If you’re an international high net worth (HNW) property investor, it’s likely you have high-value assets across a range of locations. And not only will you need to arrange cover in multiple locations, you’ll most likely also need the help of a specialist broker and insurer to guarantee your needs are met. This can cause a headache when it comes to arranging adequate insurance, which is a vital but often forgotten consideration.
We sat down with Brian Verney, Nicola Amis and Thomas Mangnall from the HNW appraisal team at Chubb, one of the world’s largest insurers, to find out more about how international investors can protect their worldwide assets. From homes in Jersey to villas in Cannes, the Chubb team has appraised HNW property in locations across the world, and are experts in their fields.
One of the unique and beneficial features of a HNW policy from Chubb is that the appraisal team carry out home visits to properties, to ensure that adequate buildings and contents insurance is provided. Can international investors benefit from this process?
Thomas: Yes, we can provide this service across a range of locations. For example, I have appraised heavily throughout Europe, but find myself mainly in France, and am usually out in France at least once a month.
Brian: I’ve worked across the Channel Islands, Holland, Belgium, Spain and Portugal. I’ve just come back from a week in Jersey and Guernsey, primarily working with clients who live on the island full time and have properties with an average rebuild value of £4-5million.
Is the appraisal process different across these locations?
Thomas: It’s more or less the same; when you’re dealing with HNW clients, there’s a commonality across the board. HNWIs have the highest levels of fixtures, fittings and possessions, and many have similar ‘passion collection’ assets, such as art, wine and antiques. So the appraisal process is similar—where we see the variance is in the locations.
What location specific concerns are there?
Brian: If you own a luxurious new-build villa in Portugal and Spain, these properties are typically quite easy to insure because the client can provide us with the exact spec in the form of brochures. This makes it very easy to calculate a rebuild cost.
Thomas: Older, historic properties are much difficult, and these occur more frequently in areas like France. For example, clients who own large Vineyards or historic Chateaux face different concerns. Amazing wine cellars are a very common feature in areas like Cap Ferrat, and these can hold immense value. These might be covered under a ‘valuable articles’ cover, which gives more extensive cover. For collections over a certain level, we’d require up-to-date valuations or purchase receipts.
One of the things I constantly find in France is a real blank spot when it comes to fire protection. In London, clients typically have monitored fire alarms. But France simply doesn’t have the same culture. It’s only recently that building regulations stipulated that you have to have a battery-operated smoke detector. If you have a €20million art collection, it’s essential to have the right fire protection in place.
Nicola: As we mentioned in a previous article, HNWIs often have ski chalets in the Alps which raise certain concerns. Alpine chalets often have features like underground garages, hydraulic lifts, and heated driveways. These high-tech features can present fire risks. And, of course, the risk of earthquakes and avalanches is a concern.
Weather seems like it could be a concern in certain areas—is this factored in?
Thomas: Weather can of course be an issue. I’ve seen lightning damage in the south of France knock out all of the electrics, causing immense damage to the ‘smart systems’ on which many ultra-luxury homes are run. It can run into the hundreds of thousands to adequately replace. Especially in the South of France where lightning storms are much more common, it is vital that homes have lightning conductors and suppressions to prevent the electrics being blown out. And, as mentioned, avalanches and earthquakes are a concern for areas like the Alps.
For clients who own properties around the world, what other concerns are there?
Thomas: For many international HNWIs, a big insurance concern arises from the fact that many properties may not be lived in all of the time. Escape of water is a big concern for a property which isn’t constantly lived in; if a pipe bursts and isn’t found promptly, this could rot and collapse the floors, causing a phenomenal amount of damage. It’s therefore important to have water leak detectors, which will shut down water leaks if anything abnormal is going on.
Brian: Theft is another aspect, but this can be mitigated by having live-in staff, or at the very least, somebody checking in on the house regularly. Local key holders are important to consider. Ultimately, the important thing for international property investors is to have the teams in place—from insurance providers to live-in staff. Nothing can protect you entirely, but taking these steps will minimise your risk as much as possible, leaving you free to enjoy your assets.