MTR insurance tenants and Coverage D

[Monica Pittard]

When speaking with an insurance company or housing provider placing a family under Coverage D, what are the key questions to ask to get to the heart of finding out how much the insurance company is willing to pay? Does anyone have any experience in having this conversation? I know the insurance company won't outright tell you what the coverage is or how much they have to spend, but I'm guessing if you ask the right questions in the right way you can suss out enough information in order to read between the lines. Thanks! LOVE this community!

[Cole Sullivan]

Hey Monica, I'm a real estate agent and investor here in Sacramento with Hardin Realty and Property Management. We manage over 100+ STR/MTR (Sacramento, Phoenix/Scottsdale, Smokies TN).

Loss of use coverage pays the owner of the property for the average daily rate of lost revenue. You should be able to get a straight answer from your insurance provider what the capped amount is. As far as securing that amount you have to submit past bookings and the historical performance of the property to calculate the average daily rate. Then that is prorated based on how long the home was decommissioned. Hope that helped! - Cole

[Monica Pittard]

Hi Cole! Thanks for taking the time to reply! I currently have insurance tenants in place who happen to be my first tenants in my MTR. Honestly, I didn’t know anything about the whole insurance aspect of renting. I just priced my house what I thought was appropriate for a furnished home. Now that I’m in to it and have had time to research, I feel I’m under priced. I understand what you said, but based on that, I feel as though I’ve shot myself in the foot with pricing and set a low precedent for the value of my property. Ugh. What do you think? 
Thanks again! 

[Jamie Banks]

@Monica Pittard You didn’t shoot yourself in the foot. While the current tenants might be under “market” when working with the insurance companies / relocation companies again you can always adjust your price. I work with relocation companies often and I can tell you from experience there’s no set price. Each families situation is different and will have a different budget. 

[Bonnie Low]

Quote from @Cole Sullivan:

Hey Monica, I'm a real estate agent and investor here in Sacramento with Hardin Realty and Property Management. We manage over 100+ STR/MTR (Sacramento, Phoenix/Scottsdale, Smokies TN).

Loss of use coverage pays the owner of the property for the average daily rate of lost revenue. You should be able to get a straight answer from your insurance provider what the capped amount is. As far as securing that amount you have to submit past bookings and the historical performance of the property to calculate the average daily rate. Then that is prorated based on how long the home was decommissioned. Hope that helped! - Cole

Before throwing out a price, ask them if you could ask a couple of questions first to better understand what the guest is looking for. This sets the stage for a price discussion without locking you into an answer right away. Ask questions like 'do you have a budget you're looking to stay within?' 'Does this guest need a pet friendly property?' 'how do you prefer to pay for utilities - as a separate line item or included in the monthly rate?' If you can get them providing some dialog with you they're more likely to share a target number. If you have more than one property at your disposal, you can let them know that this information will help you get them into a property that will best meet their needs. 

[Monica Pittard]

This is great info! Such good questions. I can see how opening a pricing dialogue would be helpful especially if you have multiple properties. In my case, I only have one but I do know lots of operators in my area I could refer to if I’m not a fit. With my current tenants, I was contacted through Furnished Finder so the housing provider already saw a price. This is another point I have trouble navigating. I’m sure I’ll get more dialed in pricing with more experience, but man it’s slow going to learn! Lol

Thanks again for your input!