All Forum Posts by: Matt Moylan

Thanks for the mention @Yonah Weiss!

@Isaac Atwood it depends the risk tolerance you are willing to take on.  If you are very aggressive and only care about getting the money you invested into the property back, the ACV coverage would likely fit your needs.  If you are thinking buy and hold, and this property is one which you want to build your portfolio off of, replacement cost may be the best option.

Regarding what you paid for it and the replacement cost. . . I would definitely speak with a broker to see what options they have.  

Also, working with a broker who specializes in working with investors will benefit you greatly as they will have advanced knowledge of coverage's/products available/relationships with their company representatives.  

What I advise my clients is lets look to see what the difference in both coverage options and premium totals.  From there, discuss pros/cons and decide which policy fits your investing tolerance the best

@Jason D. great question.  Depending on the types of program implemented, it could be used more than just a couple times in a lifetime.

The other thing to know about implementing deductible buy down programs is it allows your primary policy to have a higher deducible.  Having that higher deductible saves you additional premium on your policies each year.  Obviously you would want the savings to be greater than the price of the program, but there is more than one way you would benefit from having one implemented.

They are looked at differently depending on the risk tolerance of the investor/partnership, but it at least gives an alternative option to paying massive deductibles (or self-insuring up to that higher deductible)

Thanks, @Percy N.

Honestly, it depends on the type of policy and program you're implementing. If the lender requires a deductible at a lower amount, the buy buy down programs could definitely still work.  As with anything the margins of savings would be less.  

The lender likely requires the "normal deductible" amount, so if you're looking to implement a hail program you could request to increase the specific hail deductible.

Another example is if you have a master tenant policy, which would eliminate the need for tenants to carry individual tenant policies, you could speak with your bank and tell them you would like to request a higher deductible because you're putting an additional program into place.  

Lots of potential moving parts, but at the end of the day it depends on the type and price of the property, your lender's requirements and willingness to be flexible, and the program you are implementing.

Yes sir @Chris Collins!

thanks @Yonah Weiss! Definitely something not everyone know about or even takes advantage of.
Having an insurance broker who not only know about them, but has the products available can help tremendously on the properties overall NOI :D

Great question @Chris Collins

First, it depends on what type of program you have in place.  There are a few different programs out there which provide different services.  (master tenant policy and hail policy to name a couple)

For your example, lets assume you have the proper plan in place for a normal "loss" or claim.  The loss would have to at least meet the program deductible.  Obviously if it does not, pay it out of pocket.  If the loss is over the program deductible you don't have to submit a claim through your normal insurance company.  You would simply make the claim through the buy down program company.

Does this help?

Great question @Simcha Davidman.  Typically it works like this.

You have your insurance deductible (lets say at $110k, same as the example above).

You would also have a deductible on the buy down policy (ex: $10k) and a premium to have that policy (ex: $20k)

The savings would come into play when you have to make a claim because you would only be paying $10k as opposed to the $110k deductible if you did not have the buy down policy.

Cost of the buy down policy (typically) is in the investors benefit compared to if they had a smaller deductible (the property policy premium would increase).  Every carrier is different, BUT what we have seen in the past is when there is an increase in deductible to higher amounts, the savings outweighs the cost of the buy down policy.

If you could pay 3/10ths of something would you?

What if I told you there are ways in insurance to decrease a $100,000+ deductible down to $20,000 or $30,000 AND pay only slightly more premium?

How is this possible? Through a “Deductible Buy Down” policy.

The buy down policy pays the difference between a ridiculously high deductible which multiplies your savings. (Regular deductibles and hail deductibles are often the highest)

Here’s a cost example to show the potential savings:

Let’s say the total cost of the Deductible Buy Down policy is $20,000/yr with a $10,000 deductible.

Your normal insurance policy deductible is $110,000/occurrence.

$20,000 + $10,000 = $30,000

$110,000 - $30,000= $80,000 in savings!

What policies can a Deductible Buy Down policy collaborate with?

- commercial buildings

- apartment complexes

- senior living communities

- self-storage facilities

- rental portfolios

- distillery’s

- brewery’s

- ..... and more

If your broker/agent doesn’t know about these tremendous programs, I’d be happy help educate you further.  

Feel free to message me or comment with questions.

Haven't worked a bunch with them, but I do have a couple experiences (I'm an insurance broker who works in all 50 states, so I see a lot of insurance companies)

1) Seems to be competitive

2) They are similar to any other e-commerce company (i.e. geico, e-surance, etc.) in that you only have your online account, and a 1-800 number

3) They want to earn your business and unless you request the coverage, they likely wont discuss it with you (which means you have to be your own insurance professional)

4) The client's who I work with who have had Lemonaid in the past say having a personal broker and specific person to connect with is very beneficial.

Best of Luck!

@Anna L. — @Colin Douthit at Atlas PM IS FANTASTIC!

I agree with @Charlotte Dunford.  Cincinnati Is a tremendous company! I am an insurance broker who uses them for a number of my clients.  Wonderful products and very comprehensive coverage.

NREIG can be a good company if you are looking for bare bones prices and policies.  What I've found though my clients who have had them in the past is the policies are written with bare minimum coverage unless you specifically ask for additional coverage.  Something to be weary of.  It is similar to having Geico, Esurance, or one of the other e-commerce insurance companies.  If you want to be your own insurance agent and professional, you could be putting yourself in a vulnerable position.