How high-net-worth Canadians can protect their assets

While all Canadians face a certain amount of risk — from fire and water damage to burglary and cyberattacks — affluent Canadians are at an even higher risk. Not only do you have a substantial number of assets (such as multiple properties), but you also have unique risks, such as protecting your vintage wine collection from spoilage. That’s why your insurance needs are going to look different.

In particular, high-net-worth (HNW) individuals are concerned about the threat of catastrophic weather (such as floods and wildfire), cybersecurity, personal liability, as well as travel and personal safety, according to a survey of risk managers by the Private Risk Management Association (PRMA). However, risk managers say that 74 per cent of HNW homeowners don’t understand the importance of making sure they have adequate coverage.

If you’re a HNW individual, here are a few considerations for your insurance needs:

Specialized collections

Whether fine art, fine wine, luxury cars, antiques, or memorabilia, your collections are valuable, and they tend to increase in value over time. Some of these items might be one-of-a-kind, so they’re hard to replace or irreplaceable. While these items could be a target for theft, they could also be damaged by fire, water, or even environmental conditions such as high or low humidity and drastic changes in temperature.

For example, sunlight (and uncontrolled humidity) could damage a piece of artwork over time, or temperature fluctuations could damage a collection of rare vintages in your wine cellar. That’s why risk mitigation is key; it’s better to prevent damage in the first place rather than try to repair or replace a collectible after it has been damaged. Maybe that means using museum glass to protect fine art from UV rays. Maybe it means installing a temperature and humidity monitoring system in your wine cellar to alert you if the temperature or humidity changes, or even something as simple as installing protective window films to protect contents against heat, UV and theft.

However, if something does happen, high-value personal insurance can help cover a repair or replacement. It can also be customized to ensure your specialized collections are properly insured. You can even get itemized coverage — say, for a rare book or family heirloom.

Vehicle theft

A vehicle is stolen every five minutes in Canada, according to Équité Association. While certain makes and models are at a higher risk of theft, all high-end vehicles are targets — including SUVs, luxury cars, and pick-up trucks, regardless of manufacturer.

Car theft rings are using increasingly sophisticated methods to steal cars, such as key fob hacks. Minimizing the risk of vehicle theft involves a multi-layered approach — starting with something as simple as parking your car(s) in a locked garage, even if you live inside a gated property. As an added deterrent, install security cameras and motion detector lights where you park your car(s).

Storing your key fob in an RFID-blocking bag can help to prevent key fob hacks (by making it difficult to clone a signal). Installing physical barriers such as a steering wheel or tire lock can also serve as a visual deterrent. A ghost immobilizer on your vehicle’s main system can add another layer of defense. Also consider installing a tracking device, so if your vehicle is stolen, this could help authorities locate and retrieve your vehicle.

Personal liability

For HNW individuals, personal liability is a major concern; a guest who falls on your property could sue you for compensation. But one of the biggest personal liability concerns is one that many people are unaware of: attractive nuisances. This refers to anything on your property that could be alluring to others, such as a swimming pool or trampoline — and you could be liable even if the person using that attractive nuisance is trespassing.

For example, if a child wandering by your property decides to jump in your pool, you could be held liable if the child is injured — even if the child wasn’t invited onto your property. Ultimately, it’s the homeowner’s responsibility to control access to attractive nuisances, such as installing a pool fencing system with a self-closing gate to keep out uninvited guests. It also means supervising invited guests.

Cybersecurity

While nobody is immune from cyberattacks, HNW individuals are at higher risk — perhaps even more so than some small businesses. That’s because cyber attackers may expect a higher payout from targeting HNW estates, especially if they can hack into a ‘smart’ home where everything is connected and automated.

If your estate is the victim of a cyberattack, not only will you have to deal with the fallout (such as a ransom demand for your data), but you may also have to deal with network repair, legal claims, and even public relations services, particularly if your family’s privacy has been breached. A multi-layered defense is recommended to deter would-be cyber attackers, but cyber insurance can help you get back on your feet faster if you’re the victim of an attack or breach.

Onyx Insurance

For affluent Canadians, a standard homeowner policy typically isn’t enough. Northbridge Insurance’s Onyx is specifically designed as a high-value homeowner’s policy, moving beyond the basics with focused coverages and special limits. For example, it offers coverages such as additional living expenses to use if an event forces you away from your home.

There are also specific coverages that can be personalized to your needs, including an option for wine and spirits coverage, which covers accidental breakage and spoilage when wine is at home or in transit. There’s even Enhanced Household Protection, with support for kidnapping, child abduction, stalking, home invasion, or hijacking.