Jonathan Crystal is an Executive Vice President of Crystal & Company, which is one of the world’s leading strategic risk and insurance advisors. From common residential insurance issues such as leaks and fires to once-in-a-lifetime events such as Hurricane Sandy, Jonathan walks us through how to protect you and your family upfront so that you can rest easy and enjoy your investment in homes and other personal property.

Jonathan Crystal is an Executive Vice President of Crystal & Company, which is one of the world’s leading strategic risk and insurance advisors. Crystal & Company has been in business for over 80 years and three generations of Crystal family ownership and management. Jonathan currently serves as a member of the Executive Committee and as Chief Financial Officer. During his tenure with the Company, Jonathan has served in a number of capacities, most recently leading the firm’s Private Client Services unit.

In your real estate division, what types of clients do you focus on?
We work with a wide range of corporations, institutions and individuals. On the real estate side, we work with developers or private equity firms or investors in real estate. In addition, a significant portion of what we do at our firm involves individuals and their families. That includes property and casualty like homes, vehicles, watercraft, jewelry, fine art and personal liability as well as life insurance.

Since most of my readers are individuals, can you walk through the basic requirements in this day and age for individuals in co-ops, condos and single family homes?
Condos and co-ops. The by-laws of the building are going to define what you’re expected to protect in terms of your property. You’re probably going to be required to maintain a certain amount of insurance by virtue of the building’s rules. There are a lot of misconceptions in terms of what you are responsible for. For example, if there were to be a fire, the building is generally only responsible for restoring your apartment to the four walls, ceiling and original flooring. Anything inside your premises whether it’s cabinetry, new flooring, custom moldings, furniture or any other personal property is likely your responsibility under your insurance program. Making sure that you have sufficient and correct coverage is your responsibility, not the buildings’. Another consideration would be if there were a situation where there was a conflict between you and the buildings’ insurance, it is better to have your own insurance company representing your interests rather than having to deal with it yourself.

A brownstone is a home. So, you have all of the challenges associated with home ownership whether it is leaky roofs or flooding basements. There are certain insurers that specialize in brownstones. And, if you are planning to renovate one, it is important to take that into consideration when selecting the insurer.

Are there any additional policies that you recommend including such as umbrella insurance policies? What about summer rentals or other special circumstances?
One of the things that we consistently see is insufficient liability insurance. I think that a lot of people come to New York, they rent an apartment, they get some renter’s insurance. Maybe they get a little bit of liability insurance, but if they don’t get a car or they don’t drive, then maybe they don’t. I believe that everyone, once they get out of school and are living on their own, should have some amount of liability insurance. At least $1 million. Really, once you get to a point where you get your own apartment and are starting to build up your wealth and want to protect your family, having some basic level of umbrella liability insurance is important. A basic layer of $5 million of umbrella liability insurance is what we would recommend. We created an on-line tool called www.whatsmyliability.com where you can do a self-assessment and get a sense of the right amount of liability insurance for you.

For example, if there is a leak from your apartment and the water drips down into the apartment below, you’re responsible for the damage to the apartment below. And, that, frankly, in New York is one of the most common liability issues. You don’t really know what’s below your apartment. There might be a multi-million-dollar art collection!

Other things to keep in mind. Any time you are doing something that is a little different, it is not a bad idea to pick up the phone and call your insurance broker or agent. So, you may be renting a boat for the weekend to go out sailing with some friends or taking a summer rental. Give a call and say – I’m thinking of doing this. What do you think? Is there anything you think I should be concerned about before I sign the contract? And that last thing is important. Most contracts are written very favorably to the other party and there are often times when you can request a change or insert a specific clause to give you some additional protection and peace of mind.

This is definitely the case when it comes to contractors for renovations. There are two parts to that – understanding what their obligations are to protect you, but also taking a look at their insurance to make sure that it is adequate.

There has been a lot of advertising recently about bundling of insurance policies – auto, home, etc. What is your take on that and is there an advantage to bundling?
There absolutely is. Like anything else in life there are economies of purchasing. You will get better pricing, but you will also get better service from the insurance companies. In an ideal world, we recommend having one insurance relationship that encompasses all of your homes, personal property, vehicles, etc. We find that in those situations where there are multiple insurance agents or companies, it is not just that there may be gaps in coverage, but there may also be duplications that result in additional costs to the client. By bringing everything together, you may even save money.

I think that it is also a missed opportunity to not have one firm that is looking at everything you are doing and anticipating what your needs are going to be. You just bought a new house? That question should lead to – Are you going to be doing renovations? Are you looking to do any type of construction? What type of contractors are you using? Do you want some help looking at the contract to make sure that your insurance is sufficient, that the contractor’s insurance is sufficient? Having a good relationship with someone that you can call on when you have questions can make all the difference.

Lastly, the topic on everyone’s mind – Hurricane Sandy. What fallout did you see among client groups and how, if at all, did you revise your recommendations for your clients?
With every disaster, you learn new things. Hurricane Sandy opened all of our eyes that floods do happen! There are a lot of questions about flood insurance that come up. Banks generally require you to maintain flood insurance as part of your mortgage. You may have a third-floor condo and it doesn’t make sense to you that you are required to carry a flood insurance policy. The bank requirements are the bank requirements. Sometimes they are set at a policy level and they may not make any sense and you just have to abide by them. It could also be that you are in a building where access to your apartment might be limited if the lobby is flooded and you would need to find alternative accommodations. That was a big lesson learned with Hurricane Sandy. In many cases, people’s apartments were not damaged, but they didn’t have heat, electricity or access. Understanding where and when your insurance would and wouldn’t apply is a big consideration.

Hurricane Sandy reinforced the importance of basic preparations and plans. For example, back-up generators for homes outside of the city or having a contact who lives in the vicinity of a secondary home and can check on it for you after a storm. These types of disasters tend to make people refocus on what they need to do to protect themselves and their family. Sometimes the best protection is thinking ahead.

What about the downtown neighborhoods, specifically, with respect to Hurricane Sandy?
The downtown area is the fastest growing area in the city from a residential standpoint. A lot of new developments and new developers. Some of them learned important lessons in terms of response. We have been in business for 80 years. Every disaster is its own, different permutation and we are first and foremost always concerned about families. If you had an alternative place to stay, that’s great. Unfortunately, many downtown families were displaced and depending on what type of insurance coverage they had in place, it may or may not have covered alternative accommodations.

Final thoughts?
Hopefully, an experience like a fire in a home or a flood is the kind of situation that you only experience once in your lifetime, if ever. Having a professional there who can walk you through, step-by-step, is really helpful towards peace-of-mind. And, hopefully, we are there for a lot more exciting occasions! Whether it is planning a big wedding or buying that first piece of art. It’s a lot more fun to work with families over decades and generations. To see them grow and move well beyond their first homes.