NEW YORK — Recent reports of an uptick in home invasions in many parts of the United States may increase the popularity of a policy that covers medical and other costs of the invasions.
So far, this type of policy is available only from Chubb Group of Insurance Companies in Warren, N.J., which specializes in luxury homes and other insurance needs of the wealthy. More insurers may enter the market if the need for the coverage grows, observers predict.
The Chubb policy covers up to $300,000 of the cost of psychological therapy, temporary relocation, lost salary and security enhancements as a result of a home invasion. Coverage also applies to other equally traumatic but less frequent events, such as child abduction, carjacking and stalking.
Although home invasions are on the rise, it isn’t known by how much, because most police departments don’t track them as a separate crime, according to Chris McGoey, principal of Crime Doctor, a Los Angeles security consulting firm. The invasions usually are recorded for statistical purposes as burglaries or robberies, he noted.
Many financial advisers and even some insurance brokers seem to be in the dark about home invasion coverage.
“I haven’t heard of that coverage,” said Keith Singer, president of a Fort Lauderdale, Fla., advisory firm with $35 million under management that bears his name. “There are so many other issues that clients haven’t addressed, such as
estate planning, taxes and life insurance; there just hasn’t been time to worry about that.”
“I haven’t been asked by clients about that type of policy or worked with Chubb on that program,” said Ken Kukral, chief executive of International Excess Agency Inc., a Richmond Heights, Ohio, insurance brokerage firm. “But if a client did need that coverage, I would look into it for them.”
Chubb’s policy costs between $70 and $135 depending on the client’s state of residence, said company spokesman Mark Schussel. The same premium applies to all homes in a state, regardless of the city or part of the city where the home is located, he added.
The invasion policy is available only to clients with a Chubb homeowners policy, Mr. Schussel said. California and New York homeowners purchase it the most, he added.
More than 30,000 Chubb clients — about 10% of the homeowners insurance policyholders — have purchased the policy countrywide, according to Peter Spicer, a vice president of Chubb.
Some clients incorrectly assume that their homeowners and health insurance cover costs related to home invasion and child abduction, noted James Hamilton, a Chubb senior vice president.
“A standard homeowners policy addresses only loss or damage to property and injuries to others,” he said. “And health insurance often provides only limited mental health coverage.”
Although medical and psychological costs related to child abduction are covered, the policy doesn’t cover the ransom, Mr. Schussel added. Separate kidnap and ransom coverage is available for that risk, he noted.
However, the invasion policy does cover the payment of rewards offered to catch perpetrators. Abductions related to child custody disputes aren’t covered, Mr. Schussel added.
Fear a factor
“This is the type of coverage that can help people with fears that these events might happen,” said Mark Schwartz of Corporate Insurance Advisors of Fort Lauderdale, Fla., an insurance agent to which Mr. Singer refers
financial planning clients who want to buy property-casualty insurance.
“It’s similar to identity theft insurance in that regard,” Mr. Schwartz said. “As the odds of an incident became greater, insurance became available for it.”
“I haven’t heard a lot about abductions — except in Colombia,” Mr. Singer said.
“While admittedly the odds are not tremendous that the covered events will occur, people in the public eye and who have more to lose and are prone to these kinds of incidences are often interested in the coverage,” Mr. Schussel said.
“We’ve had requests for this policy from very high-profile people,” he said. “At the higher end, personal security and other risk management services become critical.”
