are happy to sort through the details on all of your insurance, including property & casualty, health, life, disability or long term care. We work with trusted insurance professionals to ensure you have the most appropriate coverage at the best possible price. We think it is important for all of us to work together to make sure your risk is well-managed. We hate to see our clients have any fans to clean!