Challenge: A client, who recently moved into the area, was concerned about spending too much for automobile insurance and thought they could eliminate coverage from our proposal. They were not entirely sold on the value of uninsured/underinsured motorist coverage. At Rosen & Company we believe that clients should not be without it. As such they secured the coverage as proposed.
A year later, a driver who had minimal Automobile Liability insurance with no Excess Liability insurance hit our client, who was a pedestrian. The injuries he sustained were severe and left him with an uncertain future.
Solution: Because Rosen & Co. had urged and successfully counseled our client to procure Uninsured/Underinsured Motorist Coverage, despite his initial reservations; his policies awarded him more than $1.5 million dollars in damages.
Conclusion: Uninsured/Underinsured Motorist Coverage is crucial.
Challenge: After completing a large renovation, a prospective client contacted us regarding homeowners insurance. When asked what prompted his inquiry he said that his current agent said $1 million was a sufficient replacement cost estimate for his home. His concern stemmed from his builders evaluation that in the event of a catastrophe the structure would cost $1.8 million to rebuild. The next week his house burned to the ground. The actual cost to rebuild was $2.2 million.
Solution: Having come to Rosen & Company just in time, we adjusted his policy limits to reflect the proper replacement value. Our new client was able to rebuild his home and did not incur a financial setback.
Conclusion: Be sure you have the proper insurance on your home
Challenge: A wealthy family maintains an extensive personal staff, including a housekeeper, driver, and children’s nanny. These employees expose the family’s personal wealth to loss. An example of this exposure is simply the staff’s daily use of their cars. If any of them was involved in a car accident, the family’s assets would have been put in jeopardy. Our client would be responsible for defending any resulting lawsuits.
Solution: Rosen & Company advised our client to create a Limited Liability Corporation (LLC) in conjunction with the establishment of a “family office.” This action allowed us to protect our client’s net worth while also creating a benefits plan for their staff. The establishment of an LLC also provides additional tax benefits to most clients.
Conclusion: Protecting significant wealth requires personalized protection
Challenge: A very wealthy (and generous) individual was referred to our office. Among his many assets was a home he purchased and insured for his son. Our client had no interest in the resale of the property or its use as an investment vehicle; it was a simple gesture of kindness to a child (who was 30 at the time). Because the son was of age, single and had an active lifestyle, we suggested that the property deed and the insurance be in the son’s name, to shield the father’s assets.
Two years later there was a party at the house; a guest fell off the balcony and was severely injured. We had structured the son’s policy with adequate liability coverage to protect his net worth and the claim was settled within the limits of the insurance policy.
Solution: Had we not made the recommendation to shield the father from the lifestyle of his son, our client (with his greater net worth) could have potentially been drawn into the lawsuit.
Conclusion: Be kind to your children, but be sure to protect yourself.
Challenge: It was too late by the time we met the client – the damage had already been done. He was driving his motorcycle, lost control and slid on a wet surface. A mother and her child were crossing the street and the child was hit by the motorcycle. Tragically, the child was killed.
A lawsuit was brought and the defendant (the motorcyclist) learned that his old agent never listed the motorcycle on his Excess Liability policy. The agent was told that the company wouldn’t add it, but never informed the client, who was left under-protected with only $100,000 of liability insurance.
Solution: We moved our new client’s insurance to a carrier that accepts motorcycles on the Excess Liability policy. Our client’s net worth is $5,000,000. His new policy fully protects his hard earned assets.
Conclusion: Motorcycles and recreational vehicles require adequate protection