Why Affluent Customers Need Independent Agents

August 19, 2021

Safeco Insurance

Wedged between high-net-worth and mass-market, affluent customers need high limits of liability to protect their assets, but may not want to pay for white-glove service. Here are 5 coverages to offer them.

Firmly wedged between high-net-worth- and mass-market lies the affluent market.

While many imagine “affluent” means a multi-million net worth and a palatial mansion, it’s a broad spectrum of consumer. Think more the upper end of middle-class and less “Downton Abbey.” They are your community’s established professionals and business owners. They often drive luxury autos and they likely own specialty vehicles, like a boat or a motorhome. Because of their assets and income, they need high limits of liability and an umbrella policy.

With home values starting around $500,000, these customers may qualify for private client coverage but they’re not all willing to pay the price for white-glove service and have little need for a bottle-by-bottle wine schedule.

What affluent customers do need is a risk advisor, an independent agent who understands how to ensure they are protected using the IA-superpowers of ease, choice and advice. They also need an insurance carrier that has both the breadth of products and the depth of coverage to give them peace of mind. Many affluent customers are insured by captive carriers, not realizing that the lower internal limits of their current policies leave them inadequately protected. This is a rich (pun intended) opportunity for you to prospect and educate.

When quoting affluent customers, there are a few key coverages to offer.

1. Extended dwelling coverage

Extended dwelling coverage is a must and ideally at least 100% of the coverage A amount. As the pandemic showed, the cost to rebuild a home can vary wildly and without warning. Shortages of materials, labor and more can mean that 25 or even 50% may not be enough coverage to rebuild a home, especially when you consider luxury finishes, like granite and solid wood doors.

2. Replacement cost coverage

Replacement cost coverage on everything possible, from their personal property to their autos, boats and RVs. The affluent consumer is interested in protecting the things for which they’ve worked so hard, and offering policies with replacement cost shows that you recognize the importance, too.

3. OEM parts with OEM glass

This is another key coverage to offer. People who drive Porsches, Land Rovers and similar luxury vehicles generally want repairs to include genuine OEM parts, and that includes an OEM windshield. However, few carriers outside the private client market offer OEM glass coverage.

4. Worldwide protection

Worldwide protection is also important. Many affluent consumers travel extensively. Ensuring they have protection, no matter where they wander, will offer valuable peace of mind, including everything from worldwide vehicle rental coverage to the worldwide liability protection of an umbrella policy.

5. Umbrella policy

A true umbrella policy is a must. The assets and income of the affluent make them targets for lawsuits plus their future income needs protection as well. Offer an umbrella that covers things like electronic libel, D&O activities, rented watercraft and the cost of legal defense outside the limit of liability.

While some carriers have fled this market, Safeco Insurance is bullish on the affluent market. Safeco offers a suite of products designed for affluent customers: Premier™ Home and Auto, a true umbrella, landlord protection and specialty vehicles policies for everything from ATVs to $1 million class-A motorhomes.

Cover of 2021 Issue 4 of Smart Choice Magazine, titled "The Marketing Issue: Weathering Any Storm"2021 Marketing Issue: Weather Any Storm

In this issue of Smart Choice Magazine, we’re providing advice from agency owners, Smart Choice State Directors, Content Marketing Experts, and more, to help you put together effective strategies to finish out 2021 strong. See why now is a great time to be an independent agent in this market and economy in the 2021 Issue 4 of Smart Choice Magazine.

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