00:02.42

wongga

Good afternoon investors. My name is pi wong your host would be investing to win podcast today I have the pleasure welcoming Sandy Elders to my studio. She is a commercial account executive with insurance industry sandy how are you.

00:02.42

Sandy

Um, good afternoon masters. My name' is garre wong your host of the investing to win podcasts today I have the pleasure welcoming Sandy Elders to my studio. She is a commercial account executive with the insurance industry sandy how are you hi I'm great. Thank you Garrett! Thank you for having me.

00:20.69

wongga

Absolutely so let's start out with a little bit of background. Why don't you tell the listeners a little bit about yourself and how you got here since for over twenty years I started as I say about twenty years ago

00:22.80

Sandy

Absolutely so let's start out with a little bit of background. Why don't you tell the listeners a little bit about yourself and how you got here? Well I've ah been in the insurance business for over 20 years I started off actually with in pet insurance. Um. But as I say about twenty years ago and then I graduated to commercial insurance about 2 years after that and I've worked with a couple of very large brokerages here in Winnipeg I've always been in Winnipeg and then I settled. Ah.

00:39.95

wongga

And I graduate to do commercial insurance about 2 years after that and I worked with a couple of very large broke purchases here in Winnipeg always within winpake and then inuled at hopefully open 1 which is kept for bael insurance and I work with.

00:54.35

Sandy

A locally owned 1 which is Klkor Bell insurance and I work with actually um, the with the owners of brokerages and discovered early on that my niche was leaning towards real estate properties mostly residential.

01:00.90

wongga

Actually um people with the editors of this discovered early on that niche was the age towards reency properties mostly residential and I made it my goal to learn as much as they could about commercial renttals and.

01:12.77

Sandy

And I made it my goal to learn as much as I could about commercial rentals and I can sorry and um so I've learned that um I've we can start over. Okay sorry but you know what you should be apologizing at all.

01:19.80

wongga

Um, and I learned that we could start over so you know what you shouldn't be apologizing at all. Um, like I said this is it's absolutely fine I'm just going to Mark that.

01:32.72

Sandy

Um, like I said this is it's absolutely fine I'm just gonna Mark that let me um, trying to think your question restart the intro. Why don't you just start off with the background again. So pretend I just said tell me a little bit. Okay, go what's your storing your background and then count to 3 seconds for some little bit of pause.

01:37.40

wongga

Let me, um, trying to think here if I should restart the intro. Why don't you just start off with the background again. So pretend I just said tell me a little bit about yourself. What's your story in your background and then count to 3 seconds for a little bit of pause and then go.

01:50.37

Sandy

Go. Okay I started off in pet insurance actually about twenty years ago and then I graduated to commercial insurance about 2 years after that and I have worked at a couple of the very large brokerages here in Winnipeg and then.

01:53.35

wongga

Okay I started off the and the out pe management. It's absolutely about twenty years ago and then I graduated commercial insurance about 2 years after that and have worked at a couple of very large for here who went to panic and then recently what we did.

02:09.99

Sandy

Ah, recently probably about a year ago I settled at Kilk Or Bell Insurance and with that I've always worked with owners of the brokerages and discovered that early on my niche was leaning towards ensuring real estate properties.

02:11.80

wongga

But year ago has settledd that Kior bellel insurance and with that I always worked with owners of the property use it discovered that early on my the leach was leaning towards drain real steep properties which includes mostly the residential.

02:27.13

Sandy

Ah, which includes mostly the residential side of things and I've made it my goal to learn as much as I can about commercial rentals and I learned that I have a clear understanding of both what the insured needs and should have.

02:31.70

wongga

Your things and I've made it my goal explain as much as I can about commercial rentals and I've learned that I have clear understanding of both of the future needs and should have and what the insurance coming I'm looking for from them. Oh okay, let me.

02:44.35

Sandy

And what the insurance companies are looking for from them. Oh okay, let me I going to back up a little bit. Okay, so i' known you for quite some time now you've taken care of us for many many years and you said pet insurance right? but tell me about my interest in health insurance.

02:50.13

wongga

Going to back up a little bit because I known you for quite some time now you've taken care of us for many many years and you said pet insurance tell me about that. That's interesting pet insurance. That's true. There's only 1 account. Um that I know I actually work for.

03:01.98

Sandy

Yeah, that's true. There's only one company um that I know of that. Um I actually worked for and um, what they do is they um people can buy pet insurance to cover them and it works as similar to like house and commercial insurance that.

03:09.55

wongga

And what we do is a people combine pet insurance to cover them and works as similar to like house and commercial insurance that you buy insurance to to help you pay for going into the vet and you paying for saying this health insurance. Um.

03:20.62

Sandy

You buy insurance to to help you pay for going to the vet and you know paying for same as Health insurance. Um for condition Health Insurance conditions. Um, so you you're paying into the plan and then you have a condition like a heart condition.

03:29.26

wongga

Condition Health Insurance conditions. Um, so you you're paying into the plant then people go to condition like a heart condition or prescription. Oh okay, yeah, okay similar idea. Oh okay, so pet insurance. Okay, so like things like preexisting conditions and.

03:38.85

Sandy

Prescriptions and things like that. Yeah so similar idea right? So yeah, that ensures. Yeah so like things like pre-existing exactly? Yeah, exactly right or surgeries or things like that. So yeah, that's probably a pretty big industry. Yeah sorry I just.

03:48.11

wongga

You know? Wow Okay, surgery. Yeah well, that's that's probably a pretty big industry. Okay sorry I Just you know again, It's my podcast I can ask what I want. So um, let let's um, get back into ah your role like so commercial insurance Account Manager Um, what exactly.

03:56.45

Sandy

Well again, it's like podcasting for sure. Let let's um, get back into your role like so commercial insurance Account Manager Um, what exactly is commercial insurance. Okay, so that is anything to do with like buildings like it's um.

04:07.82

wongga

Is commercial insurance. Okay, so that is anything to do with like buildings like its um, you know on the commercial side like buildings commercial businesses. What their what their operations are um, you know their rents. Their.

04:14.20

Sandy

You know on the commercial side like buildings. Um commercial um businesses. Um, what their what their operations are um, you know their you know rents their income. What what? they're doing their liability and things like that. So basically.

04:26.74

wongga

Income doing reliability. So basically if I'm trying to understand this and I'm I'm trying to kind of summarize this for our listeners as well because Insurance is I think a very needed topic for education. But.

04:33.20

Sandy

I'm trying to understand this and I'm I'm trying to kind of summarize this for our listeners because Insurance is I think a very needed topic for education but a typical policy that's not commercial would be something like a homework correct. So I own a house I need insurance.

04:42.97

wongga

A typical policy that's not commercial would be something like a homeowner's policy so I own a house I need insurance I'm not renting it. It's just myself my family maybe my valuables. Maybe I've got I don't know an exotic car or something so I need some kind of rider on that is that kind of right? Well we have.

04:50.41

Sandy

Ah, not renting it. It's just myself my family maybe my valuables exactly your contents. So yeah cars something so right some kind of rider on that is that kind of right? Well we have you know obviously in manitoa we have Manitoba public insurance but um for your home. You've got your contents.

05:02.68

wongga

Obviously in manage trouble we have manage of about public insurance. But for your home you've got your content right? Your liability of course everyone has to have liability but on a commercial side you got equipment right? and you must talk. So it's different.

05:10.15

Sandy

Um, your liability. Of course everyone has to have liability. Um, but on a commercial side. You've got equipment right? and you've got stock. So it's different right? and you have business income. Um, and you've got profits.

05:21.41

wongga

Okay, is this income. Um, and you got profits right? There's 2 different things to in that aspect. Okay, so and you've got your building if you own it right? You have improvements tenon improvements. You're leasing that. Okay, right? okay.

05:26.52

Sandy

Right? So there's 2 different things in in that aspect right? So and you've got your building if you own it or you have improvements tenant improvements if you're leasing it? Okay, right? Okay so I would cover it commercial and then from commercial insurance. Obviously I can have a hair salon business.

05:39.36

wongga

So that would cover commercial and then from commercial insurance. Obviously I could have a hair salon business I could have income that I need insured and then now we're specifically bringing you on to talk about real estate investment.

05:46.43

Sandy

It could have income that I need insured and then now we're specifically bringing you on to talk about real estate right? investment right? I mean would you say as a percentage do you mainly work on active businesses or is it real estate like what's what you say your specialty my I would say my special ladyty.

05:54.64

wongga

I mean would you say as a percentage do you mainly work on active businesses or is it real estate like what's what would you say your specialty is why I would say my specialty like I like to call it Ansh there's the real estate real like whether it's apartment buildings or.

06:05.60

Sandy

Like I like to call it a niche um is the real estate real estate like whether it's apartment buildings or rented dwellings. Um that I I like to think that that's kind of my niche. Okay.

06:15.60

wongga

Dwells Um, like think that that's kind of my okay, well let's so let's dive into that a little bit. How would ah an insurance policy differ from a typical homeowner's policy and then all of a sudden I mean the house is the same. It's just somebody else is living there I mean.

06:21.12

Sandy

Well let's let's dive into that a little bit. How would ah an insurance policy differ from a typical homeowner's policy and then all of a sudden I mean the house is the same. It's just somebody else is living there I mean I would I've heard this from clients can't I just use my existing homeowners policy right? book that okay.

06:34.45

wongga

I Would I've heard this from clients can't I just use my existing homeowners policy tell me about that. Well the difference is is an investment great thing. A ownerner is the investor right? So they're not actually living in the house right? Okay, so and they have rental income. So.

06:40.50

Sandy

Um, well the difference is it's it's an investment right? The the owner is the investor right? So they're not actually living in the house. So um and they have rental income so 2 different things. So.

06:54.16

wongga

Different things. So the insurance can be to use it as as as a different type of home is not a home to them. It's an investment. So the owner isn't living there and you got rental income. Okay, so.

06:55.76

Sandy

Um, the insurance company views it as 2 different as as a different type of home. It's not a home to them. It's an investment. So the owner isn't living there and um, you've got rental income. Okay, okay so from a liability point of view I mean from insurance.

07:10.96

wongga

From a liability point of view I mean from the insurance. So is there any if I just stay with my homeowner's policy I don't tell the insurance company and I just rent it out to a tenant I mean I would say so what right? I've heard that from a lot of people. What's the difference I'm getting a pretty good rate. Why would I want to tell them.

07:14.97

Sandy

So is there any if I just stay with my homeowners policy right? I don't tell the insurance company and I just rented out to a tenant I mean I would say so what right? I've heard that from a lot of people. What's the difference I'm getting a pretty good rate. Why would I want to tell them that I have a tenant in place to have my insurance increase.

07:29.74

wongga

That I have a tenant in place and have my insurance increase. Sorry so you would say you're saying that it's okay so it's a different occupancy. Well I'm saying I hear this a lot right? So I think there's some investors out there who don't know.

07:33.86

Sandy

Sorry so you would say you're saying that it's okay so it's a different occupancy right? So I hear this lot. Okay, so I think there's some investors out there who don't know that they should change. Okay and I'm kind of wondering.

07:48.21

wongga

That they should change and I'm kind of wondering are there any consequences to that just because there's a tenant there instead of an owner. Okay, so if if a loss occurs though and if the tenant caused it right? um.

07:51.75

Sandy

Are there any consequences to that just because there's a tenant that are instead of an owner. Okay, so if if a loss occurs though and the um if the tenant caused it. Um that it's a misrepresentation of the property.

08:07.83

wongga

Misrepresentation of the property right? right? So the claim could get denied because it you know the adjuster goes and they find out Well the owner is in action living here. So the risk has changed. Ah, okay so that that affects it.

08:10.32

Sandy

Right? So the claim could get denied because you know the the adjuster goes and they find out Well the owner isn't actually living here. So the risk has changed right? So that that affects it quite a bit right.

08:26.43

wongga

Okay, so now we're getting to these buzzwords This is a scary part right? And what I why I wanted to bring you on because we talk about things like risk we talk about things like misrepresentation right? And yes, a tenant living in a property is going to have a little bit more risk than.

08:27.66

Sandy

So So now we're getting into these buzzwords. This is the scary part right? And what I why I wanted to bring you on because we talk about things like risk we talk about things like misrepresentation right? right? And yes, a penant living in a property is going to have a little bit more risk Then. Ah, homeowner and therefore that's why that policy might be more expensive because recovering things like Aulism right? different situations right? and in and historically a tenant doesn't take the same care of a property as an owner does right? right? so.

08:45.80

wongga

Ah, homeowner and therefore that's why that policy might be more expensive because they're covering things like vandalism and different situations right? and and historically a tenant doesn't take the same care of a property as an owner does right. So um, you know they you know they don't care if the water was that funny or you know the the door was locked and they went out or you know, um, things like that. But I We historically we see that right? So um, you know the owner is making sure that you know.

09:05.14

Sandy

Um, you know they you know they don't care if the water was left running or you know whether the door was locked when they went out or you know, um, things like that I mean historically we see that right? So um, you know the owner is making sure that you know. All the windows are shot and they you know right? things like that whereas a tenant. They don't necessarily care like that. So like you know you said the word history I think it's important to you know, really delineate that because I think insurance in general follows history and.

09:24.25

wongga

<unk> are shot and they you know right? things like that or is a canon. They don't necessarily care like that right? and I you know you said the word history I think it's important to you know, really delineate that because I think insurance in general follows history right? and. You know a homeowner. Yeah,, they're not going to have that risk because they're taking care of the house. Um, yeah, no, That's Great. So when we talk about appropriate insurance coverage then you're saying that is very crucial for a real estate investor. Okay, okay, so for those who are maybe less familiar.

09:43.16

Sandy

You know a homeowner. Yeah,, they're not going to have that risk because they're taking care of the house right? Um, yeah, no, That's Great. So when we talk about appropriate insurance coverage then you're saying that is very crucial for a real estate investor right? right? Okay, So for those. Who are maybe less Familiar. Can you explain? maybe the different types I mean I've heard these terms replacement cost coinsurance. Obviously I think the average person kind of just gets lost bit of noise. Can you maybe tell us start with the difference between replacement and cold coin. Okay well.

10:01.99

wongga

Um, can you explain maybe the different types I mean I've heard these terms replacement costs coinsurance Honestly I think the average person kind of just gets lost in the noise can you maybe tell us start with the difference between replacement and coinsurance. They're not really.

10:19.88

Sandy

They're not really different like they're not really different because replacement costs like most in most cases um policies are replacement cost. Um, but um, it means that the um replacement cost. What the actual definition is that um.

10:21.45

wongga

Different like they're not really different because replacement costs like most in most cases policies are a replacement cost. Um, but um, it means that the um replacement cost. What the actual definition is that um the policy is going.

10:39.52

Sandy

The policy is going the insurance company is going to replace the damage property with similar new property. But that's what replacement cost means right within the limit that you've insured it for so um so if your house is insured for 500000

10:41.25

wongga

The insurance company is going to replace the damaged property with similar view properties like that's what replacement costs me. Okay, right within the limit that you've been through it for okay, right? still? Um, so if your house is injured 500000 whatever property has been lost.

10:58.49

Sandy

Whatever Property has been lost or damaged is going to be replaced within that limit. Okay, so um, that's what replacement cost means but what coinsurance means like we all we all see that on our policy documents or.

11:00.93

wongga

Damage is going to be replaced within that limit. Okay, okay, so um, that's what replacement cost means but what coinsurance because I think all of we'll see that on our policy documents that most people do with if you're looking at.

11:17.74

Sandy

Most people do if if you're looking at it. It's always there's a percentage right? you we see in most in most cases that's 90% sometimes it's 80% and what that means is that um insurance companies want a client to take a share of a loss right? so.

11:19.94

wongga

It's always there's a percentage right? we see in in most case, that's 90% sometimes it's 80% right and what that means is that um insurance companies want a client to take a share of a loss right? So because they don't want to be 100%

11:37.60

Sandy

Because they don't want to be 100% of that right? So what that means is and ah try to break that down or a little mean what it means is that um they want the property to be insured for at least 90% of say that nut 500000

11:39.30

wongga

Right? So what that means is try to break that down at length mean what it means is that um they want the property to be the short bread released 90% off that not 500000 okay okay so that.

11:55.66

Sandy

Okay, so that of that replacement cost of that 500000 so what I sometimes hear is the person says to me if they're trying to save a buck right? They go? Well why don't I just ins ensure it for the 90% of that 500000 right

11:59.95

wongga

Replacement costs of that 500000 so what I saw to here is the person says to me and they're trying to save a box right? Well why don't I justur for the 90% of that 500 fast right right? because they're trying to save.

12:15.60

Sandy

Because they're trying to save and instead of saying well I don't want to insure it for ah 500000 because you're telling me that's what the replacement cost of it is why don't I discure it for 90% of that and it go well, that's not what the insurance company wants you to ensure it for because.

12:16.96

wongga

Instead of saying I don't want to ensure it for the 500000 a yearre told me that's what the replacement cost if it is why on I district 90% of that and go well that's not what the insurance company wants you to insurance for because key thing is that.

12:34.15

Sandy

Key thing is that if a claim happens eleven months into that term you're no longer insure for 90% of that because as we all know is that as time goes on replacement costs of property now is increasing right.

12:35.73

wongga

If a claim happens eleven months into that term you're no longer insured for 9% of that because as we all know is that as time goes on replacement cost of property now is increasing right? right? Okay, so.

12:53.26

Sandy

So if it happened ten months or eleven months into the term that replacement cost is not 500000 anymore it might be five forty so you're no longer at 90% you might be at 80% and what are the consequences. Okay.

12:54.72

wongga

If it happened ten months or five months into the term that replacement cost is not 500000 anymore it might be five forty so you're no longer at 9% okay here might be a 80% and what are the consequences then okay so this is where coinsurance.

13:12.15

Sandy

So this is where a coinsurance penalty will come into play at the time of the loss and so what happens is the insurance company will apply a coinsurance penalty and I can give you an example of that. So if you said um.

13:14.25

wongga

Penalty and come into okay at the time of the loss and so what happens is the insurance company will apply the full insurance penalty and I can give you an example of that. So if you said um.

13:31.20

Sandy

If you ins ensureed your property for they do a penalty clause. Okay, so if you insured your property and I I did one here of 447000 is what you insured it for you chose to insure it for 447000

13:31.46

wongga

You ensured your property for they to the penalty office. Okay, if you ensured your property I did want here of 447000 is what youured. Okay, so to ensure it from 400 okay

13:50.46

Sandy

But you should have insured it for 545000 because we told you you should have insured it for 545000 they take that four forty seven they divide it by what it should have insured for at five forty five and that comes out to 82%

13:50.51

wongga

But you should have insured it for 545000 been okay, we told you you should have inured it for five hundred and forty five months they take that four forty seven they divided by what it should have beensured for at five point five and that comes up to 82% okay, no only you different 82% right? So what happens then? Okay, so say there was a loss. Okay, and in most cases, there's only a partial loss very rare. Sure. Yeah, never yeah, most properties are never going to burn right down to the ground so you have ah a kitchen fire.

14:09.89

Sandy

You've only insured it for 82% right and they okay so say there was a loss. Okay, and in most cases, there's only a partial loss very rarely right? Never yeah, most properties right? right? onto the ground so you have ah a kitchen fire say.

14:27.71

wongga

Okay, gone forget and it was $8000 so they take that four forty seven is what you insured it for right? You divided by the what you should have insured it for the five and forty five and that's 82% okay multiply that time say $80000 and what losses.

14:28.34

Sandy

God forbid and it was $80000 so they take that four forty seven is what you insured it for you divide it by the what you should have insured a for at the five forty five and that's 82%. Okay, you multiply that times the $80000 on what. Losses happen. Okay see we're going. Okay, that comes out to sixty five thousand six fifteen right so I can summarize it for the listeners. Okay, you under the intentionally under insur property because properties are.

14:47.53

wongga

Ah, okay, see where we're going. Okay, that comes up to sixty five thousand six fifty great so if I can summarize it for the listeners you under you intentionally underinsure your property because properties are estimated out.

15:06.15

Sandy

Estimated out per dollar value per per right per whatever right right? A Thousand Square foot property at whatever next right? So now you think your you are saving but now that $80000 kitchen is coming in and they're only paying you.

15:06.86

wongga

Per dollar value per square foot per whatever right? you got one Thousand Square Foot property at whatever x dollars. So now you think you, you are saving but now that $80000 kitchen is coming in and they're only paying you 80% or whatever your calculation was.

15:22.86

Sandy

80% or whatever. Yeah operation was right? So they're only going to end up with what 60000 right 65 yeah so the insurance company is only going to pay $65000 of that so you're going to have to come out of your pocket right? You're going to have to pay the rest of that claim that's like 20000

15:25.57

wongga

So they're only going to end up with what 60000 to try to replace so the insurance companies is only gonna pay $65000 of that. So then the rest has to come out of your pocket right? Okay I have to pay the rest of that plane and that's like $20000 just in this very small example.

15:42.18

Sandy

All right? Plus you're deductible plus deductible. Okay, okay, so that's where the coinsurance penalty comes into play because they are going to calculate. Normally they won't calculate that that doesn't come into play Coinance Penalty does not come into play unless you've underinsured your.

15:44.66

wongga

Plus Deductible. Okay, okay, so that's why the poorinsured penalty comes into play because they are going to calculate. Normally they won't calculate that that doesn't come into play coin concerned penalty does not come into play unless you've got your insured your property. Okay.

16:01.59

Sandy

Property. Okay, okay so I guess I mean where I was gonna ask you this later in the podcast. But how important is it then to review every year on'li right? one of us just we see it right? see that the cause that says yeah if there's any.

16:04.14

wongga

Okay, so I guess I mean I was going to ask you this later in the podcast. But how important is it then to review every year on renewal because a lot of us just we see it. We see the the clauset says. Yeah, if there's any any issues please contact me. But I mean.

16:19.71

Sandy

Issues please contact me. But I mean you this same thing and building values of prior. Our story construction costs skyrocket Yes here in yes, years, be not with rain or San right? And that's why.

16:22.22

wongga

You miss something and building values of sky are sorry construction costs of skyrock could like they have here in the last few years you're definitely not within 90% anymore and that's why in the last few years insurance companies are automatically increasing your building values here here. Okay.

16:33.50

Sandy

In the last few years insurance companies are automatically increasing your building values year to year right? like everyone sees that like on your homeowners on commercial properties. They're automatically increasing buildings. They never used to do that but they are now like you'll see your buildings go up.

16:40.93

wongga

Like everyone sees that like on your homeers on commercial properties. They're automatically increasing buildings. They never used to do that but they are now like you'll see your buildings for even among 5% okay on on. Okay, so I think I may be missing something here.

16:53.42

Sandy

Minimum 5% every year on ah on I renewal. Okay, so I think I'm maybe missing something here I mean I've been in this industry a long time I you can correct me if I'm wrong but couldn't a long time ago. You could read you could ensure something for replacement cost.

17:00.89

wongga

I mean I've been in this industry a long time. You can correct me if I'm wrong but couldn't a long time ago. You could you could ensure something for replacement cost or you could just ensure it for the market value is there not an option to do that. So if I have a.

17:10.49

Sandy

Or you could just ins ensure it for the market value is there not an option to do that. So if I have a single familymi home in a decent neighborhood worth $300000 then I'm ensuring it for 300 and if it you know Burns down to the ground I get a check for 300000 or it might cost 550 to rebuild.

17:16.41

wongga

Ah, single family home in a decent neighborhood worth $300000 then I'm ensuring it for 300 and if it you know Burns down to the ground I get a check for 300000 or it might cost 550 to rebuild that building and then replacement cost I'm now ensuring it for five fifty is that.

17:30.72

Sandy

Building and then replacement cost I'm now insuring it for 5 to 50 is that am I off base there I I don't know whether that's um, usually what happens if you decide that you don't want to rebuild a house the insurance companies usually calculate an actual cash value for your home.

17:36.37

wongga

Am I off base there I I don't know whether that's um, usually what happens if you decide that you don't want to rebuild the house. The insurance company usually calculating an actual cash value for your home. That's a little bit different. Oh okay so ace.

17:50.18

Sandy

That's a little bit different than a market value. Yeah um, Ace acv. Actually yes now can you just ensure something for actual cash value you. That's what I you might be yeah, you might be thinking of actual cash value if you just.

17:53.78

wongga

Acv or actual cash value now. Can you just ensure something for actual cash value. Maybe that's what I'm thinking of yeah, you might be thinking of actual cash value if you just like ah like there are some people decide. You know what? I've still open and because you you obviously still have your band your house told you you know burn.

18:04.37

Sandy

Like ah like there are some people that decide. You know what? I've still got my land because you you obviously still have your land if your house Totally you know burns to the ground. Um they will settle for an actual cash value because that actual cash value is calculated like you know because they take in the age of the house and and all that kind of thing. But.

18:13.70

wongga

Um, they will settle for an option cash value because that actual cash values calculate like you know because they take in the age of the house and all that kind of thing but um, they won't give you the check for what you insured it for like obviously no of course um, but they will.

18:23.83

Sandy

Um, they won't give you a check for what you insured it for like obviously right? So um, but they will calculate. You know, Obviously there's a discussion of of the back and after the fact and I not go to you and say hey I've got a property in a C class neighborhood I know that.

18:33.00

wongga

You know, see there's a discussion. Um, but that's after the fact can I not go to you and say hey I've got a property in a c-class neighborhood I know that I can sell it for 150 can I just ensure it for one fifty ah on acv is that a thing or.

18:42.86

Sandy

Ah, can sell it for one fifty can I just ensure it for one fifty on etv something or is it does it have to be replacement costs. It doesn't have to be replacement costs. No I mean it's certainly a discussion that can be had right? But there's there's usually some parameters there though because.

18:49.48

wongga

It does it have to be replacement costs. It doesn't have to be replacement costs. No I mean it's certainly a discussion that can be had right right? There's usually some parameters that will go because we need do calculations of what a house is is worth right. Replacement cost value or most programs to.

19:00.62

Sandy

We we do calculations of what a house is is worth right? Replacement costs value or most brokers do I mean? um so we have you know an insurance program that we use right to to calculate what a house is is worth in insurance system. But.

19:09.19

wongga

Um, so we have you know an insurance program that we use right to to calculate what a house is is worth in insurance system but um and that's based on you know the square footage and your built and and all that kind of thing. But um, then we if you want to do an actual cash.

19:20.20

Sandy

Um, and that's based on you know the square footage and the year built and and all that kind of thing. But um, then if you want to do an actual cash value then there's a calculation used right to to come up with that actual cash value. Um different brokers use different systems right? so.

19:28.80

wongga

Value then there's a calculation used right to to to come up with that actual cash value. Um given vs used different systems right? Okay, so it's usually around 65% of that replacement cost. Okay, that's how a natural.

19:39.17

Sandy

Um, it's usually around 65% of the replacement cost. So that's how an actual cash value is come up with and that's usually acceptable to insurance companies. So um, but sometimes there's other factors that come into play like what's the mortgage on it and things like that right? so.

19:47.57

wongga

Values come up with and that's usually acceptable to insurance companies. So um, but sometimes there's other factors that come into play like what's the mortgage on it and things like that right? So um, that's certainly a decision of the client as well like okay and you don't want to go too far.

19:58.71

Sandy

Um, that's certainly a decision of the client as well. Like you know you don't want to go too far below what that is right? So well and you know yeah I mean given on my $50000 example you have a kitchen fire for 80000 now that you know.

20:06.35

wongga

Hello what that is right? So well I mean if it yeah I mean even on my one hundred and fifty thousand dollars example you have a kitchen fire for 80000 now that you know how are you going to ever get that rented out without taking that out of your pocket right? So that's that's where okay so let's let's some.

20:17.82

Sandy

Are you going to ever get that rented out exactly oh taking that out of your pocket right? exactly? Okay, yeah, so let's let's um, speak about specific coverages for real estate investors. Okay, you know, can you talk about some I mean what does a real a rental policy real estate policy have versus.

20:25.93

wongga

Speak about specific coverages for real estate investors. You know, can you talk about some I mean what does a real a rental policy real estate policy have versus a homeowner. What should it have rather well 2 key things that they come to mind. We're sure that they should have that.

20:36.70

Sandy

Homeowner. What should it have right? Well 2 key things that ah that come to mind for sure that they should have that homeowners don'tly obviously rental covers and you'd be surprised how many um you know prospects that I speak to is that.

20:45.30

wongga

Orders don'tly obviously rent covers and you'd be surprised how many um you know prospects that I speak to is that I say are rents covered and they go brands right? Yeah and it surprises me that you know.

20:55.30

Sandy

I say are your rents covered and they go rents right? and and it surprises me that you know number one either. They don't notice that that hasn't been or they'll say ah that question's never been asked to me and um echo Go kate.

21:03.95

wongga

The 1 either. They don't notice that that hasn't and or there's a a flat question's never been asked to be and um echo. Okay, and they say well. What's the benefit of that that gold. So if something should happen to your property your tenant can't live there because there are repairs that have.

21:13.17

Sandy

And they say well. What's the benefit of that and I go. Okay so if something should happen to your property your tenant can't live there because there are repairs that have to be done because of a loss. The rents can be claimed on on the policy and they go Oh wow, that's.

21:23.57

wongga

Because of a loss. The rents can be named on on the policy.

21:31.37

wongga

You know that? So um, that's key right? Well let's let's spell it out for the listeners so you have a house fire kitchen fire in January happens a lot more than we'd like it to.

21:32.53

Sandy

Wow. Didn't know that. So um, that's key right? Well let's let's pull it out for the listeners right? So you have a house fire kitchen fire in January happens a lot more than we'd likely to do right.

21:48.63

wongga

The residents are now they can't live there. They're in a hotel or maybe the lease is broken or whatever and it might take 8 ten twelve months for the rebuilt. That's great. So now you're going to have a brand new unit. But the whole time you're still paying your mortgage your insurance your property taxes and you have 0 income coming in.

21:49.29

Sandy

Residents are now they can't live there. They're in a hotel or maybe the lease is broken or whatever and it might take the ten twelve months for the rebuilt right? That's great. So now you're going on a brand new unit. But the whole time you're still paying your mortgage your standard your property taxes and you have 0 income coming. That's right.

22:08.10

wongga

And that's out of your pocket unless you have rental income insurance. So I mean I know this answer already. But I again I want it for the podcast I mean what we're not talking about a huge cost here. Are we rental Income is so cheap.

22:08.11

Sandy

And that's out of your pocket unless you have rental income insurance correct. So I mean I know this answer already but I stand for this podcast I mean what we're not talking about a huge cost here. No rental income is so cheap it really that.

22:24.89

wongga

Like throw some numbers at me $1200 rent like you know, yeah it would be less than it's somewhere between fifty and seventy dollars a year right? So listeners if you've got a twelve fifteen hundred dollars rental in a house. It's basically going to cost you like five bucks a month.

22:26.29

Sandy

Hundred dollars rents folks. You know it? Yeah, it would be less than it's somewhere between fifty and seventy dollars a year a year. Yes, so listeners. You've got a twelve fifty hundred dollars rental in a house. Yeah, it's basically going to cost you like five bucks a month right to ins ensure your rental.

22:44.64

wongga

To ensure your rental income. That's it's so reasonable. Yeah now I Hope that's a big takeaway listeners. But okay so rental income insurance. You said that's one of the keys what else sewer back? Okay, yeah has a lot of houses.

22:45.66

Sandy

Right? It's it's It's so reasonable. It's yeah no I Hope that's a great take free listen right? Okay so rental income insurance right? That's one of the Keys Yes sewer backup coverage. Okay, yeah, yeah, because a lot of houses if it even if it's a.

23:03.82

wongga

Even if it's a even if it's a single have finished basements right? and um, sometimes these hos don't have so lockup coverage and I've seen planes where um, they're finished basements and they.

23:04.90

Sandy

Even if it's a single have finished basements right? and sometimes these houses don't have sewer backup coverage and I've seen claims where um, they're finished basements and they didn't have sewer backup coverage. Yeah.

23:21.68

wongga

Yeah, and a so basement seventy eighty Ninety grand to rebuild right? Yeah and that's where the water's gonna come through you mean and we see a lot of our clients. You know? oh there's six inches of water. Yeah, just shot back it up and throw a fan down there and then two months later, they've got mold issues right.

23:24.56

Sandy

Basement 708090 grand to rebuild right? That's right, yeah and that's where the water is gonna come. That's right, are we seeing a lot of our clients. You know? oh there's six inches of water. Yeah, just shop back it up and throw a fan down there and then two months later they and that's right, yeah right? That's what's hidden behind the drywall right.

23:40.38

wongga

Right? behind the drywall. Yeah so I have heard that it's more difficult to ensure a rented dwelling with sewer backup insurance though is it not it can be. It can be Okay, if you don't have a replacement cost coverage. Okay.

23:43.45

Sandy

So I have heard that it's more difficult to ensure a rented dwelling sewer backup insurance but it not it can be Yeah, it can be okay, right? If you don't have replacement cost coverage. Okay, and that's where yeah I guess.

23:59.26

wongga

And that's where yeah I Guess it's talk to your broker right? Make sure you're covered properly look at the fine fine deep The fine print. There's a lot of lot of these standable policies are not replacement cost coverage. So if it's just a name perils policy. You don't get.

24:01.17

Sandy

Talk to your broker right? Make sure you're that's right, really look get the fine right? find the refined friends. Yeah because a lot of ah lot of these standalone policies are not replacement cost Coverage. So if it's at just a name Perils Policy. You don't get sewer Backup Coverage. Including standalone policies Well like people that are like these real estate. Um, ah people that have or have investment properties as rentals don't get um because um insurance companies don't offer a standalone policy with replacement costs right? so.

24:20.58

wongga

So You said standalone policies Well wouldn't people that like these real estate um child people that have investment properties as rentals don't get because insurance companies don't offer a stand-alone policy with replacement. Right? So um, they only get retain themselves coverage and what is named Perils named Perils is just your basic like fire wind and hail down you know, like just the standard smoke.

24:40.00

Sandy

Um, they only give you name perils coverage and what is name Perils name Perils is just your basic like fire wind and hail. Um, you know like just the standard smoke damage like fib.

24:56.13

wongga

So like 5 or 6 specific things that happen and then you're covered. Yeah, but you don't they don't know lose or back of coverage. Okay, what about so a kitchen fire would be covered because that's a fire that's a fire. Yeah, like it's kind of your standard vgan to get items right.

24:57.75

Sandy

Yeah, specific perils you're covered. Yeah, but you don't they don't include sewer backup coverage like it's It's not offered so kitchen fire will be covered. Yeah like because that's a fire. Yeah, like it's kind of your standard. You know, big ticket items but a car running over the curve.

25:14.40

wongga

But a car running over the curb and into your house because it's on a corner is that name Perils I know you're laughing because that happened to me listeners. This is a I might have to do a podcast I don't even want to I'm still having scars from it. We actually had a property. No word of a lie that got hit by a car three separate times.

25:16.57

Sandy

Yeah, it's because it's on a corner right? name perols and know you're luckyy because that happened to me that's right, it happened? yeah and just a podcast I know we kind of and still having squares from it. We actually had a property nowhere to a lie they got hit by a car three separate times that's right within a year

25:33.75

wongga

Within a year I Wonder whether it was intentional and I wasn't driving the car. But anyways, um yeah, so a standalone policy and name perils I mean are you speaking about just somebody walking into a brokerage and saying I have just one rental is that a standalone policy versus a commercial.

25:34.60

Sandy

I Wonder what is intentional and I wasn't driving the car. But anyways, right? Um, yeah, so standalone policy and main perils I mean are you speaking about just somebody walking into a broker age and saying I have just one rental is that a stand. Yes yes versus a commercial pulse correct. Yeah.

25:52.59

wongga

Policy correct yeah, okay cause I think the average person with 1 or 2 rentals would just that. That's what they have a standalone policy correct. Okay and they can't get replacement cost or you're saying they need to request it for that. Okay, so it just has sometimes it depend on the area of the city.

25:54.46

Sandy

Because I saw the average person with 1 or 2 rentals just that's what they have a standone policy correct correct yeah and they can't get replacement cost're saying it not all insurance companies offer that. Okay so it just depends sometimes it depends on the area of the city the age of the property.

26:11.94

wongga

Age of the property like there's a lot of factors that want to coding a rental so whether they've been updated things like that. So um, it's an agency you know age things like that Sure is it going through. Okay, um, you know those are all questions that we're asking when you're trying to.

26:13.44

Sandy

Like there's a lot of factors that go into quoting a rental So whether they've been updated things like that. So um, the age you know the age things like that. There's a lot of things that go into it. So um, you know those are all questions that we're asking when we're trying to quote it I mean obviously.

26:32.00

wongga

I mean obviously the ideal is getting to replaced that cause broad form coverage right? You can't only get what accounts coverage. You know the thrill what I call it friless su bagca um, and we're you know Surviv i's not going to covered. Okay wow. Wow.

26:33.32

Sandy

The ideal is getting replacement costs broadform coverage. But if we can only get name perils coverage. You know the frill what I call it frill is sewer backup. Um, then we're not you know sewer Backup is not going to be covered. So yeah, so the average person.

26:49.99

wongga

So the average person who has 1 or 2 rentals and has these policies I mean if the broker is not knowledgeable. They just walk into a corner you know broker outlet. That's not familiar with the actual commercial rental insurance part of it I guess they're being offered a standalone policy. Maybe.

26:51.91

Sandy

Who has 1 or 2 rentals and has these policies I mean if the broker's not knowledgeable. They just walk into a corner you know broker outlet. That's not familiar with the actual commercial rent insurance right? part of it they I guess they're being offered a spinal loan policy. Maybe it's going to be all perils and they're like oh well this is cheaper.

27:08.67

wongga

It's going to be all perils and they're like oh well this is cheaper but they don't really know that it's only maybe half of the coverage of a real policy and and and a good group will always ask for all the coverages if you told no that that unfortunate.

27:11.48

Sandy

Right? But they don't really know that exactly it's only maybe half of the coverage of a real policy right? and and that and a good broker will always ask for all the coverages If you're told no then yet that's unfortunate, but always ask for all the coverages.

27:27.46

wongga

Always asks for all the and when you say told? No, it's like location by location right? So maybe you have aluminum wiring or you know the roof is too old so they have to you know, take the roof off of the policy Even if the roof is too old. It's just a roof exclusion okay have replacement cost.

27:29.36

Sandy

And when you say told? No, it's like location by location. Yes, exactly wiring right? or you know yeah fuses or right? Yeah, you don't take a roof but even even even if the roof is too old. It's just a roof exclusion. You could still have replacement cost broad form coverage and the roof is excluded.

27:46.36

wongga

Form coverage and the roof is excluded but you know you tell the client that and then they can get it replaced but you can still have all the other coverages but the ideas from the beginning of this mission. Ask for everything right.

27:49.33

Sandy

But you know you tell the client that and then they can get it replaced but um, you can still have all the other coverages but the ideas from the beginning of the submission. Ask for everything right? Ask for everything in that sort. It's about fun I don't even want to save kitchen sink.

28:03.48

wongga

Ask for everything in the sorry. That's a bad pun I don't even want to say it kitchen sink right? Ask for everything the kitchen sink. Um I know that there's something called like I don't know what's a bylaw improvement or code improvement coverage is is that pretty important it is important um, is in most cases when you.

28:07.33

Sandy

Right? My kitchen right? right? Um I know that there's something called like I don't know if the bylaw improvement or code improvement. Yes, average is is that pretty important it. It is important. Um and in most cases when you that's another thing that um.

28:23.38

wongga

It's another thing that um Brokers should be looking at is that most policies include bylaw coverages but is to different degrees. So sometimes it's included in the building value. Sometimes it's included in their.

28:25.60

Sandy

Brokerages should be looking at is that most policies include bylaw coverages but is to different degrees. So sometimes it's included in the building value. Sometimes it's included in their frills as a ah.

28:42.85

wongga

Grills as a ah you know percentage of the building or it can be of certain value. It could be like 175000 whatever in their real section. So it's important to be looking or depending on the building like the age or.

28:44.27

Sandy

You know percentage of the building or it can be a of certain value. It could be like 175000 whatever in their frill section. So it's important to be looking or depending on the building like ah the age or. Or whatever sometimes we have to ask for it as a separate like additional limit to be I mean to find for us what code and like what are we talking about code improvement so give me an example of how that would be important. Are you talking about bylaws in particular like for.

29:02.46

wongga

Whatever it is intention. You have to ask for it as a separate like additional and but I mean define for us what code and but like what are we talking about code improvement so give me an example of of how that would be important you talking about bylaws in particular like for typeling.

29:21.48

Sandy

Like when when because like I'm thinking of bylaws in particular. Okay, um I just want to kind of define it in Layman's terms what we're talking about here I kind of have an idea but I want to find out from your experience. What exactly is code or bylaw improvement coverage and why is it important? Okay well.

29:22.19

wongga

Because like I'm thinking bylaws in particular. Okay I just want to kind of define it in the Layman's terms what we're talking about here I Kind of have an idea but I want to find out from your experience. What exactly is code or bylaw improvement coverage and why is it important? Okay well.

29:41.17

Sandy

Bylaws comes to mind because we have so many older homes in winnipeg because you know historically, that's what we have um so when a claim happens and you know they open up the walls and we see so many things that are not to code.

29:41.47

wongga

Bylaws comes to mind because we have so many older homes. Okay, when pay because you know was historically that's cow sure um, still when a claim happens and clearly they open up the walls and we see so many things that are not code right? bold wiring or.

29:58.59

Sandy

Right? wiring right? and or you know even the distance between you know, 2 by 4 s or whatever they go. Oh that's not to code you know so things have to be changed I I remember a claim happening not too long but where you know the the flooring was not is ridiculous right? so.

30:00.47

wongga

Asbestos insulation or the distance between you know, 2 by bores or better to they go. That's not code. You know so things have to be changed I remember claim half amount too long, but you know the the flooring was it is ridiculous right? So it can cost.

30:17.99

Sandy

It can cost so much more money on rebuilding or replacing um than what a normal ah claim would happen. So um, those things are important when they're you know repairing.

30:19.23

wongga

So much more money. Okay on rebuilding or replacing um then what a normal clean would happen right? Okay, so um, those things are important when they're you know, repairing right? so.

30:36.58

Sandy

Right? So um, insurance companies have to look at that. So all of a sudden a $10000 claim escalates to 20 right? So I mean that's the minor. Ah sorry sorry, let's let's have let's back up. Okay, so I have a building. Okay I've got.

30:38.21

wongga

Um, insurance companies have to look at that. So all of a sudden that $10000 claim escates 20 right? So I mean that's okay, hang hang on. Okay, so let's let's so let's back up so I have a building I've got 24

30:55.99

Sandy

Twenty four inches on on spacing for my choices. Yeah, obviously it's supposed to be 16 by right? insurance company comes in. It's replacement costs are like okay well we can have 24 it's an engineering you know yeah thing we're gonna not put in 16 but now a $20000 framing repair now becomes.

30:57.30

wongga

Inches on on spacing for my choices. Obviously it's supposed to be 16 by code insurance company comes in. It's replacement costs are like okay well we can't have 24 it's an engineering you know thing we're going to now put in 16 but now a $20000 framing repair now becomes 30

31:14.97

Sandy

30 right? Are you saying if I don't have bylaw improvement coverage that extra $10000 is on me. no no I'm just saying that. Um it just it it. So now it it could be it depends on whether is your building value enough.

31:15.78

wongga

Are you saying if I don't have bylaw improvement coverage that extra $10000 is on me. no no I'm just saying that it just it. So now it could be it depends on whether is your building value in now. Okay, so has it.

31:32.62

Sandy

Right? So has it does is it falling within your building limit.

31:34.19

wongga

Is it falling within your building limit all right.

31:41.90

Sandy

No problem cut that out. Okay, so it just like I'm just saying that bylaws is something that you have to watch in your like your broker should be checking within your policy limit like when you're talking to.

31:41.10

wongga

Yeah, no problem I'll just cut that out again. So it just like I'm just saying that bylaws is something that you have to watch in your like your brokership you check away in your policy limit like when you're talking or um I'm just thinking of an individual there would like some.

31:58.54

Sandy

I'm I'm just thinking of an individual building like so sometimes we we ensure heritage buildings. Okay so quite often like I'm looking at 1 in particular right now that we're just renewed or we're we're marketing. So um, the insurance companies.

32:01.80

wongga

Um, we we interpret heritage buildings. Okay so fight off to and looking that 1 in particular right now that we're just review our her or barking. So um, the entrance was specifically putting a hundred miles elder

32:17.26

Sandy

Specifically putting ah one ah hundred thousand dollars by law limit on that building for that purpose right? because you don't know that if a claim happens. What's going to happen when you open up the walls so they have to be conscious of that.

32:20.66

wongga

Law limit on that building. Okay, that purpose right right? because you don't know when name happens. What's gonna happen when we open up the walls right? Okay so they have to be conscious of that we have to be conscious of that so we're telling the client that you have a 100000

32:35.58

Sandy

We have to be conscious of that so we're telling the client that you have a $100000 limit specific for bylaws. So I'm just seeing I'm just saying that um like when I look at your policy I looked specifically for that right? because you have a lot of.

32:40.94

wongga

Limit specific for bylaws. So I'm just I'm just saying that um like when I look at your policy I look specifically for that right? Do you have a lot of forms that you're ensuring on your portfolio that are older.

32:55.48

Sandy

Homes that you're insuring on your portfolio that are older. You know built in the early nineteen hundreds yeah so I have to look at that right and be conscious of that and talk to the insurance company is this a concern for you right? because you don't want to be in a place where they're going to deny coverage or write the building value.

33:00.20

wongga

Bright in the early nineteen. Yeah, so have to look it back right? and be conscious of that I talk to the insurance company is this a concern for you. Okay, because you don't want to be in a place where they're going to Deny coverage or the building value I mean it could be something as simple as going from a fuse panel to breakers.

33:14.90

Sandy

I mean if could be something as simple as going from a Fuse panel to yes, exactly right? So um and that's why they you know? are we have to be sure that we're ensuring your buildings to the full replacement cost right.

33:19.38

wongga

Right? Exactly right? Okay, so um and that's why you know are we have to be sure that we're ensuring your buildings to the full replacement cost right? Like you said, ask for everything I mean for sixty bucks a year for rental income I imagine all these little.

33:33.53

Sandy

Suck for everything I mean for sixty bucks a year for rentil income I imagine all these little you know be called frills add up to a lot when you can rate a single loss I mean it's catastrophic right? can be yes right? Okay, let's transition into something that.

33:39.35

wongga

You know you call them frills or don't add up to a lot when you consider that a single loss I mean it's catastrophic. Okay, let's transition into something that um I see a lot in our management company.

33:53.20

Sandy

I See a lot in our management company. Okay I think is very misunderstood and that's the concept of vacancy. Okay, because that's a hot but it is a hot gun. Yes I mean let's start with maybe a definition how insurance companies Define Vacant properties right.

33:56.00

wongga

And I think is very misunderstood and that's the concept of vacancy because that's a hot button these days right? So I mean let's start with maybe a definition how do insurance companies Define Vacant properties right? It's It's a it's a clear definition but some people don't understand.

34:10.60

Sandy

Yeah, it's it's It's a clear definition but some people don't understand it. Um, they just think because it's not occupied right? that that's a vacant what vacancy to insurance companies mean that there's no furniture in there. Okay.

34:15.52

wongga

Um, they just think because it's not occupied right? right? That's a vacant what vacancy to follow insurance companies If if there's no furniture in there. Okay, okay so that's a clear they moved out. Okay, okay so that's.

34:29.89

Sandy

So that's it clearly they've moved out. Okay, okay so that's clearly vacant. Okay, so I mean the the appliances can still be there right? But it's common sense right? Oh somebody's living there or not right? but obviously.

34:35.25

wongga

Clearly make okay all right? So I mean the appliances could still be there Sure Well it's it's common sense right? You can tell if somebody's living there or not right? but obviously in in your case with the rangitos the climbs have still belong to the owner.

34:48.41

Sandy

What in in your case when they're rented dwellings the clients still belong to the owner but the furniture has moved out because that belonged to the tenant so that now vacant. Okay, okay so that would be a clear definition of a vacancy. Okay okay, is there a specific time. Period.

34:54.96

wongga

But make sure that not align right? So that now. Okay, okay so that would be your definition on maintenance. Okay, and is there a specific time period Um I mean we're getting into different policies now. But let's talk about.

35:07.88

Sandy

I Mean we're getting into different policies now right? Let's talk about the consequences of having a vacant property and why the insurance company cares. Okay.

35:14.74

wongga

The consequences of having a vacant property and why the insurance company cares if well obviously there's more of a base on its bench right? because um, you know Vandal is always you know? Oh yeah.

35:21.29

Sandy

It. Well obviously there's more of a risk when it's vacant right? because um, you know vandalism we we always you know some people have nothing better to do but to and Randal like right it is it is a higher risk because um, you know.

35:34.28

wongga

Well, it all comes down to risk right? a fire risk because you know there's he can be trying you know, um, right now but obviously frozen pipes pipes right? because there's no one there on and okay, um.

35:40.47

Sandy

There's um, heat can be turned. You know, not right now, but um, obviously the heat can go frozen pipes right? because there's no one there monitoring it right? Um break-ins right? The glass can get broken so waters. Yeah.

35:53.21

wongga

Right? Get squatters wiring being ripped out Copper being harvested for drugs. Yeah, a whole bunch of things. Yeah, this is higher. Okay, right, something happening the cop because no one is there watching it? okay.

35:59.79

Sandy

Wirant Pain Ri right? per bea harvested right? exactly So the the risk is higher when it's vacant right of something happening to the property because no one is there watching it right? So that's why it's It's more of a risk for the insurance company right? And let's talk about consequences.

36:11.89

wongga

So that's why it's it's more of a risk of the insurance company. Okay, and let's talk about consequences. So I have a rented dwelling. It's vacant I don't tell the insurance company somebody breaks in and they set fire to it and there's $100000 loss what is that insurance company. They just going to fix it is there any kind of.

36:17.87

Sandy

So I have a rented dwelling. It's vacant I don't tell the insurance company somebody breaks in and they set fire to it right? There's $100000 loss right? that insurance company. They're just going to fix it is there any kind of issues now. Okay, well the the key thing is how long has it been vacant.

36:31.24

wongga

Issues now. Well, the key thing is how long has it been vacant. Okay, so most pause I would probably think in most cases I haven't seen a policy yet that has said for less than 30 days like there there be there.

36:37.95

Sandy

So most pause I would probably think in most cases I haven't seen a policy yet that has said less than 30 days like their their key their kind of their key thing is thirty days vacant so um

36:50.54

wongga

Key thing is thirty days vacant so um if it's more than thirty days that's be the first big question. They're asking how long is have you taken it? Okay, right? So that that's what they want to know is how long is this vacant.

36:55.41

Sandy

If it's more than 30 days that's going to be the first thing question they're asking how long has it been vacant right? So that's what they want to know is how long is this been vacant right? and then what happens after that thirty days okay thing happened on day 40 right? So then then they're going to say well.

37:05.78

wongga

And then what happens after that thirty days if something happened on day 40 right? So then then they're kind of saying well why weren't we advised? Okay, so um, the thing is that that's the important thing is people forget to count weed like we as your broker.

37:13.40

Sandy

Why weren't we advised So um, the thing is that That's the the important thing is people forget to tell like we as your broker don't know that property is vacant. Sure it's it's up to you as the owner to tell us that it's vacant. So.

37:25.29

wongga

Don't know that property is vacant sure of course stuck to you as the owner to tell us that it's vacant. Okay, so that's the key right? So once it once it's vacant even like you I mean like what are you? What are you doing with that property are you are you selling It are you rerending it.

37:32.41

Sandy

That's the key right? So once it once it's vacant even like you I mean like what are you? What are you doing with that property are you are you selling It are you rerenting it? Um, the key is to let us know then it is our job to tell your insurance company.

37:44.32

wongga

Um, the key is to plant us go then it is our job to tell your insurances company. This is what's happening with the property then the insurance couple put sign. Are we going to because if it's insured for replacement cost then it's their decision to make.

37:51.60

Sandy

This is what's happening with the property then the insurance company will decide. Are we going to because if it's insured for a replacement cost then it's their decision to make Do we switch it to now a name perils policy right? because it's a lesser coverage. There's still going to be covered for fire.

38:02.69

wongga

Do we switch into now a name Har's policy. Okay, right? because it's a buser coverage. They're still gonna be covered for fire. Um, you know the the basic coverage that they are now aware that it's because there's more risk right? higher risk but they are aware of it.

38:11.26

Sandy

Um, you know the the basic coverage but they are now aware that is vacant because they can't risk right? It's a higher risk but they are aware of it. That's the key they are now aware of it and they're going to tell you okay did you tell that owner what they need to do.

38:21.66

wongga

The key they are now aware of it and they're going to tell you okay did you tell that order what they need to do to monitor that property because people don't You know we don't expect you to fine print of your policy of what you need to do now that is vacant. Um, you need to.

38:29.53

Sandy

To monitor that property because people don't You know we don't expect you to read all the fine print of your policy of what you need to do now that is vacant. Um, you need to to keep track of it. You need to document when you've been there right? That's key to right? so that if something should happen. You say well.

38:41.46

wongga

Keep track of it. You need to document when you've been there right? That's key to right? so that if something should happen and you say well I was just there yesterday or I was there two days ago I wrote that down the way when I did like I went around I come across or I showed this sure. It's maybe be.

38:49.42

Sandy

I was just there yesterday or I was there you know two days ago and I wrote that down of what I what I did like I went around I cut the grass or I shovel the snow or whatever the case may be that's documented so you've done your due diligence of monitoring that property.

39:00.45

wongga

That's documented so you've done your diligence of monitoring that property right? But if there's no documentation of when you were there what you did the insurance company has able to say well G you know.

39:06.57

Sandy

Right? But if there's no documentation of when you were there or what you did the insurance company is able to say well gee. You know what's been happening night coverage. They can possibly deny that coverage outside of forty days or you if so let me give you a typical sentence.

39:18.69

wongga

They would deny coverage they can possibly deny that now outside of forty days or even if so let me give you a typical scenario I got an investor their president pulls a midnight run. It's July first and now twenty one days later

39:26.30

Sandy

Okay, ah investor their president pulls a midnight run. It's July first and now twenty one days later well within that 30 day typical policy but they haven't been there and.

39:36.57

wongga

Well within that thirty day typical policy but they haven't been there and a squatter breaks in and sets fire to it. What is the insurance company and and you have no documentation right? So nobody's been there. It's established they've decided we can see no one's been there for twenty one days

39:42.35

Sandy

Ah, squatter breaks sending sets fire to it. What is the insurance company and and you have no documentation right? So nobody's been there. It's established they decided we could see no one's been there for twenty one days and now there's a loss of forty Fifty $60000 is the investor at risk of the insurance.

39:53.94

wongga

And now there's a loss of forty Fifty $60000 is the investor at risk of the insurance company not covering that loss I mean it's going to be case by case situation if they just left on July one you were paid up until July one.

40:00.00

Sandy

Not covering that loss I mean it's going to be a case by case situation if they've just left on July one you were paid up until July 1 correct.

40:14.50

wongga

Let's let's not even talk about the rental right? I guess because I've seen things happen with my own clients in the management company. let's let's switch okay let's say that it's after forty days or something like that right? No one's been there. It's well outside the vacancy. Um.

40:14.57

Sandy

But but that even okay okay I guess because I've seen things happen with k clients in the management. Okay, let's let's switch it. Let's say that it's after forty days okay right no one's been there. Okay, well outside that they can see time frame timerame okay to the policy right.

40:31.74

wongga

Timeframe written into the policy will the insurance company. Maybe not cover that I know it's case by case. But I have seen cases where it hasn't been covered because it's been vacant and my clients is responsible for thirty forty Fifty thousand dollars

40:34.40

Sandy

Will insurance company. Maybe not cover that I know it's case by case. Yeah I've seen cases where it hasn't been covered okay because it's been vacant and my clients is responsible for thirty forty fifty thousand dollars of a rebuilt due to a no heat.

40:49.78

wongga

Ah, a rebuild due to a no heat and water leaking and pipes frozen I you know I cant see e yesster and all because it Precis case I case.

40:53.20

Sandy

Came and pipes right? I you know I can't say yes or no because it it I Guess it is a case by case situation right? You know there's different factors that are brought into it. So um, yeah, it just yeah, you're right? it just it depends right.

41:03.35

wongga

Different factors that are brought into it. So um. Yeah, and okay, no for sure and I don't want to put you on the spot. So let let's speak about hard numbers here you you mentioned something about frequency of going into a property even within whatever time period thirty days or whatnot.

41:11.65

Sandy

Because I'm not a noned adjustster and I'm not oh for sure. But I don't want to put ju yeah, so but let's speak about hard numbers here you you mentioned something about frequency of going to a property right? even within whatever time period thirty days or whatnot. What are we talking about there. Are you sort like fine print in.

41:27.90

wongga

What are we talking about there are is there like fine print in ah in a policy that says see every interest's different right? Some say every each hours some say once a week like I you know like you have to read each policy for each insurance company. They're all different.

41:30.41

Sandy

Theory is every in see every insurance company is different right? Some say every 72 hours some say once a week like ah you know like you have to read each policy or each insurance company. They're all different and that's the moment it becomes vacant it. It's each policy when.

41:44.19

wongga

And that's the moment it becomes vacant it it. It's each policy when each you know right? So right? of course Yeah, so that's thing like it's we've seen. Um, we've seen claims where well when did you know what? to.

41:49.90

Sandy

Each You know it's vacant right? So because of course yeah so that's the thing like it's like we've seen. Um, we've seen claims where well when did you know it became like that's always the key when did you know it became vacant right? so.

42:03.42

wongga

That's always the key when did you know it became bacon. Okay, so I mean that's what register's on house right? and when did when did your 10 vacate and you're right. There are in some cases like especially rental homes. It's different from a commercial lease like on a you know a commercial building.

42:08.40

Sandy

Um, that's what the injusor is going to ask well when did when did your tenant vacate and you're right. There are in some cases like especially in rental homes. It's different from a commercial lease like on a you know a commercial building you tend to know when they're leaving but on ah a vacant on a home.

42:23.31

wongga

Tend to know when they're but on a vacant farm home as you say sometimes they leave in the middle of a night. But um, if you know when that tend leaving then you know what's on coming vacon. Okay, so from an education point of view I'm an investor.

42:27.97

Sandy

As you say sometimes they leave in the middle of the night. But um, if you know when a tenant's leaving then you know when it's becoming vacant right? So from an education point of view I'm an investor I know that I move my tenant on June thirtieth I have been.

42:42.40

wongga

I know that I moved my tenant out june thirtieth I had been trying to get somebody I just couldn't whatever the market's not very good. So now I have a vacant property. Um, and the my insurance specific policy says that somebody has to be checking that every 72 hours

42:46.55

Sandy

Trying to get somebody I just couldn't right? It's not very good. So now I have a vacant property. Um, and the my insurance specific policy says that somebody has to be checking that every 72 hours right so that's from the time that I know it's vacant I actually have to go in and document.

43:00.56

wongga

So that's from the time that I know it's vacant I actually have to go in and document that I've been there Check the windows make sure like I don't think a lot of people know they need to do that right? So but that's what you're saying like that's kind of the take homeme lesson here exactly? Yeah I think they kind of let your insurance.

43:05.85

Sandy

I've been there right? Windows make sure like I don't think a lot of people know they need to do that. Okay, right? So but that's what you're saying like that's kind of the take homeme lesson here exactly? yeah. That's the thing that you got to let your insurance company know then they that your broker should be telling you. Okay, this is what you now need to be doing right for that vacant property right? so because they'll check your policy and say okay as of now this is what you need to be doing. Okay, so step. 1.

43:19.86

wongga

Okay, your broker should be telling you. Okay, this is what you now need write that big. Okay, right? So they'll check your policy say okay as of now. Okay, what you need be doing. Okay, so step 1 you have a vacant property tenant moves or whatever step 2 speak to your broker. They'll go through your policy because they know it better and make your recommendations. Okay Gary you've got to have somebody go in for the next however, long you know every week and make sure that you're doing your checks and document. Maybe you take a photo.

43:37.47

Sandy

Have vacant property 10 whoobs or whatever step 2 speak to your broker. They'll go through your palulas tonight as they know it better and make you recommendations. Okay garre you got to have somebody go in for the next. However, long right? you know and yeah week and make sure that you're doing your checks and documents. Maybe you take a photo.

43:55.55

wongga

Time and date stamp photo that you were there and then let us know when it's now occupied again and then communicate with us because if it now goes past whatever time period we might have to change your policy ah with and maybe have you pay a little bit extra because it's still vacant.

43:55.59

Sandy

Kind of date snap photo that you were there. Yeah and then let us know when it's now Alld yeah, yeah, exactly and then communicate with us because if it now goes past whatever time period we might have to change your policy yes with and maybe have you pay a little of an x revenue because it's still vacant. Yeah, or maybe you're doing a renovation I mean the other exactly.

44:12.00

wongga

Or maybe you're doing a renovation I mean we haven't even talked about that because it because the the copy our teenager is coming to see is a misrepresentation. Okay hold back on that bringing you say you're misrepresent with property so and Don Den denied the wow I've seen letters say that.

44:14.97

Sandy

Yeah, exactly because it it because the the you know the insurance coming say it's a misrepresentation. They'll fall back on that wording to say you're misrepresenting your property So and they they'll deny the claim because of it I've seen I've seen letters that say that.

44:31.98

wongga

Denying the claims. So I think I just alluded to a very nether typical situation landlords had ah our tenant in place for three or four years they finally move out. They're like okay now I'm going to change a couple windows maybe put some new flooring into the bathroom and a tubs around and paint the place. It's going to take me.

44:32.40

Sandy

Right? So I think I just alluded to a very another typical situation right? Landlords had our tenants in place for three or four years they wanted to move out. They're like okay now I'm going to change a couple windows maybe put some new flooring into the bathroom in a tough surround and paint the place and take me.

44:50.00

wongga

Five weeks that is now a different complete thing now because they're not trying to rent it out. It's now basically a construction site even though most people think oh I'm just painting what's the big deal right? So the insurance company would not like that situation at all would they yeah because it.

44:50.50

Sandy

Five weeks that is now a different complete thing now right? You're not trying to rent it out. It's now basically a construction site correct right? Even though, most people think oh I'm just painting this a big deal right? The insurance company would not like that situation at all. No. Yeah, because if if something happened like even 1 of the construction workers could do something to the property right? You've got somebody different in that property right now and something happened right? set a fire and adjuster comes in and goes wait a minute. What's going on here.

45:08.93

wongga

If something happened like keep in one of the construction or first could do something into the property. Sure yeah somebody do like to that property right now right? and something happen been set a fire and adjuster comes in and goes wait a minute. What's going on here. Yeah.

45:26.80

Sandy

Right? Oh my plumbers set fire to the bathroom was trying to yeah they were well welding. Yeah, they were soldering a pipe and they set fire to it. Well wait a minute. What's going on right? So you yeah, you didn't tell us that you run the risk of that whole fire not being covered right because the situation is different. Yeah Wow. Okay.

45:27.31

wongga

Oh My plumbers set fire to the bathroom when they were trying to you know, ah solder yeah solderated fight and and was going on right? So yeah, and then you run the risk of that whole fire not being covered because the situation is different. Wow. Okay, yeah, I'm taking notes and I hope the listeners are taking notes here. Um, Okay so I'm just trying to I'm going through my my question list here because really it you know we're talking about a balance between cost and coverage as a final point.

45:46.74

Sandy

Yeah, yeah, I'm taking notes and I hope the listeners are taking notes here. Okay so I'm just trying to I'm going through my my question list here because really, you know we're talking about a balance between cost and coverage right? As a final point.

46:03.91

wongga

How would you advise clients who prioritize finding the cheapest insurance over getting the more comprehensive coverage and I hear that a lot I should be surprised so often. Um, because and and and and rightfully sold because I I know that.

46:04.16

Sandy

Would you advise clients to prioritize finding the chief of insurance over getting the more confident coverage right? and I hear that a lot actually um, you'd be surprised how often um because and and and. And rightfully so because I I know that people sometimes look at the bottom line. Um, and you know because and ah buying a house or you know investing in a property is is a big ticket item and I understand that um.

46:21.56

wongga

Times a look at the bottom line. Um, and you know and buying a house or you know the investing and a property is is a big tick item and I understand that um what I like to do for people is is inside.

46:35.63

Sandy

What I like to do for people is is I I like to do a chart and because I'm a visual person and and so I like to do a comparison for them and I say okay well what is it that we're comparing for you Um coverages I like to do but side-by-side coverages.

46:39.66

wongga

Like to do a chart and because I'm a visual person and so I'd like to do a comparison for them and they say okay well what is it that we're comparing for you Um coverages I that side by side coverage is say well what? what have you received hold on.

46:55.21

Sandy

I say Well what? what have you received a quote on and I'll say okay because the biggest ticket item in um, a quote is obviously the property value. So.

46:58.73

wongga

And I'll say okay because the biggest ticket item in and um, a quote is obviously the property value So I like to put that into a quote and say okay this is what I'm telling you, you're post for it and.

47:09.25

Sandy

I Like to put that into a quote I say okay this is what I'm telling you your house is worth and what have you received from another broker so that will be the biggest part of the the premium that we're comparing. So.

47:17.40

wongga

But have you received from another broker right? So that will be the biggest part of the the premium that we're comparing right? So um and then I also want to do a dollar um per Square foot.

47:29.10

Sandy

Um, and then I also like to do a dollar um per square foot for them because sometimes um, it could be a comparison to what they had last year as to what it's worth now. Um, because.

47:36.99

wongga

Right? to because sometimes um, it could be in comparison to what they had last year as to what it been worth now. Um, because what they what they received because we we are obligated to.

47:48.10

Sandy

Um, what they what they've received um because we we are obligated to use an insurance program for coming up with the value for a house or building. Whatever the case may be and um, this is what we have to submit to insurance companies.

47:53.73

wongga

Using Insurance program for coming up with the value for a house or building. Whatever the case may be and this is what we have to submit to insurance companies. So for replacement costs. So if if I have to sleep with me.

48:07.22

Sandy

So for replacement costs. So if if I have to sleep at night like that's what I always tell people I want I need to sleep at night. So I'm giving you the best advice that I can do so.

48:12.80

wongga

Like that's when I always step people I want I need to see the night so I'm giving you the best advice that I can do so when I do that compar like um port dollar per square but is and depending on what the construction on the property is and and obviously for houses. It's obviously frame so in today's construction cost.

48:20.80

Sandy

Um, when I do that comparison I tell them what dollar per square foot is and depending on what the construction of the the property is and and obviously for houses. It's obviously frame so in today's construction costs that's got to be well over two hundred ah square foot. Um, so if i'm.

48:32.73

wongga

That's got to be well over charge by square but um, so if I'm seeing what they're offering now its it's like around 150 or whatever to replace I hope its l days that's just not Goingnna cut it for sure.

48:40.60

Sandy

Seeing what they've got right now is is like around 150 or whatever to replace a house nowadays. That's just not going to cut it for sure so when I do the bottom line for them and if they're missing rents right now. Um, and we are obviously increasing.

48:51.95

wongga

So when I do the bottom line for them and if they are risking rents right now and we are risking including rents and forbaca those are beef ticket items right? So it's not an apple to the office full for them when we're doing the bottom line tradeil.

48:59.68

Sandy

Including rentns and Sewerbaup those are big ticket items right? So it's not an applesto- apples quote for them when we're doing the bottom line premium right? So not about the cost. Yeah, clearly it's about what's inside the policy exactly you know what? you're being. Yeah.

49:11.38

wongga

Right? And it's not about the cost necessarily. It's about what's inside the policy and making sure you know what you're being covered and not covered so just saying that this is my premium and this is what you're comparing it to. It's hard to do that without doing that chart in my eyes. So.

49:18.84

Sandy

So to say that Okay, this is my premium and this is what you're comparing it to. It's hard to do that without doing that chart in my eyes. So and you know, um, ah ultimately it's the investor's um, choice in the end. But.

49:30.96

wongga

And you know, um, ah ultimately it's investor um choice in the end but I feel that to to show them that is. It's the best option to say Okay, now that's your choice right? to say.

49:38.46

Sandy

I feel that to to show them that it's It's the best option to say. Okay, now you know that's your choice right? to say? um I've I've shown you what? what? Well they have to make their own right? their own data right? but.

49:52.13

wongga

I've shown you like well they have to make their own decision to make their own bed at the end of the day but I know that I have a lot of clients who have in in the management company who have come to us with subpar policies. Obviously they have a conversation with you because you're taking care of our group insurance policy.

49:57.79

Sandy

I know that I have a lot of clients who have in the management company who have come to us with subpart policies. Obviously they have a conversation with you because we're taking care of our group insurance policy and I mean it's not even close. They might be getting maybe a little bit more but had there been a loss.

50:09.68

wongga

And I mean it's not even close. They might be paying maybe a little bit more but had there been a loss they wouldn' have had rental coverage. They would have you know had this coinsurance kicking in they would have been out of pocket tens of thousands of dollars right? Yeah and you know when you say you know maybe $60

50:15.30

Sandy

Right? They would have got rental coverage. They would have you know't had this coinsurance kicking in they would have been out of pocket right? tens of thousands of dollars right exactly and you know really when you save you know, maybe $60 a year was it really worth it right? so.

50:29.30

wongga

Here was it really worth bright. Yeah, you know fifty sixty dollars a year I I don't know what just yeah I shake my head so that the takeaways of this podcast episode I would think at least in my eyes are know your policy make sure you have.

50:33.95

Sandy

You know fifty sixty dollars a year I I I don't know I just don't see it. Yeah right shake my head right? The takeaways of this podcast that what I would think at least in my eyes are know your policy sure you have a professional that you're speaking with regularly.

50:48.12

wongga

Ah, professional that you're speaking with regularly and communicating every time There's a change and then that annual review process is so key every year. Yeah, and the other I find like to mention to is looks sometimes not these policies that.

50:52.50

Sandy

Communicating every time There's a change and then annual review process right? So key right? Yeah yeah, and the other thing too I I find and I'd like to mention too is sometimes some of these policies that people have are um.

51:07.46

wongga

Are um, from you know insurance companies that are buy or banks right? I've heard about the bank ones? Yeah, and um I say you know.

51:10.74

Sandy

From you know insurance companies that are either online or from banks right? um written about the bank ones right? And um I say you know not to cheat my own horn. But who are you talking to.

51:26.18

wongga

To you I But who are you talking to in the event of a queen or a review or right? Um, when you need well because essentially if you're buying a policy off the internet you're you're being your own broker. Okay.

51:29.91

Sandy

In the event of a claim or a review or um, when you need them well because essentially if you're buying a policy off the internet you're you're being your own broker right? And what do they say I think it's a lawyer quote.

51:44.85

wongga

And what do they say I think it's a lawyer quote a lawyer that represents themselves has a fool for a client right? I don't know if you've heard that one but it's very similar I mean I don't pretend to know insurance and if I'm just buying a policy off the internet. How am I supposed to know what I don't know. Yeah, that's a great great point is.

51:47.78

Sandy

Lawyer that represents themselves as a fool for a class. Okay and an multi one. No but it's very similar right? I don't pretend to know insurance and if I'm just buying a policy on the internet. How am I supposed to know what I don't know right right? That's a great pretty point right? It is yeah so.

52:04.79

wongga

So and I might get outcome where I can answer the point um is this an actual person. Yeah are please is me because you know I'm there for them. So yeah, you know and and especially for to claim. That's when you need insurance right? So um, that.

52:05.29

Sandy

And and I get that sometimes when I answer the phone they go is this an actual person right? and and and that pleases me because and you know I'm there for them so you know and and especially for a claim because that's when you need insurance right? So um, that that's. And that's what you're buying. Well you know it's funny I I I always advocate for having a power team if you're going to be a real estate investor starting out or you know experienced On. You know your lawyer your accountant's mortgage Broker Maybe a property manager if you're having professionally managed but insurance I mean that.

52:25.27

wongga

You? Well you know it's funny I I I always um, advocate for having a power team if you're going to be a real estate investor starting out or you know experienced and you know your lawyer your accountants mortgage broker maybe a property manager if you're having it professionally managed but insurance. I mean that those you know 4 or 5 people on your team is so key. Yeah, okay, well let's wrap up but um I always ask every guest this question. Um, so you know this is coming.

52:44.90

Sandy

Those you know 4 or 5 people on your team is so key right? I agree for sure. Yeah, okay, well let's wrap up. Okay, um I always ask every guest this question so you know this is coming. This is the investing to win podcast. How do you define success.

52:59.34

wongga

This is the investing to win podcast. How do you Define success and what is winning look like for you. Okay, well I think defining success is doing what I love and helping people either in my perfect are my personal minded.

53:03.79

Sandy

What is winning look like for you. Well I think defining success is doing what I love and I'm to helping people either in my profession or my personal life. It is setting goals that I. Am able to achieve and feel good about achieving them and winning for me is knowing that I've done everything that I can to find the right solution for every situation that has been presented to me. Not only did I find the right solution but I've made someone else happy as a result.

53:22.52

wongga

And waiting for cake is going in effect on everything but then I can to find the right solution for every situation that has been presented to me. Not only did I find the right solution but I made someone else happy.

53:38.92

Sandy

And I've taken away something from that experience and that has helped me to grow to be a better person. Nice No I Love it. Thank you No that that is great. You've served us Well I think in ah in pre-show we were trying to calculate how long we've known each other because.

53:39.30

wongga

Experience and that grow a better first nice no I love it. Yeah, no that that is great. You ah you've served us well I think in the in pre-show we were trying to calculate how long we've known each other because ah. For the audience I have followed ah Sandy from broker to brokers throughout her career just because of the service that you've given me so um, thank you for that. Obviously we're continue to work together and thank you for coming to the studio and and doing this with me. It's been great.

53:55.76

Sandy

The audience I have followed Sandy from Brokers to brokers throughout your career just because of the service that you've given me so um, thank you for that. Obviously thank you to work together and thank you for coming to the studio and it's been my pleasure. It's been a great. Been my pleasure. Thank you so much all right? We'll talk to you soon. Thank you.

54:13.68

wongga

All right? We'll talk to you soon.