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A new Chubb report has found that 76% of wealthy Americans and Canadians believe exposure to extreme weather due to climate change is among the biggest threats to their homes.

Sixty-three percent of respondents to the property and casualty insurance company’s reported that weather-related water damage, such as damage from hurricanes and floods, is a major concern, and 31% pointed to wildfire risk as a top risk.

“We have experienced the consequences of increasing frequency and severity of weather-related property damage across the country with more powerful storms, wildfires, and the unexpected occurrence of deep freezes in southern states,” said Jennifer Naughton, executive vice president and risk consulting officer for Chubb Personal Risk Services.

The report’s findings are based on a survey of 800 high-net-worth individuals in the U.S. and Canada. Respondents had investable assets of at least $500,000, with the majority reporting assets of $1.5 million to $25 million. Ten percent of those surveyed had assets over $50 million.

“Our research reinforces important perceptions that we have also been hearing directly from our clients,” said Ana Robic, division president of North America personal risk services at Chubb. “The wealthy and affluent are very much aware of the compounding risks in this environment — from extreme weather, potential lawsuits (and) risks to their property, including the collections they are passionate about.”

She added: “For agents and brokers, the key takeaway is that they should feel confident engaging their clients to identify and close any gaps in protecting what they value most. Coverage for this segment requires customization. The right insurance advisor understands the unique challenges of protecting the homes, collections, and lifestyles of the wealthy and understands how to structure prevention and coverage for their risks.”

Naughton explained that while weather has received much attention, damage within homes from sources such as failed plumbing lines, leaky waterlines and other malfunctioning appliances “can be destructive and often require long and costly repairs for those impacted.” More than half of respondents pointed to water leaks as a top risk.

Liability risks are also on the minds of the wealthy. Chubb found that while 92% of respondents are concerned about the size of a verdict against them if they were a defendant in a liability case, only 36% have excess liability insurance.

Forty-five percent expressed concerns about accidentally hitting a pedestrian, and 40% were concerned about liability issues should they be involved in automobile accidents in which they cause bodily harm.

“We have observed that many homeowners aren’t aware that liability policies are available that go beyond the basic coverage offered in a homeowner’s policy,” Robic said in a press release. “This is where an agent or broker can add value to closing the protection gap by providing expertise and advice to identify vulnerabilities and recommending the right coverage to protect assets and, most importantly, prevent losses from happening in the first place.”

Chubb’s survey found that only about half of this consumer segment is looking to their agent or broker to help close protection gaps. The report notes that the collective gap between the risks that wealthy North Americans see ahead and their understanding of how best to protect against them is growing.

“We see this gap playing out across our client base at an alarming rate over the last five to 10 years, and these risks are only becoming increasingly magnified,” Robic said in follow-up correspondence.

Topics Trends Liability Climate Change Chubb