Do Not Rely on State Farm if Living Abroad

If keeping a house back in the home country while working or living abroad, never assume that the home country homeowners insurance policy will provide any protection at all for international property insurance and international liability insurance.  In fact, if the home is empty or vacant for more than 60 days do not assume the traditional homeowners insurance company will cover a vacant home either.

We have seen people take expatriate assignments abroad and take over $50,000 of international personal property including $5,000 wedding rings, and assume companies like State Farm or Allstate are still providing the coverage even though they are living in Russia or Germany!  This is almost never the case if one has taken up residence abroad.

Yes, if you are traveling internationally on vacation for example, homeowners policies can offer some degree of protection but not if you are living abroad for say.. six months or longer.  In all cases these people need expatriate property insurance (a form of international property insurance) as well as international liability insurance.  In many cases they will need expatriate vacant home insurance coverage as well. 

International Liability Insurance More Important Than Personal Effects Coverage

In a recent survey of expatriates we find that for those that looking into international property insurance and international liability insurance, it's protecting their property that made them investigate insurance solutions.  Most expatriates seem to ignore the global liability protection?

At International Property Insurance Group we feel that international liability is far more important than protecting international personal effects, although of course we feel both are important.  What's more, international liability insurance is very inexpensive.

No one wants to have a $40,000 uninsured loss to property because of fire or smoke damage, or because there was a fire in the neighboring apartment but this loss does not have the potential to ruin your life.  A $1,000,000 lawsuit where you carry no international liability insurance on you and your family can bring financial ruin.  

Again, do not expect your employer can step in and pay a personal claim, no matter how important your expat assignment is.  Even if you flee the country to avoid the suit, and there may be no way the "judgement" can find you back in your home country, this could cost you your job and your career.  Employers expect employees to properly protect themselves and their families for overseas property insurance and global liability.

Why International Liability Insurance is Essential for Expatriates

When people move abroad to live or work in another country, one of the very last things they think about is personal liability insurance. Before we explore why we think this may be the last thing on people's minds, let's examine why international liability insurance is absolutely essential for anyone with an established net worth. This coverage is not just for the rich expatriates on high profile assignments.

International liability insurance would cover claims against the insured or the insured's family related to lawsuit or damage awards due to negligence (the the judge or local magistrate deems you or a family member negligent, whether you were or not!) A lawsuit can happen anywhere, it's not just something that happens in the U.S. or the home country. In many countries it's not a lawsuit as most would picture, but a damage award. Here is what would happen in many countries; You or a family member causes harm or financial loss to a local national in your host country. You are brought before a judge or local magistrate. The judge hears the evidence and orders you to pay the defendant $200,000. No 4 month trial... no appeal... bang. What do you do? Are you carrying global liability insurance? At $5 a month to protect the entire family, why not?

Again, we interview many with the false assumption of "I work for a large multinational company and they must have insurance for me in this area." This is almost never the case. They have no corporate or commercial liability policies that can cover your personal claims.

What happens when someone does not carry international liability insurance, the company has no insurance to assist, and a large damage award needs to be paid? Well, the options are few all all are not good for the career of the expatriate.

• The person does not pay and is either jailed, has items seized, or is forced in some way to leave the country.
• The person pays the entire personal liability claim out of his/her own pocket perhaps writing a $50,000 check.
• The employer is in some way, dragged into the claim either to assist in paying the claim or because the defendant is not carrying any personal liability insurance as an expatriate, the employer's legal entity is named and attached in the lawsuit.

Again, an expatriate that takes the arrogant attitude of "my company would pay it for me" has certainly not even attempted to think through the issues of why this is very unpleasant, if not impossible. Our next post will be about just that.

Overseas on Work Assignment, Don't Assume Employer is Covering Your International Personal Effects

Another major mistake that expatriates make when relocating internationally to work is assuming their employer has all of the following issues covered and they need to do nothing. In fact, the bigger (and more all-powerful) the employer, the more these individuals assume they don't need to take personal responsibility for the following:

• International Personal Property Insurance (to protect clothes, furniture, electronics, rings)
• International Liability Insurance (to protect personal net worth from lawsuit)
• International Renters Insurance (which is a global property and liability package policy)

Here are the facts. 95% of employers have no insurance policies that will cover the personal losses of an expatriate on foreign assignment. Whether this be a claim for a fire loss, theft, or a damage award from a local magistrate for $50,000, there is no coverage via commercial policies. There are legal and tax reasons why an employer cannot step in to bail out an expatriate's losses.

Surveys from International Property Insurance Group indicate this as the # 1 reason expatriates don't proactively look for these lines of insurance on their own.

Biggest Mistake Expatriates Make, Forgetting the International Property Insurance

One of the biggest mistakes expatriates make when they go to live internationally on a work assignment, is believing they have to take no action to insure their international property and to provide themselves international liability insurance. The reason is, they falsely believe their employer is either providing these coverages for them, or in the event of loss, the employer would financially bail them out.

This is almost never the case. Employees need to understand that as soon as the moving truck backs away, it is their own responsibility to secure international property insurance and international liability insurance to protect their financial net worth or risk everything. Many expatriates will not take this initiative or even investigate options for their international personal effects believing the employer will be there for them in the event of a personal claim.

The legal and tax reasons why employers cannot get involved is explained at www.internationalpropertyinsurance.com