While today’s sedans, SUVs and light trucks are more fficient, better made and
safer than vehicles in the past, accidents
still happen. An estimated 6,734,000
Americans were involved in police-reported vehicle crashes in 2018, resulting in 36,560 fatalities and 2,710,000
injuries, according to the National
Highway Traffic Safety Administration.
Because today’s vehicles also are much
more sophisticated, the cost of repairs
can be extraordinary, as can the unintended consequences when damaged
vehicles are sold or junked. Even if your
clients have auto insurance, their safety
as well as their retirement nest eggs and
other financial assets may be at risk.
Consider the case of Andy, whose
relatively new luxury SUV was in an
accident that damaged its wheels and
one of its hinge pillars, which is a critical component to supporting a vehicle’s
structure. The insurance estimate for
repairing Andy’s leased vehicle came
in much lower than the actual cost to
restore it to its original integrity. Andy’s
situation underscores the problem of
most standard auto insurance policies
not covering the cost of replacing expensive components with parts from the
vehicle’s manufacturer or replacing the
vehicle entirely, if repairs can’t return the
car to its original structural condition.
The above example shows that not
all insurance coverage is the same; the
difference is in an insurer’s approach.
Coverage with a premier insurer would
have paid Andy’s remaining financial
obligation and saved him from driving a
potentially unsafe vehicle, or even paying
tens of thousands of dollars to his leasing
company when the lease ended. That
approach helps protect Andy and elimi-
nates the need for him to dip into his
other financial buckets that were likely
put in place to achieve longer-term goals.
Furthermore, superior coverage
involves looking for ways to do more for
the client. In Andy’s situation, a premier
insurance provider might have gone the
extra mile and looked to eliminate any
additional risks associated with the accident that are not so obvious. For example, the insurer might look to remove
personal data, which is often stored on
today’s computer-laden vehicles.
Home security information, as well as
other critical data left on a damaged vehicle’s electronics system, can result in the
loss of personal privacy and potentially
expose one’s assets and electronic identity to criminals. Toward that end, as part
of the overall process, an insurer dedicated to successful individuals should make
sure personally identifiable information
is removed from a totaled vehicle.
Given these points, many clients of
financial advisors can benefit from hav-
ing an auto insurance policy that is more
comprehensive than mass-marketed cov-
erage. And while no one expects financial
advisors to be experts in the nuances
of automobile insurance, a recent survey
conducted for Chubb found that 85%
of successful families place considerable
importance on their financial advisor act-
ing as their “financial quarterback” to help
them navigate a wide range of financially-
related matters, including insurance.
Developing a relationship with a knowl-
edgeable property and casualty insurance
agent who can provide an annual review
of clients’ coverage needs is a best-prac-
tice way of meeting and exceeding your
clients’ service expectations. Many times,
an expert review of property and casualty
coverage will reveal ways in which clients
can consolidate coverage and save money,
while improving their level of protection.
Certainly, for the personal anguish
that might come as a result of an auto
accident, financial advisors can only provide the emotional support that helps
healing. But to help insulate clients from
the financial harm than can come from
auto and other accidents, financial advisors can be an invaluable asset.
Fran O’Brien is Division President, North
America Personal Risk Services, Chubb. She
can be reached at AskFran@chubb.com.
WEALTH & RISK
By Fran O’Brien
Financial Risks Lurking in Your Clients’ Cars
Today’s vehicles may be better built, but also come with privacy risks.