Business
In episode 6 of Profitable Powerhouse Properties your hosts Jonathan Cook and Bryan Jenkins talk to Richard Davis and Jason Henderson of the Birmingham Insurance Group (BIG). Richard and Jason launched BIG back in July of 2018 and have partnered with AHI. Learn about Episode Highlights: Anyone with an insurance license can send you a policy, but BIG will make a team effort to protect your assets comprehensively. BIG can offer coverage in all 50 states, and they have clients internationally. You don’t have to use AHI Properties to use BIG for Insurance. Why investment coverage is different from standard homeowners insurance. When you put a tenant in your property, make sure that they have tenant insurance. Many property management companies don’t enforce tenant insurance, but that backfires in many situations. Renters policies defend not only the renter but also the owner on behalf. The reality is that on C-F grade properties there will be more claims. BIG represents multiple carriers depending on the state and the grade of the property. It’s possible to do a per-location liability limit with an independent stand-alone limit. By separating business from personal, your losses won’t impact the rate on your personal properties. BIG insurance policies include loss of rent on properties up to $75,000 a month - this does not include evictions. Who needs a flood policy and why - if you’re in a flood zone the lender may require it. BIG does a thorough review of your needs or budget to be sure that you’re not insurance poor but you get the coverage you need. You could spend thousands of dollars between foundation leaks and sewer backups. The difference between preventative maintenance and risk management. What valuation is on a property and how it’s determined. To estimate your premiums on properties in Alabama - on the low end $85 a square foot, on the high end $125 a square foot. Someone new to investment ownership needs to talk to an agent about how much to cover their home for. The rubber meets the road when the claim happens, people are stressed, and money’s involved. What to look for in your policy:Coverage limits Deductible structure Liability Limits The information you gave the agent to rate your property Share your current policy information The benefits of a master policy format - reporting form or an annual policy.There is no exclusion for a vacancy. You will only be charged for the properties you have scheduled on your policy. Each master policy is a 12-month policy. Each policy stands alone and you can add and remove them throughout the year. How the insurance company uses the law of large numbers and why it works in your favor. Why AHI requires that vendors that do work on the property have certain limits of coverage. From a risk management standpoint, we need to make sure that what you’re signing dovetails with what the policy says. Insurance, risk management, and property management are a part of preparing for positive cash flow. If something is not covered, then it’s not going to hurt your rates so file the claim. Key Points: The difference in an investment program and a homeowners policy is the volume and the amount of coverage you’re getting. A benefit of separating your investment properties from your personal properties is that your losses won’t impact your personal rate. Preventative maintenance is doing your due diligence and risk management is your plan when something does occur. Tweetable Quotes: “Investment insurance provides another layer of protection for both the tenant and the owner.” -Jason “It’s possible to be insurance poor, we want to avoid that happening.” -Jason “Know your market, and know where you’re buying - that will help dictate what you need to be insured for.” -Jonathan “If it were my rental property, I wouldn’t go below valuing it at below $100 a square foot.” -Richard “Diversify your portfolio, but not your insurance.” -Jonathan “If something is not covered, it’s not going to hurt your rates.” -Richard Resources Mentioned: Check out our website ahiproperties.com Check out Birmingham Insurance Group