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Insurance Gone Wild,” hosted by Dennis Settlemoir and Stephanie Lencioni, the discussion centers around the intricate and often frustrating world of insurance as it relates to YOU the consumer.
Our Motto is ”We are consumers too! And those payments can SUCK!”
Welcome to another episode of Insurance Gone Wild. I'm your host, Dennis Settlemeyer, and with my lovely cohost, Devereaux. And her owner
Stephanie:Stephanie Lencioni.
Dennis:Stephanie Lencioni. Devereaux is our unofficial or maybe official mascot.
Stephanie:Official.
Dennis:She's official. Official.
Stephanie:Look at this girl.
Dennis:So, anyway well, it's Tuesday. We haven't been together for a while.
Stephanie:We haven't.
Dennis:Two or three weeks now.
Stephanie:I've missed you. Same. Same.
Dennis:I've I've Same. Missed me too. I I lost my mind about three and a half weeks ago. So it has been a crazy ride, but you've actually took a little time off. Good for you.
Stephanie:Thank you.
Dennis:Nice nice beautiful place. So Yeah. Here in The US, not abroad. You would like to go back?
Stephanie:I would.
Dennis:Yeah. It's nice. Yeah. It's beautiful there. Pictures that you sent are good.
Dennis:But any case, we, have a specialized topic today.
Stephanie:We do with a
Dennis:special guest. A specialized guest, special k, special ed guest.
Stephanie:There's definitely special in there.
Dennis:Yes. Yeah. So today, we have with us, Todd Burnell, who is one of our producers at our insurance agency. It means he's one of our, lack of better term, sales guys. We prefer to call them advisers.
Dennis:But, anyway, we're gonna talk he's gonna share with us a little bit of information that we for a sort of a niche that we have working with folks that have, investment properties, whether it be short term rentals, long term rentals, or other types of investment properties that are out there. Some things to consider, some things to be aware of if you are an investor thinking about getting into it. These are some things that we would talk to you about. But we've also discovered, which we'll talk a little more in detail about, people that have been investors that have a number of homes don't really understand how the insurance works or how it could work or how it should work. Yep.
Dennis:And so we've we've spoken to people who've had investment properties for ten, twenty years, and they had no idea that their policies were needed some updating, let's say. So, you know, I think what are what are some things as you talk to people as you're learning talk? Well, maybe tell maybe, first of all, tell us just a little bit about yourself. It doesn't have to be long. Let's do the church thing where you stand up, everybody stares at you.
Dennis:No. I'm teasing. Just tell us a little bit of your background, how long in you've you've been around
Stephanie:things like that. Second clock, Paul? I'm just kidding.
Todd:No. Well, I was born in Oklahoma, but I tried to leave that behind me. Yeah. No. I've been in corporate America.
Todd:Worked for Staples, Office Depot for years. Uh-huh. During COVID. I've changed a lot of things. And, Dennis, I knew you for twenty years before that and you run through insurance.
Todd:And I we started talking and came over with you to take care of PNC. And as I did that, it just, to me, wasn't my passion. And somewhere in there four years ago, we were up in Broken Bow, Southeast Oklahoma. Lived And in Oklahoma, never knew that part of the state existed. And anyway, Airbnbs all over the place and started just thinking and looking in that market and all the rental market here in Texas.
Todd:And I'd have somebody call me up and say, hey, I got three rentals. I need to insure them. So I just go do the three rentals and move back to whatever else I was working on, whether it was home, auto or commercial and, didn't, some of them didn't seem to be set up right. You know, well, I've got an LLC. Okay, you're with a carrier that doesn't write LLCs.
Todd:How are you doing that? And just kind of I'd set it up right and just move on. Didn't really think about it further than that. And really, over the last probably year, two years, I started seeing so many people that are, for whatever reason, didn't have the income to get into a house. Man, they're renting.
Todd:And there seems to be more and more of that going on. And people my age older are moving out of their homes Selling it, to it. And maybe they're not selling it. They're putting it as an income property. And you've taught me my biggest thing is how do I protect my customers' asset protection.
Todd:And I'd see stuff not written correctly. And I'm like, you've got a lot of exposure here if you've got two, three, five houses. I mean, you may have a 2,000,000 of investments that you've built up over all those years, and it's not done correctly. And so that's where I have really started focusing my time. And I think there's too much opportunity out there, and we're able to ride in a lot of different states.
Todd:So that opens up even more doors. And then just talking to people about helping them understand what they don't know so they can make, to me, wiser decisions to be covered correctly. And it doesn't mean it's more expensive. It's just certain carriers do certain things and certain carriers don't. And, and a lot of times, my counterparts with other agencies or if I'm a captive agent, they don't talk about certain things.
Todd:They just, oh, yeah. It's covered. And I'm looking at the policy. And I'm like, no. You didn't set this up correctly.
Todd:So Mhmm. Anyway, that's my. Sorry, that was forty five seconds.
Stephanie:So what I was gonna say, and you kind of touched on it earlier, Dennis, and then Todd, you talked about it with counterparts, whether they're captive or whatever agents, but you've got these people who have had investment properties for ten, fifteen, twenty years maybe, and they don't know that they're covered completely incorrectly. And that's also because I I feel like the main reason well, there's two things either. One, they don't care. Right? And then that's not our client.
Stephanie:Or two, they're within the agent that just it's so different. Like, that's another part of insurance that is just it's a niche market. There are lots of little complex things and nuances within those policies that as just a regular agent doing home and auto, you're not taught. So you either go and dig deeper to find the answer or you just write it and then hope to hell that nobody has a claim. Right?
Stephanie:So so that's not knocking the other agents, but it is, but it's not. But I guess the point is as a consumer, you wanna go out there. If you have something that is just not a straightforward, I own a home, I need homeowners insurance, and it's something a little bit different, Make sure you're dealing with an agent who actually knows the market specifically for what you're trying to accomplish.
Dennis:Yeah. There's stuff that there's markets that we don't go into because we just we don't we don't know the different. Yeah. We just don't know those markets.
Stephanie:Even within Texas, going down the Houston area and Corpus Christi and the The Gulf, you're dealing with a totally different market. Like, because you're dealing with hurricanes and all of the different it's different. So go to the agent who knows Yeah. What you're looking for. That's my my soapbox.
Stephanie:Alright. Anyway, go
Dennis:ahead, sir. No. No. You you I think that's a great point. The the question that we would have is, as you're talking to people about these things, what are some give me maybe let's just start with it.
Dennis:What is the the top thing or one of the top two things that you run into that people don't know or they have questions about that, like, they know something's not quite ripe. They can't put their finger give give us give us something here that when you talk to these folks that own these multiple properties.
Todd:So my first question, and to me, it's the most paramount one is, what's the name of the LLC? Uh-huh. Well, do I need one? Okay. And then my second question is you have the LLC.
Todd:I'm looking up the properties in the tax on the tax rolls through the appraisal district, and it's still in the name of the individual. I'm like, Okay. And I'm like, why is that important? From a lawsuit, somebody gets hurt on that property. The LLC becomes the named insured.
Todd:So that is who if there's a lawsuit, that's what keeps their personal assets separate from that house in that event. If it's all structured correctly. Sure. CPA is doing everything right and you're keeping your funds separated. Mhmm.
Todd:That's the key to that. So if all that's going on, but you have the insurance in the name of the husband and wife and not the LLC. It could be open. You are open. Because whenever they have a suit and they bring suit against the LLC because that's who they're paying the rents to, the insurance company's like, who's the LLC?
Todd:That's not a named insurer. So what I'll see is carriers that can't write an LLC. And a lot of your your big carriers that you're very familiar with Good advertise on TV. Advertise on TV. Uh-huh.
Todd:They can't write LLCs. So what do they do? The agent, because they're hungry and they wanna keep the business. Whether they do, they put it under as an additional interest, or they just don't put it on at all. Mhmm.
Todd:And they're it's all covered. Well, it's not. Mhmm. That's why you set up the LLC is for protection.
Stephanie:It's getting creative in the wrong way.
Dennis:Yeah. We've talked about this.
Stephanie:Yeah. Nope. I need you to learn to keep it up, sir.
Dennis:Sure.
Stephanie:Jeezy Pete.
Dennis:Maybe that pill. Anyway, yeah, because I forgot what I was gonna say. I got sidetracked.
Stephanie:Well, you know, that can throw anybody's game
Dennis:off. The look at disappointment in your eyes when it fell down to my chest.
Stephanie:Well, that got a little cocky there, didn't it? Yeah. Anyway
Dennis:What was I gonna say? No.
Stephanie:We're talking about LLC and writing it.
Dennis:Yeah. So, yes. We've talked about that you and I have had long conversations about this about when a home is deeded in an LLC Yes. Or deeded in the name of the individual, the policy should follow the deed. Because if it's deeded in an LLC and the policy is in an LLC and there is a lawsuit and the individual is named in the lawsuit, which they're going to be, Yep.
Dennis:There's gonna be coverage from the LLC policy to cover the individual because the LLC automatic the LLC itself automatically covers the individual. But if it's the other way around
Todd:Now you have.
Dennis:Now you have a problem. Now because if you'd see if the if the if it's deeded in LLC, but you just mentioned this, but the policy is written in the name of the individual, then you're gonna have a problem because now the insurance companies, they're they're gonna they're gonna get this lawsuit against the individual. Correct. And they're gonna be like, well and all this will come out during discovery.
Todd:Yes.
Dennis:If you ever been sued, you know what discovery is. That's when you have to sit there and answer a ton of questions by opposing counsel about different thing or even your counsel. There's a it's a discovery process. What was going on? The insurance oh, wait a minute.
Dennis:That policy who's this LLC? Yep. That's what the insurance company is going to say. We don't know the LLC. They're not an insured on this.
Dennis:So Yes. Guess what, individual? You're on your own. Because we don't have insurance on this. There's no coverage for the LLC.
Dennis:And be and the thing is, it goes back you even asked the question, does it matter if it's an LLC, or does it matter if it just in general, if it's in the name of an individual that let's just say the deed. Does it matter? Yeah. Well, we can't answer that. We can give you our 2¢ that it's better of putting it into an LLC, but your accountant or lawyer may tell you something different.
Dennis:But you usually use an LLC for two reasons. Right? It's it's asset protection and tax pass through. That's really the two reasons why you use an LLC. And if you don't use it properly, then it doesn't matter how many LLCs you have.
Dennis:Yeah. If you're mixing funds with your personal funds and things like that, a judge is gonna go, that's not an LLC. Correct. So most people don't know that either. That's a whole another podcast.
Todd:But
Dennis:so you have found that what you're finding is that people are their policy doesn't match the deed.
Todd:No. It's like they took the loan out when they bought the house in their name. And now five years later, they're putting it out as an investment property. Sometimes, may have trouble with the lender wanting to if they change the deed to the LLC, the bank, depending on the bank, can call the note.
Dennis:They
Todd:could. They can. So you have to be careful of that. So it's one of those, well, if you can't do that, then is the half million, million dollars that you've got on your liability, does that give you the comfort that you want? Or if you've got 10,000,000 or $15,000,000 in other assets, is it worth putting a bigger umbrella?
Todd:I mean, there's different ways to deal with some of that risk. But what I run into a lot of times is, oh, I've got an LLC set up. Well, they've got it set up, but they've never structured it right. They don't have the pieces of the puzzle put in place correctly. And it's not hard to do that.
Todd:It's just nobody asked them the questions. That's it more than anything. They just, oh, Okay, we'll just put it in the name of the individual. That's the easiest way to deal with it. And we just move on, and it's written.
Todd:But is it written in the way to protect the customer, the client? That's the question.
Dennis:I know what I was going to say also about the LLC versus the individual. From an insurance perspective, where it's really going to come out is during a lawsuit, and I I hit on that a while ago. During a lawsuit, that's when things are really going to be exposed if if it's written correctly or not. Because Yes. During if it's just a physical damage to the like, an a new roof or water damage or some, chances are the claims adjuster is not gonna go that deep into it to figure out who actually owns it, you know, on the deed.
Dennis:And most and here's the thing. People that own rental homes, they don't care at that point. What they care about, though, is a lawsuit because that's what could ruin them is a lawsuit. And that's when it comes out.
Stephanie:But the physical damage would still be covered. Right? So, I mean, if you I don't know, I think home, but I'm saying if you own the home
Dennis:Who owns the home? Who's
Stephanie:If the individuals own the home.
Dennis:Okay.
Todd:And
Stephanie:somebody thinks that everything is through the LLC. Right? But you're like, oh, well, you Todd checked the deed thing and it's mister and missus.
Dennis:Okay.
Stephanie:And then storm blows through. They're getting a check. Well, check goes to either Mr. And Mrs. Or if they have in the LLC, then it goes to the LLC.
Stephanie:So, like, even so at that point, it doesn't matter because either way, they're getting the check and they can cash the check. Right?
Dennis:Well, no. Well, if it's just physical damage,
Stephanie:it's physical damage like
Dennis:no, they're probably the adjuster is probably going to. Okay, let me back up. We've got to clear some things up with your example.
Stephanie:Okay.
Dennis:Who owns the who owns the house? In your example, who owns the house?
Stephanie:Let's say LLC owns it.
Dennis:Okay. And what is the name of the who's the name of the what's the name of the policies under?
Stephanie:Mister and missus. But mister and missus Control LLC.
Dennis:Mister and missus are members of an LLC.
Stephanie:Sure. They're members of the LLC.
Todd:They don't
Dennis:own the LLC. They're members of the LLC. And that's not splitting hairs. That's just a legal thing.
Stephanie:That's fine. I'm gonna say tomato tomato for the purpose of this, though. I let you I'm sure you are more correct. So members of the LLC, managing members, if you will, mister and missus managing members or managing member, whatever, doesn't matter, but they LLC.
Dennis:The then this case, the physical damage to the to the house, the the check will probably be written to the individuals who were on the name of the policy. I don't think that the adjuster usually going to go that deep to find out if they're actually the owners will look it up on the appraisal district. So in all that, so you're probably not going to have an issue with that example.
Stephanie:Okay, so that's I guess that's kind of my point, though, is that with the it's going to be it should be covered if the insurance was there and the coverage was there and it's
Dennis:But it doesn't have to be, but it could be. It's probably going to be.
Stephanie:Yeah. And I would say most insurance companies at that point are probably going to look to find the coverage if you're the insured. But I know when we were when I was a claims adjuster, we would have to look up who the owner was. So let's say it was I guess it's different because it's liability. So it's a different example.
Stephanie:So never mind.
Dennis:Because like Physical damage portion will probably be be paid.
Todd:Okay.
Dennis:That's my gut telling me that. I think that you're gonna run into when it becomes very legal. And now there's a lawsuit. I think in today's world, insurance companies gonna be looking to get out of pain.
Stephanie:Different. I'm not talking about lawsuit. I'm talking about property damage.
Dennis:No. No. We're talking about two different
Stephanie:yes. You brought up property damage. I was touching on property
Dennis:about two different types of claims, liability versus property.
Stephanie:And that's why I negated. I was like, well, never mind on that. But even with property damage
Todd:Mhmm.
Stephanie:Ice I can't
Dennis:Probably not
Stephanie:imagine they would make a huge when you have mister and missus who
Dennis:I don't think they would.
Stephanie:Are the members of the LLC. I can't imagine that there's an argument to not
Dennis:have coverage. They would. But I think the insurance company would have the right to say no because it's not the same ownership. Okay. So but chances are they're not going to be that picky about it.
Todd:What I love is we've five, ten minutes running around this because there's misunderstand when I say that, trying to understand. So when I'm talking to a client, this is where when I'm talking through this, this is where it makes sense if you're scaling and adding properties. What's the ideal thing? Get your LLC set up first. Start moving your properties when you buy them.
Todd:It's directly into the LLC so you're not having to do a quick claim deed or something else to flip it down the road. Because that's the thing is people get tired. They don't procrastinate. I don't want to deal with that. I'll get it retitled later on.
Todd:And later on doesn't happen. And so to me, the ideal thing is if you're buying properties or you're wanting to scale, even if you've just got one or two, is if you've got the LLC at the beginning, that's who the loan is going to be in. They may still look at you financially, you and your wife as far as the house. But the house gets the bottom loan. Everything's in the name of the LLC.
Todd:So it's all done from the beginning correctly. Insurance follows suit. It's going be in the name of the LLC. So everything is done it's it's when somebody's already got pieces in play is, okay, let me understand all the pieces to the puzzle. And now let's talk about how you get it correct.
Todd:Mhmm. Because at the end of the day, it's like, great. I got a lawsuit over here at a house. Something somebody falls. They're going I don't know.
Todd:There's a banister in a staircase that didn't do what it needed to do. My grandmother fell as she was going down. Guess who's on the hook? I promise you somebody that has that happen. Bannister comes loose, something, whatever it is, they're coming after somebody.
Todd:And so then their question is, how do I protect everything else that that homeowner has? Mhmm. That's where to me the asset is. Did we set it all right so that that one event stays local to only that home and that policy, and it doesn't jump through that barrier to their personal assets and everything else.
Stephanie:So you just brought something else up though, that home specifically. Right? So is there at what what is the scenario to where it opens it up to say, oh, well, now we can go after everything that you have.
Todd:Well, that's where you get above my pay grade. But if you've got if you've got if you've got the LLC set up, but they're commingling funds, they're paying for repairs to that house out of their personal funds rather than out of the LLC.
Stephanie:No. Let's say it's an LLC that has five it's got five homes.
Todd:Five homes. Okay.
Stephanie:Right. So how do you stop them from going after the entire LLC and just saying, hey. This is the one home.
Todd:I've got investors that they some of them, they still put them all together. I have other ones that are like, okay. We put a million dollars worth of homes in one LLC, and then we set up another LLC and another LLC. So I see it done different ways. Okay.
Todd:I don't have the magic answer to that.
Dennis:I that's when you have to get a lawyer involved. Is it better to put them individual? Because we've seen it where it's the address LLC. This next address, like 123 Main Street LLC.
Todd:Right.
Dennis:456 Main Street LLC.
Stephanie:So just then we split with the to the one.
Dennis:You can, and you could do it that way. It really depends on the lawyer and what they're looking at as the whole because we don't know that. But if there's common ownership between those, common ownership, meaning that it's the same member or same two members, they own everything together, then we could we could write it all on one policy. Right? Mhmm.
Dennis:We could write it all on one policy. So there's things that we can do rather than writing a bunch of different insurance policies for all ten, fifteen homes to stick it all on one policy because we have common ownership.
Stephanie:Okay. And that's a totally different thing that we've been talking about. So do you want to elaborate on that at all?
Todd:Yeah. I mean, to me, we're the you know, I have people that have or clients that have short term rentals. I have some that have long term rentals. And where's the bigger exposure? Well, if I'm just looking at it from a bird's eye view, I'd be more worried about having an umbrella or making sure I've got it more protected if I have short term rentals.
Todd:I have not one tenant in there all year long learning where all the switches are, they can walk through the house in the dark. I've got potentially forty, fifty different families coming in there, weekends, probably drinking going on. There's other stuff going on, partying, what have you. Much higher chance of loss, injury. So would I want a number on somebody that's got short term rentals?
Todd:Probably. There's probably going to be a swimming pool. Just depending on where it's located, there's going be a lot more risk. So would I want to make sure I've either got more coverage protecting my assets from that home. Or to Dennis' point, Okay, maybe I've structured the short term rentals where I only put two or three in one LLC.
Todd:Or maybe I do them all individually. So if something happens here, it's not to say the attorney couldn't sit there and go say they all have common ownership. But that attorney's got to do a whole lot more legwork. And are they going to do all that? Are they going to be more lazy?
Todd:I can't answer that question. But I'm just looking at it. How do you protect? What are the steps I can do that aren't going to be huge and laborsome for my client to protect that? And to me, the biggest one is if I've got short term rentals, I'd probably want at least another million, maybe $2,000,000 umbrella, probably $2,000,000 $3,000,000 and it covers their entire portfolio.
Todd:That should cover just about anything coming. I mean, even if somebody loses their life, I wouldn't think that loss you'd never know. But I'm just saying 2,000,003 million dollars umbrella, that should cover the lion's share of what could happen, even loss of earnings for that spouse if somebody got killed or something like that for loss of income and so forth. But I just run into people that don't really think about that. I'm like, yeah, it's what's going on inside of the house.
Todd:Swimming pools, those always scare me. I'm always wanting liability, whether it's a homeowner or otherwise. I'm like, you don't know
Dennis:who's Well, even hot tubs, got slipping
Todd:through Yeah, the yeah. So it's just being mindful of what those risks are and how do I mitigate for that? And then kind of going the second direction around that when you were talking about, do I set up a different LLC for every one of them? Probably the biggest thing when I talk with investors, if they're scaling I mean, somebody's got more than five properties, we've got some commercial products. And this is probably one the things I love the most is I don't know, let's say somebody's got seven properties.
Todd:Doesn't sound like a whole lot. But in the insurance world, anytime I'm doing a renewal, I don't care if it's a car, home, or whatever, I'm going to talk to that person three times probably over just that one policy. I'm going call them to let them know, we're looking at your policy. Have there been any changes? Then I'm going back and looking through all of our carriers to run a quote, bringing that back to them.
Todd:Then if we're looking at anything else that we need to change, I'm gonna talk to that customer probably three times on one policy. I've got seven homes. I'm touching I'm telling that customer 21 times a year to talk about those properties. Then I still have their home, their auto, their personal umbrella, and whatever else they've got. I'm like, I would hate to talk to me 25, 30 times a month
Dennis:Boy, or a year. I'm telling you, one day is tough.
Todd:Yeah. So Yeah. Yeah. But so who wants to have to deal with that? And so we have carriers that I can put all seven homes, one policy whenever we bring it together.
Dennis:And we ran into that. I I think I know what you're thinking of. You're thinking of the one we that you that you ran into just recently where they had they had we had one of the rental homes. They had seven more. Yeah.
Dennis:And you came in and with a particular program we have, saved them $1,112,000 dollars a year on overall, gave them better coverage. And now one of but the selling point wasn't even the premium. The selling point, she's like the wife was like, you mean you could put all these on one policy? You don't have to deal with it once. Todd's like, yeah.
Dennis:She's like, really? Yeah. And it wasn't even about the money. It was just about the time that she spends tracking these things. Now she has to worry about it once a year.
Stephanie:Right.
Todd:Yeah. And you you know, she's asking me, it's like, what happens if I buy another house? I'm like, because we made it easy? She's like, yeah. I'm like, okay.
Todd:So we put this in place. September, you buy another house. We add it on for whatever remaining months. Same policy we just add in. If it's six months, we add in six months premium, and we roll on down the road.
Dennis:Here's a question for you. I already know the answer, but I'm gonna ask you. Okay. Say they buy a house, but this gotta have some work done on it. Can they put it on that same policy?
Todd:If they are, yes. As long as two things don't happen. As long as they're not changing the square footage
Dennis:Mhmm.
Todd:And we're not looting moving load bearing walls. Mhmm. Those are the two that so
Dennis:So it could be vacant and be renovated.
Todd:Yes. And it can go up under as a renter's policy or a landlord policy versus having to do it as either a vacant dwelling or a builder's risk. So you may sell one builder's risk because if they've got, I don't know, two or three pallets of wood outside, you got air conditioning that hadn't been installed, you may so want builders risk just in case that stuff grows legs and walks away at night. But as far as the structure itself, yeah, you don't need to do a vacant dwelling policy. You just set it up as the landlord policy, and it just moves on down the road.
Todd:And so that's one of the nice things. Not getting off into the weeds, but one of the biggest things is water coverage is covered under that. Theft, all of
Dennis:that Yeah, let go on with that, is that water coverage for a lot of those types of policies is excluded. So is vandalism and malicious mischief is excluded. This policy that we're specifically talking about right now covers I don't know if it covers VMM, but it certainly covers water.
Todd:It covers VMM? It does as long as there's work being done on the house, which it's gonna be if they're doing a if they're doing a if they're buying and distressed and they're rebuilding, or renovating, yes, it's got contractors in there. That timeline never stops. So once they're finished, if nobody moves in within sixty days, then yes, it would fall to it would still be up under the landlord policy because the intent is still to rent it out. Mhmm.
Todd:But, yes, you would lose coverage for theft and malicious loss on that side of it. Mhmm. But chances are they're gonna have it rented in sixty days. But the nice thing is I'm staying
Dennis:of Yeah.
Todd:I'm staying abreast of that. So we're having those conversations before we get to that place. And that's probably the biggest thing is people that don't sell this stuff all day long or they're not in it, they don't know where those timelines are for their client. Client doesn't have a clue that, oh, I haven't rented it out in seventy five days, three months.
Dennis:Oh, most companies, no coverage if the adjuster finds that out. But
Todd:the client wouldn't know that. Most of the time, don't know that and what's going on. And I'm like, well, this is where I live. I understand the importance of that. So when you've got it renovated, my first question is, Okay, we've got till September 15 or whatever that sixty day mark is.
Todd:I've got it on my Outlook. What am I doing? I'm calling them before that date saying, have we got it rented? If we don't, then we need to adjust it a different way. Yeah.
Dennis:Need to Does it change the premium if we flip it? Flip the switch on the type of coverage it needs?
Todd:No. If it goes back I mean, if it goes vacant dwelling, no, nothing changes on the cost. The coverage goes down. Why
Dennis:is The coverage has changed, but not the premium.
Todd:So why is that important to my client? You may to go out there every day or two and check it because if you have a water loss or something else going on, you are the one person that can tell me something's happened so we can deal with it once we get past that sixty day mark. So it's just making the client aware of what's going on. And that's probably the biggest one on that side of it. The other thing is I have clients who are like, well, if I want the cost to go if I'm looking for ways to bring down my cost, well, if you own the properties outright or you've got equity in them, I don't have to insure at 100% to value.
Todd:Because the policies we're talking about, if you've got more than five properties on the carriers that will write the single policy with multiple homes, it's commercial. It's a commercial policy in certain aspects. So in the commercial world, you can insure at 80% to value. So if I have a $400,000 home, I can insure that at $3.20. $3.20.
Todd:Well, insurance on $3.20 is less than 400. Granted, if the whole home was 100% loss, I'm only going to get $3.20 out of it because that's what they're going to pay. But the odds that there's not going to be something less of the home, even if the whole thing burns, you're still going to have the frame. You've the pad. You've still got depending on what the damage is to it, we're not having to put back 100% of that.
Todd:But I'm not going to tell you it can't happen. But the reality is it's probably not going to be 100% loss.
Dennis:Well, here's something that you may or may not remember. In most of the cities around, at least DFW Mhmm. If you have 5051% damage to a home, the fire chief or whoever it is Mhmm. Can say, no. We gotta tear it down and rebuild it.
Todd:Right.
Dennis:So so I think that would be something that But the the fact of the matter is it could it would still be classified as a total loss. Yeah. Right?
Todd:And it's it's I mean, it's risk it's risk mitigation from the client. If they're like, okay. I'll I'll take that risk because it may save me another if I've got seven, eight, 10 properties, and it saves me another 10,000 in premium to bring that down to 80%. Mhmm. But that gives me enough cash flow to go out and buy two more properties.
Dennis:Yeah. We're gonna be I wanted to talk about that. Yeah. So the idea of saving money, especially for folks that are trying to scale Mhmm. Whether they've got five and trying to get to 10 is we know I think you talked to a guy today, and you mentioned I'd ask you, did you mention to him about ratios and stuff like that?
Dennis:I And forgot what the answer was because I was dealing with, you know, all the stuff I've been dealing with. But but in order to get loans, sometimes they have to hit certain ratios, income to expenses or things like that. Well, now if they drop their premium, if they ever lower their premium, even more and maybe get lucky within this particular case, with this one program we're talking about, and get better coverage than most that we see, win win. So now they save a $100 per home Right. A month per they save a $100 per month per home.
Dennis:That's $1,200 per home per year, and they've got six homes. That's $7,200, that could change the ratio enough for them to qualify for the that next home to get it into some sort of loan. And because our understanding of how this market works is these investors aren't looking to make money off of the home right now. They're looking just to make sure it pays for itself. They're gonna make their money when the home sells.
Dennis:Right?
Todd:I mean, they may wanna hopefully take money away from it every month so they're saving so that they can pay for future repairs or what have you. But like the lady that I just got through finishing with, she was $712 a year. I'm like, that's a half of a roof every year. That's an air conditioner for each I mean, for her, it was enough money. It's like, okay, now I've got a windfall over here if I want to start doing some other things to the properties or just sock it away that it becomes a big number.
Todd:Maybe it was only $100 $150 per property. But when you start taking that time, just seven properties times twelve months, yes. It start it became a much Per month. Yeah.
Stephanie:I think a lot of people would kill to save $150 per month Yeah.
Todd:Well on
Stephanie:anything. Right?
Todd:Well, and to me, the bigger thing is if you're trying to keep your clients in there or your customer, your renter, if you don't have to go back and raise rents every year because, wow, there was a big enough Okay, dollars 150 a month on insurance for that one property. If you keep them in there and they don't have to go someplace else, one, now you're not having to go back in, get it cleaned up, get it ready to rent again. You're keeping that customer in there another year. So there's I mean, to me, it's a win win. I mean, I talked to some of our customers that are renters.
Todd:And I'm like, might be worth you putting my name out to your landlord because if I can help save them from having to come back and raise your rents. I mean, the only reason that landlords are raising rents are because, okay, my taxes, my insurance, my HOA fees, they're going up. Yep. You know? Yeah.
Todd:And so if you can help curb some of that. So
Dennis:Yeah. I mean, it's helpful. It's it's a great program that we have. We have multiple programs like this, but one particular that he's talking about has been very kind to investors. And so but we do have two other ones that do some similar stuff.
Dennis:They just don't have quite as many bells and whistles, but for some clients, they're a better fit. The thing is we just have to look and see what you have. We've got to wrap it up, but we appreciate you coming in and and talking about this. And so if anybody out there has investment homes and are looking to scale, we would love to give you a call. You can give us a call at 833505 quote.
Dennis:That's like 7868, something like that, quote. 83833505, or you can email us at contact@igwpodcast.com. Contact@igwpodcast.com. We'd love to talk with you, see if there's anything that we might be able to help with if you're an investor. And we are in a number of different states.
Dennis:And so if you have stuff spread out, it's something we can also look at. Anyway, we appreciate it, and we'll talk to you again.