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Expecting the Unexpected: Disaster Planning Best Practices for High Net Worth Individuals

Natural and criminal disasters - from extreme weather to kidnapping - are an inescapable part of life and are both frequent and severe. For the high net worth (HNW) individual, whose portfolio includes coastal estates and condos, valuable collections and more, securing your personal assets has never been more critical.

In the first half of 2014 alone, the US Department of Homeland Security's Federal Emergency Management Agency declared 73 natural disasters, including wildfires in Washington State and California, the North American cold wave and severe storms, flooding and tornados across the central US. The North American cold wave, between December 2013 and April 2014, killed 21 and caused as much as $5 billion in damages alone, while worldwide natural disasters during the first half of 2014 claimed more than 2,700 lives and cost $42 billion in damage, according to Munich RE, one of the world's leading reinsurance companies.

But, non-weather related disasters, like extortion, burglary and robbery of HNW individuals and their families are also cause for concern as they have increased in recent years. Although disasters can't be avoided, their impact can be mitigated by understanding your risk and planning accordingly.

Three-Phase Disaster Preparedness 

Thoughtful preparation and planning pre-disaster can make all the difference between landing on your feet and suffering potentially catastrophic consequences. In fact, studies show that every $1 spent on disaster mitigation saves $4 in community disaster recovery expenses.

Adhering to the following three-phase Disaster Preparedness Plan can help any HNW individual or family face a potential disaster head on. Thorough pre-disaster planning requires the HNW individual to identify their potential risks, evaluate the best solutions and then execute a plan.

PHASE I: Understand Your Risks 

The key to understanding your risks is taking a real accounting of the mechanics and pedigree of your family and its properties, where you live, where you travel to and more. This will help highlight any potential vulnerability.

"Before there's a disaster, take stock of what you have, document it so that you're not scrambling after a loss to piece back what you owned. And don't forget to maintain it. When you acquire something new, make sure it's added to this master list," said Susan Ogrodnik-Smith, CIC, Chief Sales Officer, Personal Lines Insurance, HUB International. "Photographs and a video inventory will help you remember what you owned and will help to establish the condition of each item."

The annual or quarterly review with your insurance broker is the optimal time for risk analysis. Because risks fluctuate over time and can require different solutions or a change in coverage all together, it's an ideal time to discuss any potential areas of additional exposure to ensure that you have the necessary coverage.

PHASE II: Create A Plan 

Once you understand your risks, it's time to put together a formal disaster preparedness plan. This may require a different scenario for each type of disaster, depending on the range of risk. Work together with your family to determine the best responses to each. Remember to consider elderly or disabled people, animals and staff in your care when writing the plan. Practically, this disaster plan must include:

  • Establishing two places to meet
  • Updating your cell phone to include "ICE" contacts.
  • Designating an out-of-state friend as the family contact.
  • Reviewing how to use household safety apparatuses.
  • Securing the right coverage.
  • Touching base with your broker.
  • Fortifying your home.

PHASE III: Train For It 

It's not enough to create a plan; you have to make sure everyone involved can execute it.

Depending on the risks and how in-depth your plan is will determine how often you need to practice it. Ogrodnik-Smith recommends revisiting the plan at least annually, if not twice a year, as well as conducting fire and emergency evacuations regularly.


Natural and criminal disasters affecting the HNW community have amplified the need for individuals and families to fortify their homes and make safer choices that demand advance preparation. The ultimate goal after a disaster is to return to normal life as quickly as possible. Planning ahead and knowing what steps you need to take will help limit your risk and minimize vulnerability.

Contact an advisor at HUB to learn more.