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Ways to Save With Your Deductible

I recently went to go see “The Greatest Showman,” as one who is often found singing or whistling show tunes, I loved it. But the sound track is probably better than the Movie. A great mix of music with strong beats and base lines and violins coupled with distorted guitar, and great melodies. Followed by hopefully ballads. Anyway, there is a song that talks about the long-lasting idiom, “Walking a Tight Rope.” What does this have to do with Saving money on your insurance? Anymore Insurance companies know about your home or auto by running reports. They know if you have had losses, they know when your home was built, what materials, the size, etc., etc., etc. They know. So, there isn’t a lot of wiggle room on a lot. But there is when it comes to deductibles, but it’s a tight rope walk.

When you have a covered claim the insurance company will pay the amount of the loss, less the deductible.

So for example, if you have a $1,000 deductible on your auto, and have a fender bender that costs $2,000 to repair the insurance company will pay $1,000, it is your responsibility to pay the rest of the amount due to the auto repair shop.

On a home if you have $1,000 deductible, and a hail loss that requires you to replace your roof, if the cost is $10,000 to replace the roof, then you would be paid $9,000 and you would be responsible for paying the contractor the other $1,000.

So how is this a type rope? There is a inverse relationship between the cost of your insurance policy and your deductible. The higher the deductible the lower your rates. The lower your deductible the higher your rates.

So how is this a tight rope? Well, on one hand if you have a BIG loss you won’t want to be coming out of pocket to pay a large amount of the claim. On the other hand, if you have a small loss will you actually turn it into the company? Think about it, if it’s a $1,500 loss and you have a $1,000 deductible. The additional $500 dollars you get from the insurance company will cost you dearly once you lose your claims free discount. So what should your deductible be? That depends? Do you have cash on hand usually? Do you have the ability to cover small losses yourself? If so, then the answer is higher.

Once quick example to close. I recently helped a real estate investor get an insurance policy on a Manufactured Home he had purchased as a rental. As an investor he has cash on hand on a regular basis, and he knew the only time they would ever report a claim is if it was BIG. So we looked at the deductible. At a $1,000 deductible the rate was $1080 annually for this manufactured home. With a $2,500 deductible the rate was $817. With a $5,000 deductible the rate was $349. Wow! A 70% discount because of the deductible. Now he knows if there’s a loss he is probably covering it, but what he is most concerned about is a catastrophe, so he decided to go with a high deductible. But now you see, choosing your deductible is like walking a tight rope.

For questions on how to save money on your insurance policy, contact Gila Insurance Group. We’ll review your current policy or provide an insurance quote.

Umbrella Liability Insurance for Landlords

Do you have enough liability insurance? Probably not. But how much is enough? Unfortunately that question varies. First, what does liability insurance do? Liability insurance does two things: (1.) it pays for losses for which you become legally liable for as a result of a lawsuit and (2.) it pays to defend you in the event of a lawsuit.

So what can you become legally liable for? As a real estate investor you have some unique exposures. You have tenants, and, let’s face it, they probably don’t love you. Not because you’re a bad person, but because you represent a bill, and maybe a past due bill. You’re the proverbial “man” they are trying to stick it to. So you need to protect yourself, your assets, your business.

“It won’t happen to me.” Try this. Google how to sue your landlord and feast your eyes on the three million, yes, three million results.

The bottom-line is that if you get sued and are found liable you will be required to pay the judgment. How? That depends. If you have insurance, that would be first, then it goes to your assets, including cash, stocks, bonds, REAL ESTATE. Yes, you selling that investment property might do real well to pay off your judgment, and you’re out the asset and the cash flow. Beyond that, your wages from your J-O-B can be garnished. Liability is a serious thing.

Liability insurance isn’t expensive, it’s actually quite reasonable. So max out the limits on your policy, the marginal difference will be dollars. Then, consider an umbrella policy. An umbrella policy is a liability-only policy with some unique features which are pretty cool, but the important part is that it kicks in when you get sued for limits that are higher than a home insurance policy. For the limits you get, it is amazingly affordable. And if you have several investment properties you may have several million in real estate. Protect your investment(s) by making sure you have enough liability insurance!

Get covered today with an umbrella policy today! Start your quote immediately, but have what you need on hand!

The Liability of Not Responding to Tenants Quickly

STORIES FROM AN INSURANCE LAWYER PART 3

Protect yourself from a lawsuit in Safford, AZHave you ever had a tenant ask you to fix something one, twice? What about three times. Consider this story. Landlord, purchases rental property with older windows. Single pane, not super-efficient, but who want to replace the windows in your rental right away, right? Anyway, tenant complains to landlord, asking for double pane windows. This happens a couple of times. No action by the landlord. Now, we can argue whether or not this action is required of the landlord in any case, but it’s not material to the story. Tenant and her boyfriend are otherwise occupied. The tenant’s child, is playing by a two story window. Kid falls out of the window. Now, as I understand the story, Kid was okay, BUT the landlord gets sued. What? Yeah, it was a stretch, but the landlord got sued.

Basically, the tenant claimed that if the windows had been replaced then the child would not have fallen out of the window. Yeah, I am not sure how the new window somehow watches the kid and makes sure no one falls out the window, but I haven’t seen that model at my local Home Depot, but I digress. The suit went to court. In this case the Landlord won the case, and was not found negligent, BUT it begs two questions.

  1. Are you responding to your tenant’s request? The reason the case had any standing to begin with is that the tenant had made multiple requests that the windows be replaced.
  2. Defense costs, again a huge benefit of your insurance policy.

So, keep your property well-kept respond to these tenant requests, and be sure to purchase enough liability coverage. Start your landlord insurance quote online right now!

Does Your Landlord Policy Cover Personal Injury

Landlord Insurance Safford, AZLandlord gets sued for a dog bite. For dog bite lessons please see “Why you should require your tenants to purchase renters insurance.” Landlord gets ticked at the lawsuit and the prospect of his insurance rates go up, squeezing his cash flow. Consequently, landlords decides to do a little investigative work. Simply because he believes the kid’s parents wanted him to fake the injury, and so the pain and suffering stuff would be hogwash. So, he has the kid followed, and gets sued.

Under what? Invasion of privacy. Question is, is that covered under your policy? The answer is that it depends. There are some companies that will offer personal injury coverage and there are others that don’t. On landlord policies the answer is probably not. Wait, what’s Personal injury? Personal injury is a broad term that covers several things. Most of them mental injury that we could cause to others. For example, defamation, libel, slander, false arrest or imprisonment, malicious prosecution, or invasion of privacy. Now you would never do anything like those types of things, right? Have you ever spoken negatively about a tenant? Have you ever bent the rules on your rights of a home inspection? Have you ever driven by just to see “what’s going on?” You get my point. It’s a fine line, and your tenant views you has the “rich landlord,” and there are plenty willing to take advantage of an opportunity. Not to defame any of your tenants, but you have probably had a tenant like that.

So, what can you do. Well, first off be aware, you might be just driving by, but the tenant might see that as a stifling landlord, or a weirdo, or you name it. Second, be sure you are covered. Not all insurance policies are the same. Do you have the coverage you need? Many landlord insurance policies specifically exclude personal injury liability, and I have yet to see a policy that automatically included an endorsement or “rider” that adds it automatically. In fact, it may simply not be available, in which case you would need to have a different risk management plan. Such as, stick to the lease in terms of inspections, don’t have your tenants followed, etc. That said, the question remains, what kind of coverage do you have? Take away? Contact your agent about personal injury coverage.

Insurance Bundling for Investors

If you turn the TV on for 2 seconds you will hear all about you can bundle and save on insurance, and that is a great way to save. For investors this can also be true. Imagine having multiple investment properties on one insurance policy, with one renewal date, one payment. We have several options that can make this a reality.

The first is called the 10+ program. If you have more than 10 properties, we can put all your properties on one commercial policy that makes life easy. This program can include single family homes, apartment units with up to 6 dwellings, condos and manufactured home policies all in one place. You can even have a vacant home or two if they plan to be filled.

The second is a program that can have as few as 1 unit, but as many as you have. This program is a little different than the 10+, and is a great option for investors that are flipping houses on a regular basis.

These programs allow us to save you money and get you great coverage, but almost as important it allows you to simplify your insurance. It’s these programs that allow us to become more than your insurance agent, but a member of your team.

Have questions about your current coverage? Contact us or request a quote on our website.

Rental Property Insurance Checklist

THE MUST-HAVE CONVERSATIONS WITH YOUR INSURANCE AGENT!

RENTAL PROPERTY INSURANCE –

PROPETY COVERAGE

Proper Investment Valuation: __________
The Coverage Form – DP3- What’s Covered: __________
Loss Settlement Option for Home: __________
Deductible: __________
Water Backup of Sewer or Drains Coverage: __________
Earthquake: __________
Flood: __________
Building Code Upgrade Coverage (Ordinance and Law): __________

OTHER STRUCTURES

Value of Other Structures (Garages, Fences, and other structures): __________

LANDLORD FURNISHINGS

Value of landlord contents (Appliances, Furnishing) __________
Loss Settlement Option for Property __________

LOSS OF USE/LOSS OF RENTAL INCOME COVERAGE

 __________

RENTAL PROPERTY INSURANCE-

LIABILITY COVERAGE

Liability Insurance sufficient to cover your assets: __________
Premise Liability: __________
Personal Injury Coverage: __________
Medical Payments: __________
Umbrella: __________
Loss Assessment: __________

ANNUAL PREMIUM

 __________

Why we use a Rental Property Insurance Checklist

Insurance can be mystifying. Many people have described it as a completely different language. Insurance is really just a complicated legal contract between you and the insurance company. The insurance company is bound to respond per the contractual terms, but because it is explained in legal terms it really is a different language, which is why many people fail to even put for the effort in understanding their insurance policy. While it is true that insurance policies are complicated, we at Gila Insurance believe there are some core things that every customer should understand, which is why we have created this checklist.

This checklist is designed to help you have the conversations with your insurance agent that will allow you to know what is covered BEFORE you have a claim. No checklist is fully comprehensive, these are things we believe are important that you understand, but please read your policy to ensure there are other questions that you have. The best time to understand your policy is BEFORE YOU HAVE A CLAIM.

If you are shopping for landlord insurance start your quote now, and let us quote several companies for you or check out some of our other landlord specific content.

Gila Insurance Group LLC specializes in insuring rental properties, Fix & Flips, Manufactured Homes, and Vacation Rentals, if this is what you do, give us a shot and get a quote today!

Rental Home Insurance Coverage Simplified

Insurance is complicated but understandable if broken down into small portions. That’s what we try to do. It’s rental home insurance coverage simplified, really!

RENTAL HOME INSURANCE COVERAGE SIMPLIFIED… REALLY

Let’s be real about the insurance purchasing process for investors. You know you need it or more likely your lender requires it, so you buy it. You work through the process with an agent that asks way too many questions, half of which you’re not sure of (you just bought the property, you don’t know when the roof was replaced, or plumbing and electrical was updated), you muddle through only to get a big stack of papers which you may or may not intend on reading, but is seemingly complicated and convoluted. Look, what I am about to write doesn’t apply to every policy. The best way to know what is insured is to read your policy. This doesn’t replace that, but hopefully, it can demystify things and make your insurance policy understandable.

While there are MANY parts to a policy, there are only two sections. Hopefully, we can break it down into understandable bite-sized pieces, and not bore you to death in the process. I hope it’s not too late for some of you. I know some are visual learners, so let me break down a policy visually.

Rental Home Insurance in Safford, AZ

That’s it… kind of… two sections; 6 coverage parts, plus a bunch of extras. For example, there’s the declarations page, the insuring agreement, definitions, perils insured against, exclusions, and conditions… for both sections. Simple right? RIGHT! Baby steps. If you can understand this diagram, you are well on your way to understanding the coverage that you have.

To get an incredible quote these coverage sections start our online quote form. To talk to a licensed agent about this coverage call us at 1-877-784-6787.

This coverage explanation is for illustration purposes only and is general in nature. Coverage explained here may not apply to your policy, State, company, or situation. For more information about how your policy would respond in the event of a loss, please refer to the terms and conditions and declarations page of your policy.

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Understanding Debris Removal

Debris Removal Insurance Coverage in Safford, AZSome coverage is hard to explain, it’s much easier to just say see! That is exactly the case with debris removal. Debris removal isn’t difficult to explain, it’s just the cost to remove the pile of trash your insurance claim just left. If there is a fire, it’s going to be the ashes and rubble, but also the mess the fire department caused while putting it out. Let’s be real they are great a putting out fires, but they aren’t exactly tidy. If there is a flood, we might be looking at all the damaged drywall and installation. Some of it might be moldy or muddy. The point is there is a cost to haul it away. But there is also going to be a cost for the demolition, which can get pretty costly.

Recently near my office there have been two fires. The first was in a second level apartment. The second was in a single-family home rented to a young couple. It was on one of my many strategy walks that I decided to explain debris removal through picture.

Debris removal is usually included in most property insurance policies, but like most things with an insurance policy there are limits. Depending on where it is commercial insurance or a homeowner’s policy it can vary, but here are some things to consider when it comes to debris removal.  How unique is your building? How old is your building? How much space is around your building. All of these and more can cause additional costs in removing debris from your property. Another consideration is building materials. Is there any asbestos in the building? The cost of asbestos disposal adds additional cost to debris removal.

As is not unusual, insurance policies provide coverage for a number of different situations that you probably hadn’t even considered. While we may often complain about insurance the truth is that the benefits provided by our insurance policies are amazing.

Why You Should Require Your Tenants to Have Renters Insurance

Renters Insurance Safford, AZDo you require your tenants to carry renters insurance? If not, you should. Why? Because it matters. I have a cousin that is a defense lawyer for a large insurance company. He defends them for liability cases. He has seen ALL sorts of crazy situations, and has a way of telling the story. The other day, he was explaining a situation that caught my attention. Landlords rents to a family. Tenants have a dog that would “never bite anyone.” Dog bites a kid. Takes a chunk out of his calf. The landlord was smart, and required his tenants to carry renters insurance. The limits the renters had weren’t high, but the hospital bill was covered. Good for the landlord, right? Wrong. Landlord also gets sued. Why, because while the hospital bills were covered there was some pain and suffering that wasn’t. So, naturally it would be the landlord’s responsibility for having allowed such a vicious dog to be on the premise. The verdict in this case was still pending when I spoke with him. But the outcome is irrelevant. He was their defending the insured, which brings up 3 things we can learn.

  1. The Defense costs provided by your landlord insurance policy are extremely important, without it, this poor landlord would have been footing the bill for this case.
  2. It would appear this landlord would have been on the hook whether or not the tenant had insurance, but because the tenant had insurance, the loss to the landlord was less that what it could have otherwise been.
  3. Ask about them, screen them, maybe don’t rent to people with them, and if you do, please remember Inspector Clouseau (https://www.youtube.com/watch?v=Kg0CQKQWLJI). Simply asking if their dog bites, may not be sufficient. If you do rent to people with dogs remember there are certain dog breeds that should be excluded in all cases. These include Pit Bulls, Rottweilers, Dobermans, Chows, Akitas, and other aggressive breeds. Yes, theirs might be the gentlest dog ever, but statistics show the bad liability claims are related to these types of breeds. Insurance companies don’t want to take the chance, and neither should you.

For a quote on renters insurance, contact us today.