Choosing the RIGHT Insurance For Your Multifamily Property w/ Dan Kaderka

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Money Monday$ with Dan Kaderka from the Strategic Insurance Group! Learn how to choose the RIGHT Insurance for Your Multifamily Property.

We will be covering in this Money Monday$:

-When multiple agents submit apps, it blocks the market.

-Blanket coverage vs individually scheduled buildings?

-Exclusions to look out for with other agents.

VIDEO TRANSCRIPTION

00:00
do this every monday 3 30 central and as
00:02
you guys can tell you got
00:04
ben myself and we have a guest speaker
00:06
today so we you know for those of you
00:08
tuning for the first time
00:09
we talk about all sorts of different
00:10
topics from anything you know try to
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keep it in the real estate space
00:13
specifically more on the multi-family
00:15
space
00:15
but we’re happy to talk about any topic
00:17
people want to talk about so if you have
00:18
future topics let us know
00:20
but we figured we’d talk about insurance
00:22
and who better
00:23
talk about insurance than kind of
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texas’s number one multi-family
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internship number two
00:27
number two we’re gonna be number one for
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those of you who don’t know dan kadurka
00:32
he’s a great guy great guy he’s got
00:34
funny stories if you really want to hear
00:36
some funny stuff take him out to go grab
00:37
your lunch sometime and
00:39
he’ll tell you all sorts of stuff so
00:40
yeah welcome to the show thank you
00:42
thank you yeah man yeah so folks just to
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reiterate right you know this is an
00:46
interactive show we want everybody to
00:48
ask questions right and i won’t get into
00:51
the types of questions that you know you
00:52
guys could ask and obviously ask how i
00:54
lost my hair right and i’m going to say
00:55
because of this guy right here stressing
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me out all the time
00:58
you know we wouldn’t figure advice we’re
01:00
gonna bring someone else you know
01:01
attractive we don’t have
01:02
money money days without that joke so i
01:04
had to throw it in there and just you
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know
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um well i’m sorry you said money mondays
01:08
it is money money you check
01:09
your email i’d send an invoice for my
01:11
appearance yeah
01:12
it might kick me into another tax
01:14
bracket so if you have to pay
01:17
he’s trying to look for in a tax
01:18
write-off so all right where’s rock to
01:20
pay that you know
01:22
yeah but no man what’s up dan thanks man
01:25
it’s our first time having a guest on
01:27
the show
01:28
you know love to have our friend our
01:30
business partner hopefully i can set the
01:31
bar
01:32
for others you got to set the bar up
01:33
very high for people man oh no
01:35
that’ll be easy yeah so maybe tell us a
01:38
little bit about yourself so he’s a big
01:39
car enthusiast so you know it’s a good
01:41
way to go
01:42
this guy has got the coolest car
01:44
collection but we won’t get into that
01:46
you know we have a few uh a few a little
01:49
about me
01:49
uh mom’s 46-year state farm agent i grew
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up in the business uh
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was raiding cars back in 85 with uh
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when they came out with an echo system
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which was dull space you know what that
02:01
is
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yeah uh well i do he’s too young for all
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that stuff
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trash cans filing that sort of thing and
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went off to college got a master’s
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degree
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in physical therapy realized that
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insurance is what i knew so i went back
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to insurance again worked for state farm
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branched out to do commercial insurance
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uh and that’s what i’m doing now
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focus only on multi-family and you’re
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another ut grad
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i feel like i’m surrounded by you i
02:30
don’t know why you didn’t wear burnt
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orange dan has a whole collection of
02:33
burnt orange polos he likes to send us
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pictures of his closets
02:37
i’m a third generation longhorn and my
02:39
dad said when i was
02:40
picking college he said son you can go
02:42
to any school you want
02:44
ut austin’s only one i’m paying for so
02:46
pretty much made the decision yeah there
02:47
you go there you go well i can think of
02:49
worse colleges to go to man i went to
02:50
texas tech
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you know you know didn’t we just play
02:53
guy you’re disappointing all the texas
02:54
tech people
02:55
what about what about those aggie people
02:57
like okay that’s too easy for you guys
02:59
you know i’m trying to throw somebody
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else under the bus here man so
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you got out of ut so physical therapy
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you said hey you know i’m not really
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feeling that so you go back to the
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insurance world
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right but you’re doing the state farm
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racket there for a little while it’s
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been a state farm for a while
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and uh there was a guy that uh was the
03:16
number 10
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uh commercial insurance producer out of
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17
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500 state farm agents who wrote
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multi-family really and i actually knew
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him
03:27
from the 80s that he was an agent that
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came over to my mom’s but he’d come in
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and he told me that i was
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selling myself short and i should be
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focusing on apartment complexes
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and he would come over and train me and
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so i slowly started to learn how to do
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apartment complexes and it’s a lot
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different than you think
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doing apartment complexes uh if you
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think
03:52
that calling three agents out of the
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phone book is doing your
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investors a good uh service and going
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with the lowest bid you’re
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completely wrong let’s talk about that
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right so as a buyer
04:03
a first-time buyer they think it’s just
04:05
like your house i’m gonna go bid it out
04:07
figure out the best price and bring it
04:08
back can you explain to people
04:11
how it works and how they should behave
04:14
really right you know kind of what’s the
04:15
right way to do it and kind of how it
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impacts both them and you
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absolutely so when you call around to an
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agent and the agent says i got 20 30 40
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years experience you need to ask them is
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that 20 30
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40 years of doing it wrong what does
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that mean exactly when it comes to
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you’ve got that experience you got to
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understand all of these agents are
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contracted with brokerages okay
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and we’re all going to so a lot of us
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are going to the same brokerages
04:40
there’s hundreds of them i like to use
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the largest brokerages in the nation and
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i’ll get to exactly why
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but essentially when you call me and say
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i want you to quote this apartment
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complex i’m not logging into a computer
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like
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a state farm and quoting your car
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insurance and spitting out a rate
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i’m going to a brokerage and i’m going
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okay this risk is in pasadena texas so
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i’m going over there
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and i’m going to go which here’s where
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the experience comes in okay which
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brokerage places the most business over
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there with which programs
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they the the brokerage it’s so you’re
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dealing with me i’m the retail agent i’m
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dealing with the brokerage which is the
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insurance broker
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they have the contract with the
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insurance companies and the programs to
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place the business
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um and years ago i realized i was
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dealing with one brokerage a lot of
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agents only deal with one brokerage and
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i kept
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when i was starving for business i
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realized that i was about 30 percent
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higher than every other agent when i was
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bidding on stuff and i was like why i
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kept going to the brokers was why
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so finally i called another brokerage
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got quotes from them and i said well hey
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hold on now
05:40
you guys are going to the same programs
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your pricing
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is different than this one well come to
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find out that those programs look at
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the volume that that brokerage places
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with that program or that carrier
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they look at quote to buying ratio if
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they send in a 100 quote request and
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buying 10 that’s bad
05:58
okay if this guy sends it if this if
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this broker sends in 100 that program
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and binds 90 that’s good then they look
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at out of that 90 how many are turning
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in claims if 89 are turning in claims
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these programs don’t want to do business
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with them they’re going to bid it up
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gotcha so they’re almost always they’re
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trying to price it out of the market
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right because they don’t want they don’t
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want to deal with that agent or that
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broker
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deal exactly exactly so let’s slow down
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for a second so people to realize right
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you’re an agent
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you have contracts with different
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brokerages the broker desire will kind
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of provide
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the conduit to that policy correct and
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so
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a big metric for you as an agent is
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quote to bind so how many guys like us
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have asked you for quotes that actually
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turned into business correct right and
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so you really care about that
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and any good agent would right because
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it’s going to help you get the best
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price the best
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the best treatment as well correct so
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not only does
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the brokerage they’re they’re getting
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pricing based on their quote to buying
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ratio with the insurance companies
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but they’re also looking back at the
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agent and looking when i send in if i
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send in 30 quote requests how many do i
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buy
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so i i will not i learned a while when i
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send in a quote request to take 30 days
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to get a damn quote
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that’s not acceptable come to find out i
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was sending in a quote request for
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everybody that walked through my door
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can’t do that what i then started doing
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is i started calling around a brokerage
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and saying look at this address
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what in the last 30 to 60 days have you
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uh what what rate per 100 are you seeing
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from all of your programs
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in this area and they’ll give me a rate
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spread say 0.5 to 0.6 okay okay
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then i’ll call another broker they’re
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saying 0.55 to 0.65 then i’ll call
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another brokerage then i can go in and i
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recreated some
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uh i worked my way back into the rates
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uh in in a spreadsheet and i’m able to
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produce what their rate spread would be
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if i were to submit it assuming that
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it’s got clean loss history
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um but then i was able to produce to see
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what rate spread
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it would be for each of the different
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brokerages and i hand that to the client
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if the client
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is under contract and they’re using me
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or it’s renewal then now i know which
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brokerage to go place
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to try to get business place with
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because they’re getting the best
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rate right now gotcha because things
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fluctuate right it fluctuates yeah i
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mean that’s what we’ve noticed obviously
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working with you is that it’s not
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that program that you might have gotten
08:09
us on for that one property last year
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might not even be around anymore
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right exactly exactly and it doesn’t
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then it gets a little more complicated
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than that
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every brokerage has multiple offices
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like for example i think burns and
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wilcox has 150 something offices
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i found that if i send a quote request
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to different offices i’m getting
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different rate let’s use gl for example
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uh if we use the companies say western
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world okay
08:35
if i send it to four different offices i
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noticed it’s getting four different
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rates why is that
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because i don’t know either okay but i
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do know
08:45
the true question then you weren’t
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supposed to answer that you could leave
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it rhetorical
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no i but what i’m realizing is that
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different offices give different rates
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for different companies
08:56
and whether it be their quote to buying
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ratio whether it be they have the power
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of the pen meaning that they can
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actually authorize a quote to me without
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going back to the carrier to get it
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confirmed i don’t know but that’s where
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that 20 years experience if an agent
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says i’ve got 20 years experience well
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what does that entail that tells
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for me to say i’ve got 20 years
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experience when in actuality when we get
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down to the apartments if you want to
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look at the last five that’s the most
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critical
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i can sit there and go well even in the
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last year i’ve been going to all these
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different offices and multiple
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brokerages and there’s
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dozens of them and i’m knowing which
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offices and which brokerages
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for which companies that i want to use
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and which programs
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are giving the best pricing and of
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course
09:40
that’s being that all all variables are
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equal between so i’m asking for the
09:43
exact same coverages between each one
09:46
same deductibles for each one so let’s
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how does good
09:49
well i was going to say so for those
09:50
listening how much how much do you
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insure so people can understand just how
09:54
how many apartments you’ve seen and what
09:56
do you do i’ve been kind of massive it’s
09:57
in the thousands
09:58
yeah so i mean dan clearly has got a big
10:01
role he’s kind of talking to
10:02
pulling back the onion a little bit of
10:03
what happens there so for those who tune
10:05
in first time monday mondays with this
10:06
every monday 3 30 central
10:08
we you know talk about all sorts of
10:10
different topics this week we’re talking
10:11
about commercial insurance with no one
10:13
no less than dan kadurika so you know
10:15
for those that want other topics let us
10:17
know for the future
10:18
and again a big part of the show is just
10:19
doing live q a so if you have questions
10:22
you know go ahead and comment at the
10:23
bottom we’ll happen to talk through them
10:24
just kind of flipping through these
10:25
really quick ronnie says what’s up
10:27
and he says you know where’s the plaid i
10:29
know man i know
10:33
we’re all too paranoid because ronnie
10:35
always realizes we wear too much platter
10:36
on here
10:37
um savion says what’s up and uh he says
10:40
he went to texas tech as well
10:42
oh wow i only went there for one year so
10:45
i always just kind of bash on it i just
10:46
didn’t really like lobbying texas sex in
10:48
grade school
10:49
and uh let’s see so ronnie says
10:50
community college is the way to go
10:52
fair enough and uh ronnie says don’t get
10:56
dan
10:56
into y’all starbucks have it no dan has
10:58
a much
11:00
better habit i would say cars okay he
11:03
also does not need cars
11:04
at starbucks i’ll take that so that’s
11:07
that so let’s kind of keep going down
11:08
the story
11:09
so your talk you know rate is a big
11:11
reason of why
11:13
we go on the brokerage right but really
11:15
in addition to that what else you know a
11:16
big reason we use is not just rate
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but also just making sure that you know
11:20
cya
11:22
cya yeah you cover us right across
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anything happens so
11:25
what are the things that people need to
11:27
maybe understand a little bit about
11:28
quotes and how to compare quotes
11:30
yeah so one of the things is that you’ve
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got to look for what is actually covered
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by these policies
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so if you’re going to go out if you guys
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are going to go out say y’all call me
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i’m an investor and y’all go hey man i
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want
11:42
500 grand of your money to invest in
11:43
this apartment complex yes
11:45
my question to you is how how are you
11:47
going to make sure that when the
11:48
when the hits the fan you’re going
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to protect my 500
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000. well that’s going to fall back on
11:53
your insurance okay so let’s just say
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that you’ve got
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you’ve got aluminum wiring all right
12:00
and you’ve got a fire
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burns down a building and a kid is a kid
12:06
is injured in the fire
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god forbid are you covered mm-hmm
12:11
are you it depends on if they’re they’re
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going to cover aluminum is aluminum
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wiring excluded by the policy
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is there a warranty that states that the
12:18
aluminum wiring has to be
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protected yep pigtailed or is it just
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flat out excluded a lot of times it’s
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just flat out excluded
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if the agent doesn’t disclose
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on the application to the insurance
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company
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that’s aluminum wiring and a lot of them
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don’t nine times out of ten just to
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cover their butt the insurance company
12:37
is going to issue a quote and put
12:40
exclusion warranty fire by aluminum
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wiring is excluded
12:44
is that pretty is that pretty common
12:46
though is that that one of the most
12:47
common exclusions
12:49
that that is on property yes okay now
12:51
you’re dealing with the child that got
12:52
burned
12:53
okay same thing is is is bodily injury
12:57
by the peril of fire due to
12:58
aluminum wiring covered
13:01
i don’t know i guess you got to find
13:03
that out from your agent well if your
13:05
agent
13:05
hasn’t is not explaining this stuff to
13:07
you maybe they’re not showing you that
13:08
it’s excluded
13:09
yeah um it’s very important to know if
13:11
if there is aluminum wiring and it’s
13:13
very important to know
13:14
if it’s protected and how it’s protected
13:17
some companies will come in and
13:18
dictate that if it’s not the lumicon
13:21
which is the
13:22
the purple little wing nuts then
13:25
they won’t they won’t accept you may
13:26
have the color receptacles they won’t
13:28
accept it
13:30
there is an interesting thing that i saw
13:32
in a policy
13:34
once before and it said that the peril
13:36
of
13:37
fire is excluded
13:41
if there is the presence of aluminum
13:44
wiring
13:45
what does that mean that means that if a
13:46
barbecue pit burns the place down and
13:48
they go out there and see aluminum
13:50
wiring in the wall the barbecue pit that
13:52
burned the place down is not covered
13:55
that’s that’s kind of messed up you know
13:58
you go with the lowest bidder you get
13:59
what you pay for
14:00
so you got to have i know you’ve
14:03
explained some of this stuff to us right
14:05
so what are some of the major kind of
14:06
inclusions that you always include
14:09
you know just just because you have been
14:10
in the business for 20 years
14:12
you know better than us as as sponsors
14:15
as to what we need to have in insurance
14:17
policy right so
14:18
in the gl and for those of you that are
14:20
buying looking to buy this is important
14:22
listen up take notes these are the
14:24
things that you want to make sure that
14:25
your policy has
14:26
yeah you don’t want there to be an
14:28
exclusion for assault and battery
14:30
you don’t want there via firearms
14:32
exclusion now
14:34
a lot of times they’ll tell you an agent
14:36
will tell you that firearms is
14:37
included but their assault and battery
14:40
is excluded or supplement
14:42
well someone pulling a firearm is an
14:44
assault and battery
14:45
so if they give you firearms but they
14:46
tell you salt and batteries excluded
14:48
don’t think that’s just a fist fight
14:49
someone pulls out a firearm and shoots
14:51
someone that’s going to be excluded by
14:52
assault and battery even though firearms
14:54
is still included okay
14:56
so assault and battery you know what
14:57
that excluded firearms you know what
14:59
that excluded
15:00
animals you don’t want that excluded now
15:02
a lot of companies will differentiate
15:04
and say you can’t have certain breeds
15:05
you don’t want that either
15:07
okay you don’t want that either just in
15:08
general no animals excluded
15:11
rape and murder you don’t want that
15:12
excluded because some companies will go
15:14
in the definition of assault and battery
15:16
and they’ll exclude rape
15:18
okay or they’ll exclude murder but
15:20
they’ll usually exclude firearms on that
15:22
as well
15:24
child abuse and molestation you don’t
15:26
want that excluded either
15:27
now a lot of y’all are going how does
15:30
that have anything to do with it
15:32
okay well let me give you an example you
15:33
got 400 units
15:35
okay do you know what that goes on in
15:36
all 400 no no all right let’s say unit
15:39
119
15:40
he’s he’s got underage prostitutes in
15:42
there
15:43
and he gets busted and a couple of the
15:45
tenants
15:46
told the management company he’s running
15:48
15 year old girls through there
15:50
and let’s say the daddy is ross pro or
15:53
since ross bro passed another wealthy
15:55
guy and he says you know what
15:56
my my daughter was in there and no one
15:58
knew about this
15:59
y’all didn’t say nothing and he comes
16:01
after whoever owns the property
16:02
obviously you don’t that actually
16:04
happens
16:04
stuff like that happens so salt battery
16:07
firearms
16:08
uh sexual abuse and molestation animal
16:11
rape and murder
16:12
i won’t write a policy that has any of
16:13
that so you just automatically always
16:15
include that
16:16
whereas other agents aren’t probably
16:19
including most of that right
16:20
it when i see when when
16:23
nine times out of ten when someone is
16:25
referred to me it’s usually because
16:27
they’re unhappy with their agent and i
16:30
always say give me a copy of the
16:31
policies
16:32
that they have written i will tell you
16:34
if your agent is doing their job or not
16:36
and when i get these things and i start
16:38
going through them and i’m seeing these
16:39
things and i’m going
16:40
did you know any of this was excluded
16:42
that i didn’t even know
16:43
what that was you know it wasn’t
16:45
explained to him no i mean it’s
16:47
important until we started working with
16:48
you man i didn’t know how about any of
16:49
this stuff nobody nobody
16:50
i want to explain this you just think
16:52
it’s one size fits all it really is and
16:54
that’s why we kind of started off with
16:55
like
16:56
don’t always just go with the lowest
16:57
bidder right because you know there
16:59
there’s there’s reasons why they might
17:01
have had a lower cost right that some of
17:02
this stuff’s probably excluded
17:04
or they’re or they’re jacking up
17:06
deductibles and not even telling their
17:07
clients about it right
17:09
you know i mean there’s some other shady
17:10
stuff that happens in this industry well
17:12
okay
17:12
don’t think that the insurance company
17:14
is giving you a break on the price
17:16
by exclusion and i had this conversation
17:18
with another client who called me and
17:20
said
17:21
he goes can we exclude assault and
17:22
battery and lower the price and i said
17:24
first of all
17:25
no i will not i will not exclude that on
17:28
any of your
17:29
locations because you need it and second
17:31
of all they don’t lower the price
17:33
the insurance company if they can slip
17:35
these exclusions in and charge you the
17:37
same price
17:38
then they’re d they’re decreasing their
17:40
risk i don’t mean they’re
17:42
profiting more right on the back end
17:44
correct correct now
17:45
where these were where if if anybody
17:48
whose own department complex has seen
17:50
where excluding
17:52
or limiting changes the price you’re
17:55
going to the wrong company
17:58
you don’t need to be dealing with an
17:59
insurance company that’s going to sit
18:00
there and go
18:01
we’re going to give you a 25 000 sublime
18:03
assault and battery and if you want to
18:05
pay us another 3 000 we’re going to
18:06
we’ll jack that up to half a million
18:08
you’re going to the wrong company um and
18:10
and how do they come up with that well
18:12
each company runs a crime stat based on
18:15
whatever database they pull from
18:16
honestly i’ve never been able to get an
18:18
answer on that i think what they do is
18:20
they look at the claims that they’ve had
18:22
for that particular zip code and they
18:24
base it on that because one company will
18:25
sit there and tell me i got a crime
18:26
score of a 15 the other one will say 60
18:28
for the same zip code
18:30
that company will give me an exclusion
18:32
and no demand the other one will say you
18:33
know we’re not going to exclude anything
18:35
you just got to go to another company
18:36
i’ve got i deal with four different
18:38
brokerages that i’ve identified
18:40
who i think has they have access to all
18:43
their large brokerages they have access
18:44
to all the reputable companies on gl
18:46
totally about 30 different companies
18:48
i have my favorite gl companies i start
18:50
going with okay
18:51
as if if those companies are declining
18:54
to quote for something they don’t like
18:55
about
18:56
the risk if there’s bad claim history or
18:58
if they pull their crime stat and they
18:59
don’t like it then i move to the next
19:01
company and i go down my list
19:03
it is rare that i will go and literally
19:05
go to all four brokerages shopping but
19:07
eventually i will
19:08
find a policy that i will give to my
19:10
client
19:11
and what you’ll see is we may start at 8
19:13
000 and we get up to 15
19:15
sometimes okay but in that in doing so
19:18
i’ve made sure that all those exclusions
19:20
you’ve covered all the risks covered
19:21
exactly kind of your job right right and
19:23
then you go back to the guy that you
19:25
just
19:25
want his half million dollar check to
19:27
invest in the place and say we’re gonna
19:29
spend about eight grand more but i
19:30
guarantee none of this is going to be
19:32
excluded yeah yeah
19:34
on the multi-million dollar property one
19:35
two thousand dollars was money well
19:37
spent right right exactly it’s better to
19:38
be well covered so you know
19:40
if you have that freak accident where it
19:42
helds while a person’s carrying a really
19:44
hot coffee and then the hell hits their
19:46
head and they spill
19:47
and then you know another person’s
19:49
walking by and they the whole shebang
19:50
it’s covered
19:52
and i’d like to i’d like to really kind
19:53
of have a personal story because you
19:54
know this is i mean
19:55
we’ve known each other for about five
19:57
years you know
19:58
dan comes at insurance ver very from a
20:01
consultative approach right he’s not the
20:03
state farm
20:04
trying to run numbers type guy right you
20:05
take care of all your clients and i’m
20:06
going to give people
20:07
a real life experience not a vendor
20:10
you’re not a vendor right you’re a
20:11
partner
20:11
in the whole process right you know just
20:13
like a mortgage broker or just like your
20:15
your lawyer your cpa right
20:17
you know dan and is doing you know the
20:20
part for the insurance but
20:21
one one specific uh story that i have
20:24
was during hurricane harvey right some
20:25
people know this story i won’t get into
20:27
it too too much but
20:28
you know one of the properties that we
20:29
owned flooded and i didn’t know what the
20:31
heck was going on right
20:32
you know personally we had some some how
20:34
to do it i never do
20:36
know what the hell is going on but
20:37
anyway we had the property was flooding
20:40
um you know i had my stuff happening
20:42
here in houston that was flooding as
20:43
well so i was running around with my
20:44
head chopped off
20:45
i i went to han or went to dan had in
20:47
hand and said hey
20:48
help me out man what do i do right he
20:50
walked me through the whole entire
20:52
process
20:52
all the way up to sitting on the phone
20:54
for six hours with fema
20:56
and helping us get the right amount of
20:58
inspectors out there not the 15 guys
21:00
that they wanted to initially
21:02
send you got it down to three well they
21:04
okay with fema every building has its
21:06
own policy
21:07
and their system auto assigns an
21:09
adjuster for every building you got a 40
21:11
building complex you can have 40
21:12
adjusters
21:13
you think they would be more organized
21:15
than that but i’ll just say the word
21:16
word government
21:17
okay uh so i was on the phone and was
21:20
able to consolidate to a customer yeah
21:22
and that’s pretty good but you know i
21:23
mean i was on hold a lot
21:25
no yeah but still man you spent you
21:27
spent a better part of your day
21:28
just helping one client with one
21:30
property right and he’s got dozens of
21:32
properties and dozens of clients right
21:33
so
21:34
that’s how much he cares about our
21:35
success and so that’s you know that’s a
21:37
personal story that you know
21:38
and and he won me as a client for the
21:39
rest of my life because of that and
21:41
what he did for us so you know but
21:43
that’s that’s that’s huge right because
21:45
if you
21:45
if you think about it you’re an
21:47
insurance guy can you even get him on
21:48
the phone
21:49
let alone expect him to sit on the phone
21:51
with fema a government agency for six
21:53
hours
21:53
i doubt it right you know that’s how i
21:56
kind of look at it man
21:57
the best advice that i can tell anybody
21:58
is this
22:00
whenever your agent slides you a quote i
22:03
don’t care if you have sticker shock or
22:04
not
22:05
look straight down and go why is it so
22:07
cheap you would be
22:09
shocked at all the things he starts
22:11
telling you we can add back
22:12
that you thought was automatically built
22:14
in that quote well we can get that
22:16
million dollar deductible down to half a
22:17
million if you want to
22:18
i’m sorry i had a million dollar what
22:22
but let’s talk about that right you know
22:23
that’s a big thing right you know
22:25
playing around with those deductibles
22:26
that can change the price
22:28
right it it it can it can
22:31
um my philosophy is this i always
22:34
structure it to where it is the policy
22:36
minimum deductibles therefore there is
22:37
no argument
22:38
as to why is my deductible so high
22:42
yep and i just guess you can get it
22:43
period i just i and
22:45
and you’d be shocked the cost difference
22:47
to go from
22:49
you know a small deductible to
22:50
catastrophic is
22:52
is not as big as you think you need to
22:54
build that in and the other thing too is
22:56
on the percentage deductibles
22:57
if if particularly houston okay um
23:01
you you don’t you really want it to be
23:03
per building and not per
23:04
tiv um but tell us a little bit about
23:07
that because that’s important right
23:08
you know because remember folks right
23:10
insurance is kind of it’s
23:12
it’s an expense until you need it right
23:15
so you need to have the right that’s
23:16
what we’re trying to drill in
23:17
everybody’s head today is that you need
23:18
to have the right insurance
23:19
not just have insurance right so talk to
23:21
us about why you structure it that way
23:24
well but before we do that really quick
23:26
monday mondays do this every monday 3 30
23:28
central
23:28
if you have any comments questions
23:30
please go ahead and leave them we’re
23:30
going to do a live q a here shortly
23:32
and you know we’re talking insurance
23:33
we’re having to talk about all sorts of
23:35
different topics
23:36
if you have any suggestions let us know
23:37
but kind of going through uh
23:39
iggy says what’s up what’s up david and
23:42
let’s see ronnie says
23:44
dan you should do a multi-family car
23:46
meetup
23:47
oh don’t know what that really is you
23:49
know we can bring all the multi-found
23:51
people in their car
23:52
everybody just wants to see your car
23:53
collection dude that’s the whole thing
23:54
man yeah
23:55
he’s got a new car that he’s getting as
23:57
well he hasn’t told us about so we’re
23:58
curious what that one is we’re gonna
24:00
find out very soon so we’re gonna we
24:01
have to let everybody know once he
24:02
finally tells us but all right
24:04
back to my question so what do you say
24:05
we’ve got five more minutes people so if
24:07
you have questions comments put them
24:08
sooner than later yeah okay so in in
24:09
houston in particular
24:12
when when a storm hits nine times out of
24:14
ten every single building’s not going to
24:16
be damaged okay
24:17
okay if you’ve got 40 buildings the way
24:20
that they
24:20
they sit you may get the front half of
24:23
them get
24:23
hit and then the back half don’t get hit
24:26
if you have a percentage deductible for
24:28
the entire value of all of the buildings
24:31
and you’re only trying to fix the front
24:32
nine you’re screwed
24:34
yep the deductible lowers itself per
24:37
basis of the fact that you’re only
24:38
turning in a claim for nine buildings
24:40
and not
24:40
40. okay now in north texas it’s a lot
24:43
different
24:43
they deal with hail storms right a hell
24:45
storm’s going to hit every building it
24:46
really doesn’t matter
24:47
if it’s if it’s a percentage per
24:49
building and you’ve got 40 buildings and
24:50
every one of them gets
24:52
hit by a hail storm then it’s really
24:54
you’re doing a percentage per
24:55
the entire schedule but in houston in
24:57
particular you definitely want to
24:58
itemize those out
24:59
gotcha gotcha all right so it ends up
25:02
being more cost effective for the client
25:04
to do that
25:04
in terms of their out of pocket when a
25:06
claim comes i honestly in in all my
25:08
years of doing insurance i’ve never seen
25:10
a large apartment complex every building
25:12
hit ever
25:13
no i mean you’re just it’s not even even
25:15
a hurricane right you might have you
25:16
might have wind storm damage on
25:18
this side you might have a little bit of
25:20
flooding over here right but ultimately
25:21
the whole entire property is not going
25:22
to just blow over
25:24
it i’ve never seen it happen well knock
25:27
on wood uh
25:28
if you’re on the coast obviously i’m
25:29
talking more
25:31
saw that picture of the whole hotel in
25:33
lake charles
25:34
all the glass is destroyed on that yeah
25:37
you gotta hate to be that you got to be
25:38
hate to be the owner of that thing right
25:39
you know well on if he’s insured
25:41
properly or not
25:42
that’s true that’s very true of that
25:45
thing right
25:46
i had a so the glass has been needing to
25:48
get replaced oh
25:49
now that’s a capex fixed insurance let’s
25:51
just bind that to the gun shirt so
25:53
yeah i’ll tell y’all a small quick funny
25:55
story um
25:56
when i first started doing multi-family
25:59
many many years ago
26:01
and i honestly didn’t know what i was
26:02
doing i aired on the side of caution
26:05
and i had a client with 36 unit mid-rise
26:07
that he just built
26:09
and he literally just finished building
26:11
it and i’m sitting there and i don’t
26:13
like
26:14
i don’t know what to insure this thing
26:15
for so i just came up with the number
26:17
and insured it and right after he
26:20
finished it he leased all the units this
26:22
gal was driving down the street she
26:23
pulls her
26:24
car with smoking she pulls her car
26:25
underneath it car catches on fire
26:28
uh catches all the insulation on fire
26:32
and it basically turns the whole base of
26:34
the building into a frying pan and it
26:36
melts all the pecs plumbing which
26:38
flooded the whole building and this
26:39
whole thing just was a total loss
26:42
and uh the we’re going through the the
26:44
uh
26:45
the claim process and the client calls
26:47
me on conference call and he goes
26:49
how did you come up with your building
26:51
value and and here i am shaking like a
26:54
leaf thinking oh god this guy is going
26:55
to sue me it ain’t enough money he goes
26:57
i said well that’s just based on years
26:59
of experience of what i would
27:01
think that the replacement costs would
27:03
be and he goes well you’re way off
27:07
and i was like oh this is not good and
27:10
he goes
27:10
we want to know where we can take you to
27:12
lunch uh
27:14
the insurance company is picking a nice
27:15
place the insurance company has given us
27:18
2.7 million more than it cost us to
27:20
build it and they said it’s our money
27:22
hey and i was like yeah well it’s going
27:25
to be somewhere nice
27:28
so you didn’t go to the mcdonald’s you
27:29
went down to the cece’s pizza
27:31
oh cinnamon
27:36
he’s talked about this multiple times
27:38
yeah yeah awesome nah man so that’s that
27:40
that’s what it’s based on the experience
27:41
right
27:41
you know and so that’s what having the
27:43
right yeah and
27:44
in 40 years experience 20 years 30 years
27:47
whatever your agent tells you
27:48
that’s great but if he passes you off to
27:51
a secretary
27:52
or an assistant that doesn’t have any
27:54
experience or not do
27:55
doing any any service whatsoever no
27:57
absolutely man
27:58
absolutely all right so how can people
28:00
get a hold of you really quick
28:02
well uh smoke signals are great
28:06
dan at strategic insurer.com so probably
28:09
the best way to get a hold of him
28:11
you want his cell phone number you know
28:12
email me it’s up for grabs for the
28:14
highest bidder
28:16
fun guy to talk to so you know i’m gonna
28:18
keep that one for myself so
28:19
um so if anyone has any questions go
28:20
ahead and drop them or you know happen
28:22
to go through do live q and a
28:23
and you know feel free to pick dan and
28:25
his brain for all the information he
28:27
knows
28:28
yeah and you know what i mean for those
28:30
as well so one other thing we’ve been
28:31
working on with dan is basically helping
28:32
automate that policy process right
28:34
so we do have a tool
28:36
quote.strategicinsure.com
28:37
if you’re looking at deals in dfw or
28:39
houston kind of you really have texas
28:41
msas
28:41
right try to give the tool shot it will
28:44
pretty much automatically
28:45
generate what that price is and it’s
28:47
plus or minus within like 100
28:49
right of what we think the value is
28:50
going to be yeah let me explain that so
28:52
if you go to the tool
28:53
and plug it in what that will do on the
28:56
same day quote is that we’re estimating
28:58
going on a master schedule that we place
29:00
business on particularly in north texas
29:03
um right now the rate per 100 is the
29:05
most competitive it’s fannie freddie
29:07
compliant
29:08
all the bells and whistles policy
29:10
minimum deductibles you name it now
29:12
if you’re looking at say houston um and
29:15
and i’m staying away from everything
29:16
coastal because that’s that’s a whole
29:17
other beast but if you’re thinking about
29:19
houston
29:19
san antonio any other any other place in
29:22
texas
29:24
keep in mind that we won’t get that back
29:26
to you same day but
29:27
it does populate when you put the
29:29
information in it does populate all my
29:31
raiders
29:32
for all everywhere else and i can go in
29:34
and and come up with ball parks
29:35
but still man we’ve you know before i
29:37
came across you i’ve waited weeks
29:39
right so yeah even if it’s a couple days
29:41
right well you kind of fine tune those
29:42
numbers that’s
29:43
that’s it’s still pretty quick you know
29:45
and there’s actually been a couple
29:46
places that just never even got back to
29:47
us oh yeah
29:48
yeah well i mean for the most part if
29:50
you’re sticking into areas that i
29:52
primarily write i know what the rate
29:53
spread is it takes two seconds and a lot
29:55
of my writers already have the rate the
29:57
correct rate plugged into it
29:58
it’s just a matter of manually
30:00
extrapolating and emailing it back
30:02
yeah absolutely absolutely all right all
30:05
right
30:06
well we wanted we
30:09
how similar so savion says how similar
30:11
would insurance be on properties that
30:13
are pretty much the same class
30:14
your built unit size et cetera as far as
30:17
price
30:18
um what does he mean it depends on
30:20
location yeah i was gonna say i think
30:21
location is the biggest thing on your
30:23
world right vintage location probably
30:25
two biggest factors well here’s how it
30:26
works so
30:27
let’s say you’re in north texas okay
30:31
they can’t they can’t do what’s called
30:33
windstorm modeling there you can’t
30:34
model a convective storm but if you’re
30:37
on the seacoast
30:38
like say houston or if you’re in north
30:40
houston south houston if you’re going
30:42
down to corpus christi whatnot
30:44
every company comes in and they do this
30:45
windstorm modeling what they do is they
30:47
plug into their computer and they use
30:48
the software that looks at
30:50
going back 5 10 and 15 years on every
30:52
major storm that’s hit
30:54
and then they look at their con that
30:56
particular company
30:57
or program looks at their concentration
30:59
of all the complexes they sure
31:00
ensure in that area of your complex and
31:03
based on
31:04
that they determine if they want to take
31:05
more exposure or less exposure
31:08
if they’ve got a ton of business in
31:09
houston they’re going to charge you a
31:11
higher rate
31:12
okay let’s say you’re looking at corpus
31:14
they don’t have anything in corpus they
31:15
want to spread it down because they know
31:17
that when a storm comes and hits houston
31:18
this guy and corpus most likely won’t
31:20
get hit
31:20
and if they it hits corpus these guys in
31:22
houston won’t get hit so if they’ve got
31:24
no exposure in corp
31:25
and corpus they’re most likely going to
31:27
give you a more competitive rate than
31:29
someone who has a ton of concentration
31:31
in corpus so
31:32
that that’s again where it gets to
31:33
experience and knowing which brokerage
31:35
to go to and then which programs and and
31:38
usually
31:39
that changes every 30 days as people
31:41
renew new business comes in and business
31:43
moves that’s why
31:44
on my end i see them stick with one
31:46
program for a year
31:48
all my houston stuff i literally it’s
31:50
rare that i’ll keep it with the same
31:52
program from year to year because
31:53
unless unless they knock it out of the
31:55
park on the renewal
31:56
nine times out of ten i’m looking at
31:58
other programs to move it and that’s not
31:59
an actually good point
32:00
dan does shop renewals too so it’s not
32:02
just one size fits all like your house
32:04
yeah
32:04
it increases automatically or any of
32:06
that nonsense well those cases where
32:08
your insurance can go down too
32:10
that brings me to another point on
32:11
shopping renewals you you don’t want to
32:13
call more than one
32:14
agent to do that here’s why
32:17
so whoever makes an application to a
32:19
brokerage
32:20
that’s who that brokerage is going to
32:22
deal with first
32:24
so if you call another agent they make
32:26
application to brokerage a
32:28
and i come along a week later i’m
32:30
completely locked out from that
32:31
brokerage
32:31
okay now i can get to the companies that
32:35
that brokerage represents by going to
32:36
another brokerage
32:37
if that brokerage a hasn’t taken that
32:40
application and sent it to all those
32:41
different
32:42
programs nine times out of ten they will
32:45
all right so this agent has filled out
32:46
an application
32:48
he’s put in whatever information he’s
32:50
put on it it has gone to this brokerage
32:52
and has gone to these companies now if
32:55
that brokerage is not a large producer
32:58
per se
32:58
for one of the companies that i want to
33:00
use
33:02
and that company gives a quote to that
33:04
brokerage and let’s say it’s a hundred
33:06
grand
33:06
all right and this the client gets
33:08
sticker shock calls
33:10
me and then says i’ll sign a broker
33:12
agent agent of record letter over to you
33:14
transfers to access to me locks the
33:16
other agent out
33:17
and i go to my brokerage and i could
33:19
have got the same product for 60 grand
33:22
i can’t now because that company is not
33:24
going to re-quote it
33:25
they’re going to transfer it over to
33:26
this brokerage and
33:28
i’m going to be handed a hundred
33:29
thousand dollar quote to sell the other
33:31
agent is effectively screwed up
33:34
okay i can’t fix it so you gotta so they
33:36
soured the market essentially
33:38
right yeah they’re they’re it if i
33:41
you just don’t want to do that um if you
33:43
have too many agents if you have any
33:45
more than one agent for that matter is
33:47
out there soliciting
33:49
uh apps that are soliciting bids for
33:51
multiple companies you’re gonna you’re
33:53
just gonna screw it up
33:54
now here’s a better one let’s say let’s
33:57
say i you come to me
33:59
i go to brokerage b i get a 60 000 quote
34:03
and you don’t think you think i’m too
34:05
high so you go over and call this other
34:07
agent
34:08
he solicits to brokerage a who goes to
34:11
the same company and there’s something
34:13
on that app
34:14
that they don’t like that’s different
34:15
from my app that sixty thousand dollar
34:17
quote can turn into a hundred
34:21
they don’t know the best way to position
34:22
things they don’t know who’s lying on
34:23
the application
34:26
and it’s either me it’s the other agent
34:30
or it’s the it’s the bar it’s the park
34:33
client the client
34:34
yep yeah they don’t know so they’re
34:35
going to stare uh a side towards air of
34:37
caution and bid higher now
34:39
i’ll tell you another story uh this is
34:41
true story this happened not too long
34:42
ago i had
34:43
an 87 000 quote
34:47
two days before a renewal for a client
34:49
he had sticker shock
34:51
this was on a monday he renewed on
34:54
wednesday he called another
34:55
agent on monday without me knowing but i
34:58
found out real quickly about it
35:00
he called the agent of the person
35:03
that uh the the the guy he bought the
35:06
complex from he called their agent who
35:08
used to be on it before
35:10
and that agent submitted apps to the
35:13
the program that i had a quote from
35:16
realized i was blocked realized he was
35:18
blocked so he couldn’t get a quote i
35:20
already got there first well that
35:22
program only wanted three years lost
35:24
history which was clean
35:26
he had no reason to do this other than
35:28
out of just
35:29
despite spite he sent six years a loss
35:32
history which included a multi-million
35:34
dollar fire loss on the sixth year
35:36
i got a call at noon on a monday saying
35:39
we rescind our quote
35:40
they did they didn’t jack the price they
35:42
just pulled it away
35:44
and i had and then he sent it out to
35:46
everybody else i had no
35:48
nowhere to place coverage on that
35:50
tuesday
35:51
nowhere and he calls me and i said i’m
35:53
i’m gonna have to recuse myself
35:55
you know whenever whenever a client
35:57
calls another agent does this to me
35:58
there’s nothing i can do i’m gonna he
36:00
goes dan please just
36:01
can you put it back in the horse i said
36:04
okay let me call in a favor i called a
36:06
club i called a broker i’ll leave that
36:07
analogy like that right
36:09
i called a broker he said i am personal
36:11
friends golfing buddies with
36:13
an underwriter at a company it’s a good
36:16
company they’re just not cheap
36:18
i said just send it over he produced a
36:21
quote that tuesday
36:22
we went from 87 and 000 six thousand
36:26
jeez and we bound it
36:30
so that that little that little price
36:31
shopping thousand dollars
36:33
yeah sixty thousand dollar mistake
36:35
that’s big
36:36
that’s big so again that’s that you you
36:39
interview the agent
36:41
pick the agent that you want to work
36:43
with and work with
36:44
them bring them on your team yeah say
36:46
how many brokerages do you work with
36:48
how many different companies do you go
36:50
to do you do you understand how
36:52
this process they just go to one
36:53
brokerage and they they want to go to
36:54
one or two companies and that’s it and
36:56
that’s all they’re not very well
36:57
experienced you’re you’re dealing with
36:59
the wrong agent
37:01
it’s it you know pick your agent
37:02
interview them get them on your team
37:04
and then everybody work together and
37:07
cross the finish line well you got you
37:08
got a ton of knowledge man i think we’re
37:10
gonna have you back
37:10
man we appreciate you taking some time
37:12
for us so once again
37:14
hopefully you enjoyed it that was fun so
37:15
dan kadurka yeah dan kadurka
37:18
you know strategic insurance group dan
37:20
at strategicinsure.com
37:22
check him out check out the tool he’s
37:23
got a really cool tool you know
37:25
and uh we will see you see you next week
37:28
next week what are we talking about next
37:29
week ben patron
37:30
real estate syndication structure
37:33
shannon’s got his back all right i will
37:36
see you guys next weekend

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