All Forum Posts by: Matt Moylan

depending on the scope of your work there could be other options for minor flips/rehabs.

If you're doing true flips, builder's risk policies are likely your best option.

@Calin Segarceanu My best advice is to:

1) Find an insurance broker who is licensed in all 50 states

2) Narrow those insurance brokers down to who has a person who specializes in working with investors

3) Create a relationship with that person/brokerage to maximize your portfolio efficiency and minimize the amount of time you have to worry about insurance during an acquisition.

Feel free to message me for more suggestions!

Part 1 of 5: What is a Deductible Buy-Down Program

Deductible Buy-Down programs are insurance policies a business/real estate investor can implement in their protection plan to lower the amount of deductible they have to pay when there is a claim made.

These are policies which are in addition to the normal coverage plan (property, liability, auto, umbrella, cyber, etc.)

Part 2 of 5: How Buy-Down Programs Work

They are one of many ways a person/business can implement alternative insurance protection.

Buy-Downs are added to protection plans to lower out of pocket expenses for the insured at the time of loss (a claim)

Example of how a Buy-Down program works:

• You have a commercial property portfolio.
• Its insurance policy has a deductible and a premium. (let’s say your deductible is $25,000).
• To add a buy-down program to your protection you would look to max your policy deductible (typically to $100k, $500k, or $1MM), which will decrease your premium.
• The Buy-Down program deductible could stay the same or decrease from than the original $25,000.
• The program provides coverage from your buy-down deductible up to your new regular policy deductible.
• The program would be an additional cost, but ideally would save money OR keep costs the same while lowering out of pocket expenses.

Part 3 of 5: Who has access to Deductible Buy-Down programs?

There are two answers:

1) Business’ & Real Estate Investors (who invest in commercial OR have a large # of units)

2) Insurance Brokers

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1) These programs are aimed toward clientele who own property and want to decrease the amount of out of pocket expenses when there is a claim. Any business which owns property or real estate investors, could look into implementing a program to help the efficiency of their asset protection and business plan

2) Only insurance brokers have the availability to provide programs. The “big” companies or those which you can sing the jingle to/see marketing on TV all the time, likely don’t have these types of insurance solutions in their product suite.

Part 4 of 5: Why you should include Deductible Buy-Down Programs in your insurance policy program.

There are many different reason to consider adding one, or multiple buy-down programs to your insurance protection plan.

These are not all the reasons your business should consider implementing a buy-down program, BUT will give you a good understanding of who should seriously consider.

1) You have a number of properties in close proximity

2) Having a lower deductible is a priority for you

3) Wanting to look at ways to cut premium costs

4) If your insurance company is requiring you carry a substantially high regular deductible on your policy

Part 5 of 5: types of Deductible Buy-Down Programs

There are many buy-down programs available to implement into your insurance protection plan.

Depending on your business, the “best” program may not be in the list below, but the list is what I have seen more often.

• Wind
• Hail
• Earthquake
• Flood
• Hurricane

These programs are the most common programs I have seen, BUT that doesn’t mean they’re the best out there or right for you. I suggest you consult with your broker. If your broker doesn’t know what these are OR you currently work with a direct writing company (the big name/single insurance company’s), I’m happy to provide you details about various programs.

Who has used or currently uses buy-down programs in their protection plan?

Nice work @Luke Moore.  Been fun watching the progress!  

I'm sure you've done your due diligence, but being on the property&casualty side of the business, the senior living industry has taken a pretty significant spike in rates this year.  If you didn't know that, you may want to reach out to get your numbers/estimates updated so your numbers aren't thrown completely off.

We have seen anywhere between 20-60% increases so far. . . . .

Keep up the great work!

From a liability mind-frame, think about what amenities are/may be provided to golfers.  Are there ways to mitigate the collaboration of golf course and hotel? 

As the owner, what can you do to mitigate/implement to minimize the liability from the golf course to your guests

Who has access to the amenities?

If discounts are provided to golfers, are there additional liabilities which present themselves due to the co-mingling of golf/stay

From an insurance side of things, the market for senior living houses/communities is getting VERY difficult.  There are fewer companies writing those risks therefore the premiums have skyrocketed.  This year, I have seen numerous articles and even client renewals that have renewed anywhere from 25-60% higher than they were last year.

something to keep in mind!

@Ariel K. I’d be happy to discuss further and give any recommendations I’m able to. Shoot me a dm

Forgot to tag you in my comment @Ariel K. ^^

I also suggest not only working with an insurance broker, but one who specializes in working with investors.  

Do you have a relationship with your current agent?  It sounds like they don't take the time to walk you through your renewal to let you know how the market is changing?

Your claims will likely post to any company you get insurance through.  Also, if you have multiple companies not only is it an efficiency killer, but you could be losing out on discounts as well.

Typically it depends on the type of claim that you have made.  Carriers treat claims differently, so there is no true "correct" answer.

Going through a broker is what I always suggest because you will have the best possible ability to create a lasting agent relationship, maximize discounts, receive different quote options.