Do you own property that might be described as high net worth? To answer that question, of course, it might be helpful to know just what is meant by the term.
The answer, though, is that no strict or absolute definition exists. Those that have been suggested generally refer back to the wealth of the property owner concerned. High Net World Magazine, for example, has suggested that you need to be worth at least $1 million (in sterling, that amounts to approximately £650,000). Further definitions suggest that if your personal wealth is greater than $5 million, you might be described as being Very High Net Worth or even Ultra-High Net Worth if your wealth exceeds $50 million.
According to international property agents Knight Frank, by the end of 2016 there has been a 60% increase in the number of ultra-high net worth individuals in the past ten years – 187,000 compared to the previous 117,000.
High net worth property
One of the most common measures of the wealth of a high net worth individual is the value of the property they own – both as their main place of residence and any second homes.
These, too, are likely to represent high net worth investments in property that is exceptional in its value or rarity, architecturally significant, one of a kind or opulent – in short, they are prestige or special homes.
Specialist insurance for a special home
A general rule of insurance is that the cover provided needs to reflect the value, nature and use of the item insured. Quite simply, therefore, special homes – such as high net worth property – demand specialist insurance.
This, in turn, also means that you probably look to a specialist provider for the particular type of insurance you need.
It is a specialisation where our expertise and experience here at UKinsuranceNET is designed to identify the cover you may need for your high net worth property.
So, what is likely to make the cover provided by high net worth property insurance so different?
Loss or damage to a prestige home is invariably far more expensive to make good than a more ordinary house of standard design and normal construction.
This is especially relevant when it comes to insuring the high net worth property against potentially disastrous risks – such as fire – which might leave it totally destroyed. If the home needs to be rebuilt, the total building sum insured needs to reflect all the costs involved in that reconstruction – not just the actual building costs, but items such as site clearance and preparation, the cost of planning permission, and architects’ and other professionals’ fees. Arriving at that valuation is itself likely to require input from professional valuers.
A prestige home is typically filled with prestige contents – which might take any number of forms, including libraries of rare books, valuable collections of fine art and other items of particular value and rarity.
Once again, it becomes more important than ever that the contents of a high net worth property are valued fully and accurately – and kept up to date. As specialist insurers of just such contents, we may be able to help in pointing you in the direction of the professional valuations you are likely to need for the high value contents of your home.
Property owner’s liability
It is not only the likely envy of visitors, neighbours or members of the public with which you might have to contend, but their almost certain determination to secure maximum compensation from you as the property owner if they are injured or have their own property damaged through some connection with your home.
This arises from your duty of care as the property owner towards such individuals and even extends to those who might have entered or intruded upon your home quite illegally. If a burglar or other intruder is injured during the course of a crime, you might still be held liable for any injury he sustains as a result of a claimed negligence on your part.
High net worth property insurance is designed to provide appropriate indemnity against any claims alleging your negligence as the property owner.
Read our Complete guide to High Net Worth insurance for further information.