In the complex world of personal risk management, families with multiple properties often face unique challenges. Recently, our team at Cottingham Butler had the opportunity to assist a family in this exact situation, dramatically improving their coverage while significantly reducing their premiums. This case study showcases how strategic adjustments can lead to superior protection at a lower cost.
The Situation
Our clients, a family owning multiple homes, came to us with a common but critical issue. Their existing personal risk management plan was inadequate, characterized by:
Low deductibles across their policies
Insufficient liability limits
Gaps in coverage for modern risks
This combination left them vulnerable to both minor claims and catastrophic events, while also paying higher premiums than necessary.
Our Approach
After a comprehensive review of the family's risk profile and existing policies, we identified several key areas for improvement:
Deductible strategy
Liability coverage
Protection against emerging risks
Overall cost efficiency
The Results
Our team implemented a multi-faceted strategy to address all aspects of the family's insurance needs:
Restructured Home and Auto Deductibles: We adjusted the deductible strategy for both home and auto insurance policies. By aligning these with the family's true risk tolerance, we created a more efficient risk transfer mechanism.
Enhanced Umbrella Policy: We significantly increased the uninsured and underinsured motorist coverage limits in their umbrella policy to $10,000,000. This substantial boost provides crucial protection against high-impact events involving uninsured or underinsured parties.
Added Personal Cyber Crime Coverage: Recognizing the growing threat of digital crimes, we incorporated personal cyber-crime coverage up to $50,000. This addition protects the family against a range of modern risks that traditional policies often overlook.
Optimized Overall Insurance Costs: By strategically increasing the family's risk assumption at lower levels (through higher deductibles), we were able to secure much higher coverage limits for catastrophic risks. This rebalancing not only improved protection but also resulted in significant cost savings.
The Outcome: Enhanced Protection at Lower Costs
The most remarkable aspect of this case is the dual benefit we achieved:
Increased Coverage: We substantially improved the family's protection, especially against high-impact events that posed the greatest financial risk.
Decreased Premiums: Despite the enhanced coverage, we managed to lower the family's overall insurance costs by an impressive 33%.
Our approach of increasing risk assumption in areas where the client can comfortably self-insure allowed us to secure much more robust coverage for truly catastrophic events. This not only provides better protection but also often results in overall premium savings.