Podcast: Insurance For Homeowners and Real Estate Investors

Insurance For Homeowners and Real Estate Investors

For this podcast about insurance I chatted with Matt Kincaid of Meridian Captone.  In the podcast we discussed insurance for homeowners and real estate investors.  Topics included first time homebuyer tips for arranging insurance, insurance for real estate investors with long term tenants and insurance for investors working in the short term rental space.

I hope you enjoy the podcast and find it informative.  Please consider sharing with those who also may benefit.

Listen via YouTube:

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You can connect with Matt at LinkedIn,  You can reach out to Matt for more information on their insurance products by emailing him at mkincaid@meridiancapstone.com.

You can connect with me on Facebook, Pinterest, Twitter, LinkedIn, YouTube and Instagram.

About the author: The above article “Podcast: Insurance For Homeowners and Real Estate Investors” was provided by Luxury Real Estate Specialist Paul Sian. Paul can be reached at paul@CinciNKYRealEstate.com or by phone at 513-560-8002. If you’re thinking of selling or buying your investment or commercial business property I would love to share my marketing knowledge and expertise to help you.  Contact me today!

I work in the following Greater Cincinnati, OH and Northern KY areas: Alexandria, Amberly, Amelia, Anderson Township, Cincinnati, Batavia, Blue Ash, Covington, Edgewood, Florence, Fort Mitchell, Fort Thomas, Hebron, Hyde Park, Indian Hill, Kenwood, Madeira, Mariemont, Milford, Montgomery, Mt. Washington, Newport, Newtown, Norwood, Taylor Mill, Terrace Park, Union Township, and Villa Hills.

Transcript

[RealCincy.com Insurance Podcast]

[Beginning of Recorded Material]

Paul S.:             Hello everybody, this is Paul Sian with United real estate home connections. Real estate agent licensed in the state of Ohio and Kentucky. And with me today is Matt Kincaid with Meridian. Hi Matt, how are you doing today?

Matt K.:            I’m doing great, Paul, thanks for having me.

Paul S.:             Great to have you on here, and looking forward to our podcast today. Where we’re going to discuss insurance for homeowners, for investors as well as looking in-depth into the insurance policies and how that’ll help out buyers and investors, so why don’t you tell us a little bit about your background? When did you get started in insurance?

Matt K.:            Yes. It really started in junior/senior year of college. I went to NKU, graduated in 2015. My best friend actually dropped out of school and started selling commercial trucking insurance to long-distance truckers. So he thought it might be a good part-time job for me to do, do some customer service work.

So that’s what I did my senior year mostly. And picked up on it pretty quickly, and after I graduated, I started selling full-time, and it just happened to be when I stuck with. Ended up transitioning to more personal lines. So I still do a lot of commercials, but our main focus is personal. So we’re typical home auto landlord insurance that sort of thing, so that’s kind of how I got started.

Paul S.:             Great. And you’ve been with Meridian ever since?

Matt K.:            Yes. I’ve been with Meridian. It’ll be four years in September; I’ve been in the industry for about six years now.

Paul S.:             Nice. So I understand a lot of people don’t know that you’ve got your insurance brokers, which I believe Meridian is an insurance broker, and then you got your insurance agents. Can you explain a little bit the difference between an insurance broker and an insurance agent?

Matt K.:            Yes. So in the insurance world, there’s independence and captives; captives are just what it sounds are captive to one product, one company. Whereas with independence Meridian particular, we have about 15 different companies that we’re able to shop around through. So one of our companies is, for example, is Allstate. A lot of captives also have Allstate, but we have the same exact product.

But we also have 12 other companies that we can shop around through, to make sure that you’re getting the best. So it’ll really benefit to the customer and me as an agent, or I’m not if I was just one company, I know I have to stand behind that product 100% no matter what. Whereas being a Meridian, I can just do whatever is best for the customer.

Paul S.:             Yes. So the ideal then I guess is that you can shop around from multiple policies. Just like going into the store, you can compare different types of bread, and whatever price works best for you, whatever flavor works best for you. That’s similar to what you’re able to provide.

Matt K.:            Yes, that’ll be a good example. For like your typical, this may not be what we’re talking about but, but for like your home and auto, most of time, it’s best to be with one company, but not all the time. So I’m able to mix and match if need be, whatever is going to save the customer most money, whatever they’re company is having.

Paul S.:             Great. So let’s move on to first-time homebuyers. Insurance is a, especially for homeowners, insurance is the new thing for first-time homebuyers if they don’t really know what they’re looking for. When’s a good time for them to start having that conversation with their insurance person?

Matt K.:            So I think whenever you get in contract is a good time to start looking. Getting a quote is never going to hurt, you’re not bound to any coverage, or you’re not going to be paying. 90% of time, you’re not going to be paying the full 12 months up front.

So it’s good to start getting your quotes shops around, getting some final numbers to give to your lender if you have one. So they can finalize numbers and give you a good picture of what you might be looking at going forward. So it’s never too early in my opinion, but once you get into contract, I think is an ideal time.

Paul S.:             Yes. That’s something I agree with too. And it should be pointed out for those first-time homebuyers who don’t know, I mean insurance is required if they’re financing the purchase, and the lender is going to require homeowners insurance.

Matt K.:            Yes. A lot of people know that it’s not a law that have home insurance, but the lender can make that stipulation that you have to have it upon closing.

Paul S.:             Great. And when a homebuyer first time, whether homebuyer existing or first-time homebuyer. What exactly is the insurance company looking at when they’re pricing out policies?

Matt K.:            So a big one is, you’ll hear this term going out a lot, insurance score. It’s a credit-based score; you don’t need a social to run it. But they’re able to calculate a similar score based on the amount of claims you’re turning in, your payments.

Are you making your payments on time? That sort of thing. So they’re able to get a good a good picture of the type of risk that the insurance company is taking on so that I mean if you’re looking at the property itself, the construction of the property, how old it is, the exterior that sort of thing.

Paul S.:             So does that involve a hard credit pool or a soft credit pool?

Matt K.:            It’s soft; you won’t see it on your credit at all.

Paul S.:             Okay, great. So that’s something that doesn’t have, even though during the home shopping process there’s going to be a bunch of credit pools, whether from a couple of lenders. But insurance it’s not one of those things that the buyers have to look at.

Matt K.:            No, absolutely not. Especially, that would be a big pain. Especially if I’m shopping through 15, and I’m running NVR and insurance score. But no, it won’t even show up on your score.

Paul S.:             Okay. So what are some of the best ways that homebuyers can improve their chance of getting a better insurance rate?

Matt K.:            Right. So prior insurance history is a big one, making your insurance payments on time. The area that you are in is going to be a big factor. The zip code, there’s different what’s called protection classes based on where the home is. So that’s based on how far you are from the fire hydrant, and also how far you are from the fire department.

So the highest protection class you can have is ten, that’s a maximum risk. You’re over five miles away from the nearest fire department, and your insurance rate is going to be higher. Simply do the fact if there was a fire or total catastrophe, it’s going to take longer for them to reach you.

Paul S.:             Okay. Let’s talk about the risk; you mentioned risk in there. How does risk play into it? Let’s say whether of the buyer themselves and if they’ve had past history of claims or the house even if they’ve never been in the house before what about the risk associated with that.

Paul S.:             Yes. So like I said before pass to insurance, history is big. With these landlord policies, it’s hard to tell what the price is exactly going to be. Because obviously, they’re going to rate it based off the buyer’s insurance score.

But they don’t know who’s going to be living in there. They don’t know the type of risk for who’s going to occupy that home. So it’s very limited; there’s more of a baseline price just based off the buyer’s insurance score and the protection class and the age and the property itself.

Paul S.:             Okay. In terms of the property itself, there’s a CLUE report which a lot of buyers probably have not heard about. Can you explain what the clue report is, what does it stand for, and what does that exactly provide?

Matt K.:            Yes. So I kind of describe it as a moto vehicle report for your home.  So it stands for the comprehensive loss underwriting exchange. So a lot of times, LexisNexis, you’ll get your reports from there. It’s just a big aggregate of claims that are turned in by insurers, and obviously, when I’m running your clue report, it’s going to pull up based off your name, your date of birth and the address if there are any claims that correspond to you, the insurance company can grade it importantly.

Paul S.:             Okay, great. Is there any cost for you pulling a clue report for a buyer?

Matt K.:            No, absolutely not. So for a personal policy, so if we’re talking landlord, that’s four units, four family and under. Most of the times, the company can run that itself. If it’s a commercial policy, it’s a little bit more different.

For example, if this is not a new purchase, maybe you’ve had this property for a few years, and you’re shopping right around, you may have to order that from your prior insurance company. But if it’s a new purchase, a lot of times it’s not going to be necessary, if it’s a commercial risk.

Paul S.:             Okay. Let’s talk about a homeowner who’s been in their house for a few years now, and they had a policy in place with an insurer. Do you have any recommendations or suggestions for them? I mean, do the rates get better? Do the rates get higher if they get another quote?

Matt K.:            So it’s kind of a cache one to it. It’s almost impossible to know what the insurance company is going to do. Obviously, you want to find a company that is A-rated or higher, that means they have a good financial stability, so they’re not just going to raise your rates for no reason.

But insurance is kind of like the stock market in some ways. If a company is taking big losses a certain year, they may try to recoup by raising rates, and that’s just going to be across the board based on your zip code. But I always just say just keep track of your rates. I know Meridian we have somebody who’s dedicated to be shopping if your policy goes up a certain percentage. So I think that’s great to have. But just pay attention to it, and re-shop it every couple of years if need be.

Paul S.:             Okay. By the fact of them, somebody re-shopping it, that’s not necessarily going to increase their rates, will it?

Matt K.:            No, absolutely not. Companies like to see that you’ve been insured, they don’t want to see you bounce around all the time, because that means they’re probably going to lose that risk in a year. But to answer your question, there’s no harm in re-shopping. I have customers that will call me each and every year to make sure that we have the best rate, that’s totally fine by me.

Paul S.:             Okay, that’s great and helpful information. To move on to investment real estate, can you talk about the differences in commercial versus residential investment real estate insurance?

Matt K.:            Yes, so kind of hard to describe the four. Commercial is going to be the five units and above, personal is going to be four and under. Coverages on that, the only differences that you’re going to see with commercial, instead of having a one hundred thousand or three hundred thousand liability limit, most of the time they’re going to include a general liability policy, which is going to include one million in liability.

A bunch of different other things that fall under that, so that might look different. Other than that, the forms are fairly similar. You just want to make sure that you have replacement cost, or if you want actual cash value, deductible, loss of rent. So those things are going to be similar, it’s just a matter of how many years you have, that sort of thing.

Paul S.:             Okay. In terms of investors who are owner occupying, they’re buying a duplex or four-unit, and they want to live in one unit. Are the insurance rates generally better for that type of situation?

Matt K.:            There’s not a clear answer for that, I mean it’s still going to be written on the same type of form. There might be some discounts being that the insurance company is able to calculate their risk, maybe a little bit more accurately. I mean, that could be a good thing or a bad thing for the customer.

But really, you just want to make sure that you’re asking those questions, make sure the agent is writing the policy correctly. So down the road, if there are any changes or let’s say the insurance company audits you and that information is inaccurate, that could then raise your rate.

Paul S.:             Okay. So I guess the answer is it depends?

Matt K.:            Yes. With a lot of insurance, it just depends, unfortunately.

Paul S.:             That’s still good to know. So let’s talk a little bit about insurance riders, I guess insurance riders applies both to regular homeowners as well as investors. What can you tell me? I guess first, let’s explain what’s an insurance rider, and why would somebody want one or need one.

Matt K.:            Yes. So with any insurance policy, there’s going to be a lot of things that are automatically included. Like if we’re talking landlord policy wind, hail, fire, that sort of thing. And then if you want to have personal property protection, let’s say you’re furnishing some of the items may be the appliances in the home can have that. Otherwise, the writers are going to look fairly similar to what you’re going to see on a typical homeowner’s insurance policy.

Or do you want water and sewage backup? Do you want replacement cost on your belongings or the roof? So those are going to look fairly similar. If the agent is asking the right questions and going over it thoroughly, there should be no question on how you want it covered. Some other things that might be on there is earthquake that’s not included; flood insurance it’s a totally separate policy, so there’s always that misconception that flood is included in the homeowners; it’s never included.

Whether it’s a landlord policy or homeowner’s policy, the way to differentiate that with water coverage is where the water is originating from. If the water originated from outside the house, that is flood. If the water is originating from inside, let’s say you have a pipe that burst, or a toilet that overflows or some pump that’s water inside the house and that’s something that could be covered either automatically or with a rider.

Paul S.:             Okay. And just look a little further into flood insurance that applies to both regular buyers and investors, but that’s also like you said this based on external factors close to a river, close to the lake. Where would somebody find out if their property falls under that, or requires flood insurance?

Matt K.:            So a lot of the times, the lender may have an idea if it’s required or not. Otherwise, just asking your insurance agent. There’s not like an automatic identification that is going to tell you. In the loan process, it will probably come up that flood insurance is required, and then at that point, the insurance agent can find out what flood zone you’re in, what kind of rate impact that’s going to have on you, and that sort of thing.

Paul S.:             And then flood insurance too is not something you provide directly, I believe that’s provided from the government, correct?

Matt K.:            Yes. So it’s a FEMA based product, but we do also have a private flood company if your loan accepts that, which can be up to 40% off of a FEMA back product, and it’s the same exact coverage.

Paul S.:             Okay. So let’s talk a little bit more about the private insurance coverage you said for flood insurance, as opposed to FEMA. That’s something you said the lender would have to allow it. Otherwise, they have to go through the government program?

Matt K.:            Yes. So I mean the laws are changing for this all the time, most of the time if it’s a Government loan, they’re not going to allow private flood insurance. But that could depend on a bunch of different factors.

So the best thing to do is just ask your lender if private flood is acceptable because if it is, that’s going to save you a ton of money. I just did one a couple of weeks ago, where FEMA wanted 1,500 bucks, and my private flood carrier came back at like 700. So that could be a big difference, especially if you have a certain down payment you need to make for the home, and just cut cost in general.

Paul S.:             That’s 1500 versus 700 is that a yearly cost?

Matt K.:            Yes, flood is always going to be a 12-month policy, just like your homeowners.

Paul S.:             Okay. Is it worth it? Let’s say somebody’s not listed as a; the property is not listed in flood zone, so they don’t require flood insurance. Is it worth it for them to maybe they happen to live behind a, there’s a small lake behind them? Is it worth it to get flood insurance for them?

Matt K.:            I think it’s at least worth having that conversation, you know everybody’s different. You know there are some customers they’re going to want all the bells and whistles, they are going to want earthquake even if you’re not even close to a fault, that sort of thing.

So it’s just having that conversation, I mean you can never be too covered. It’s never a bad idea to cover all your paces, but it’s just a matter of what the insured is willing to spend, and if they think it’s worth taking that risk or not.

Paul S.:             Okay. Most of the insurance policies we’re talking about, and I shouldn’t say most, I should say all the policies we’re talking about right now are generally applied to like long term whether you as a long term owner-occupant or as a long term investment property, where you have a one continuous tenant may be staying a year after a year or long-term leases basically.

Let’s talk a little bit about short term tenants like your Airbnb, your VRBO, I mean, are there different insurance requirements for that, different insurance policies? What would you recommend? And what have you seen for other people who are looking for that type of insurance?

Matt K.:            Yes. So honestly, I’ve ran across it a few times. The one thing you want to make sure of is most companies will either not write it, or they’ll have an endorsement done for a short-term rental. So that’s going to be a surcharge for you. Other than that, it’s going to be fairly similar. You just want to make sure if you’re going through air Airbnb or VRBO make sure what they are going to cover.

They’re going to include an insurance policy, so you don’t want to have any overlaps, we also don’t want to have any gaps in the insurance. I know Airbnb will, for example, not cover bodily injury or property damage, so that’s something that’s going to fall under your insurance policy. So it’s just making sure that you understand the verbiage. So if you do have an Airbnb home that you want to get insured, take a look at that policy, send it to your insurance agent. Have them write over it, and make sure that you’re fully covered.

Paul S.:             Okay. That’s something that you’d provide if somebody’s coming to look for a policy through you for a short term rental that you would be able to assist them with too?

Matt K.:            Yes, absolutely. I did one last week; the customer was very concerned about the pricing. He was coming from USAA; they wanted like 2,500 bucks on the year for a single-family Airbnb.

I have a great company called Berkshire Hathaway; they have a product specifically for Airbnb or VRBO. I was able to cut his price almost in half. So we definitely have products for it; off the top of my head I probably have three or four that I can quote through.

Paul S.:             Okay, great. And just to go back to your company’s footprint, Meridian, basically, are you able to offer insurance all 50 states? Are you limited anywhere?

Matt K.:            So yes, we’re not available in all 50 states, but we are available in the Tri-State as well as Tennessee, Illinois, a lot of the southeast. So if you have any questions about that, please give me a call.

That being said, I have a lot of property investors that are coming from either across the country or overseas. That is totally fine, as long as the property that they’re buying is within our scope, we can definitely accommodate.

Paul S.:             Okay, great. And what’s the best way for somebody to reach out to you if they want to get some more information?

Matt K.:            So you can reach me either by phone or email. I’m also very active on Facebook. My phone number is 513-503-1817. Or you can reach me by email that is MKincaid@Meridiancapstone.com.

Paul S.:             Okay, great. That’s all the questions I have for you today, Matt, thanks for being on.

Matt K.:            Yes, thanks for having me.

[End of Recorded Material]

Source: cincinkyrealestate.com

7 Ways Coupons Waste Your Money and Time

Woman with a basket of groceries giving thumbs down
Photo by Krakenimages.com / Shutterstock.com

Clipping coupons is synonymous with saving money. Just mentioning frugal living brings to mind long hours hunched over the dining room table shredding the Sunday newspaper into a mound of money-saving coupons.

But why? What’s so great about coupons?

It may sound blasphemous to some budgeters, but I gave up coupons years ago. Spoiler alert: I still save a respectable amount on groceries, I’m eating healthier, and shopping is a breeze.

Here are the reasons why I hung up my scissors and quit clipping coupons.

1. The cost/reward ratio is low

In exchange for the modest savings it offers, traditional coupon clipping is a demanding taskmaster.

By the time I buy a newspaper, clip the coupons I want, organize them, monitor the expiration dates and find stores that allow coupon stacking, it seems like I should just get the item for free.

2. Coupons are manipulative

It’s no secret manufacturers and retailers want us to use coupons for one reason only: to expose us to products we wouldn’t normally buy, encouraging habitual purchases. Once the savings go away, they expect that demand will stay and the price can gradually increase.

For me, staying on budget means minimizing my wants and needs and shopping with greater intention. Most coupons are distractions that wrap new wants in a package of “savings.”

If I really want to check out coupon options, your time might be better spent accessing manufacturer coupons online.

3. Coupons distract us from better deals

Saving money shouldn’t be an obstacle course. It’s easier and more rewarding to simply stick to store brands, learn which generic products to buy or wait for in-store sales.

Store brands often offer better deals than coupons — without the hassle. Without the overhead of sexy ad campaigns, package designers and product innovators, generics are typically a much better value.

Compare unit prices, instead. You just might never clip another coupon again.

4. Coupons push pre-packaged and processed food

When it comes to groceries, coupons often market convenience foods that are more expensive and less healthy.

Seriously, though, where are the coupons for fresh foods like broccoli or apples? If they exist, they are as rare as a coupon with no expiration date.

5. Coupons encourage over-buying

To take advantage of the savings, coupons often require the purchase of more than one item — “$1 off any three,” for instance. This may be fine for products you know and love, but it’s risky otherwise.

What if you don’t like the taste of the coffee, the flavor of the chips or the scent of the moisturizer? Instead of being out the cost of a single item, you’re out in multiples. Am I really saving if I have to buy more than I need, want or will use?

6. Coupons build brand loyalty

Part of the purpose of coupons is to establish a pattern of buying behavior and build brand loyalty. In matters of love, loyalty is a virtue. But when it comes to shopping, a little cheating can be a very good thing.

Blindly sticking to one brand of yogurt, pasta sauce or toothpaste means you’re likely missing out on better deals or products you’ll like more.

Brand loyalty may make shopping faster, but the benefits end there.

7. Coupons aren’t free

Don’t think those “free” coupons you get with your grocery receipt come without a cost.

Most are generated as part of elaborate loyalty programs that track dozens of data points like what time of day you shop, how much you spend on average, which in-store services you use and whether you have kids.

In addition to using it themselves, stores may sell your information. In exchange for those discounts, you could be handing over a big slice of your privacy.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

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Good Financial Cents, and author of the personal finance book Soldier of Finance. Jeff is an Iraqi combat veteran and served 9 years in the Army National Guard. His work is regularly featured in Forbes, Business Insider, Inc.com and Entrepreneur.