Holiday gifting trends being driven by HNWI

The silly season brings with it a number of unique risks that the wealthy would be wise to take note of, whether it is to remember to insure that expensive gift under the tree or to be aware of safety and security risks in and around your home, when enjoying a stay-cation or going on holiday.

“Many wealthier families who would have travelled overseas this festive season and have recently had their travel plans dashed may now opt to spend more handsomely on local holidays at exclusive resorts and luxury accommodation,” says Tarina Vlok, MD of Elite Risk Acceptances, a specialist high-worth insurer and subsidiary of Old Mutual Insure. “We may also see wealthier individuals buying their loved ones expensive gifts, such as art, jewellery, or luxury name-brand handbags, shoes or designer sunglasses; all of which are popular gift choices for our client base.”

According to news reports, consumers are likely to spend the most on travel and experiences, followed by electronic devices this holiday. This is echoed by the 2021 Deloitte Holiday Survey, which shows that the average holiday spend has increased, aided by a return to experiences. It finds that high-income households are driving the uptick in holiday spend.

Present choices may include Montblanc pens, Rolex or Cartier watches, or items from luxury fashion houses like Louis Vuitton, Prada or Gucci. Earlier this year second-hand luxury house Luxity reported selling a  Hermès handbag for R220 000.

“Yet we continue to see that the ultra-rich tend to underinsure when it comes to luxury items and over-insure against low-risk threats. This can be especially devastating for those with sentimental investments such as jewellery, art, classic cars or wine,” says Vlok, adding that shockingly, on average people are underinsured by 40%.

“Remember to ensure that your sum insured is sufficient to cover your high-ticket purchases this festive season, as a loss whether through robbery, damage or other means, can be devastating if it happens during the most wonderful time of the year.”

Top tips for stress-free holiday bliss

Here are a few top tips provided by Vlok to keep your luxury items safe this holiday season:

  • Don’t share pictures of your new bling or luxury gift on social media, especially as crime syndicates are very active at this time of year.
  • Keep the proof of ownership of your jewellery items and get it to your insurer as soon as it is bought and not after the festive season.
  • If you are gifting a high value item to someone who is not in your immediate family, it is the responsibility of that person to insure the item when they receive it. Until then, it will be covered under your own policy.
  • If you are travelling on a local holiday with an expensive piece of jewellery, check with your specialist HNWI insurer whether this is covered under your normal policy, as most insurers require you to notify them if you are removing it from your bank’s safety deposit box, or if your storage conditions have changed (e.g. no longer being kept in a locked safe overnight).
  • Many homeowners don’t need to update their insurance coverage during the holiday season, however this is not true for everyone. If you plan to decorate your home with extravagant ornaments, entertain guests or purchase expensive gifts, you might need to review your liability or personal property coverage with your insurer or broker.
  • If you have to go to a shopping mall, be extremely vigilant when locking your vehicle to avoid becoming a victim of car-jamming.
  • If you are you planning to bring the holiday spirit indoors and lavishly entertain guests at home, try to be discreet. Park all the vehicles on your premises where they can’t be seen from the street. Encourage guests to use a taxi hailing service. Homeowners should still lock all doors not visible from the garden, ensure the electric fence is functioning and all perimeter entrances remain closed or monitored at all times.
  • Travelling? Have your car serviced – and safety checked – before heading off on that long drive to the bush or coast. Make sure your home’s security is in good working order before leaving and remember that unattended homes are also a prime target for criminals during holiday time.