Jon Lafferty:
Hey, everybody, welcome to Avoiding Real Estate podcast. This is your pilot Jon Lafferty with Century 21 Town and Country.

Tony Abate:
And copilot Tony Abate with Ross Mortgage and we are your real estate pilots. Our job is to be your real estate advocate and also make sure you’re educated about the buying and selling process.

Tony Abate:
We’ll keep you informed throughout until we get you safely closed.

Jon Lafferty:
In a real estate transaction, there are many reasons why you can encounter turbulence. Today we’re going to talk with a local insurance agent about some of the turbulence you can encounter when trying to get homeowners insurance. Welcome back to the jump seat Christine Suchoski with Custom Insurance Agency.

Chris Suchoski:
Thank you, Jon.

Tony Abate:
Good to have you again, Christine.

Chris Suchoski:
Oh, thank you, Tony.

Tony Abate:
Yeah.

Jon Lafferty:
Let’s jump right in talk about that PIP coverage.

Chris Suchoski:
It’s auto. Yeah.

Jon Lafferty:
Yeah. Let’s talk about that first because that’s pretty top of Mind right now for a lot of people.

Chris Suchoski:
Yeah, we’re going through some changes here in the state of Michigan. This has been in and out of the courts for… oh, gosh, for years. What’s happening here in the state of Michigan, the PIP, personal injury protection portion of your auto policy is what’s in question here. They’re looking to mandate your liability limits. What does that mean?

Chris Suchoski:
What they want to do is, you, the policyholder, have an auto-related accident, and they want to know who’s going to pay first? Who pays primary in an auto-related accident?

Chris Suchoski:
Are you benefits coordinated? Does your medical pay first? Does your auto insurance pay first? To be honest with you, you really don’t know until you call that 800 number on the back of your medical card for those of you who have medical insurance.

Chris Suchoski:
Then at that point, you have an option, if your medical does pay primary, you can leave them as primary. If they pay secondary, well then your auto becomes primary. Then there are those of us who just don’t have medical insurance.

Chris Suchoski:
Auto insurance, at that point becomes the primary medical responsibility in an auto-related accident.

Tony Abate:
I can understand here and paint the picture, so we’re talking about a scenario where a person has typical auto coverage and typical medical coverage, and they get into an auto accident and they’re hurt-

Chris Suchoski:
Mm-hmm (affirmative).

Tony Abate:
… and so medical bills ensue and then it’s a question of were you’re insured two ways, both through your own policy into your personal which one’s going to write the first check, is that really what we’re talking about here?

Chris Suchoski:
Yes.

Tony Abate:
Okay.

Chris Suchoski:
See, personal injury protection basically covers your expenses, your medical care, if you will, recovery rehab, let’s say there’s some wage losses, it even covers funeral expenses too.

Chris Suchoski:
But what’s happening here in the state of Michigan, our rates are so high, because in the state of Michigan, if you were to get hurt, we have unlimited medical, for the rest of our life.

Tony Abate:
And the auto policy.

Chris Suchoski:
And the auto policy.

Tony Abate:
Mm-hmm (affirmative).

Chris Suchoski:
Yeah. But now what’s going to happen here come next year when they’re rolling this out to you guys, the policyholders an opportunity to put a cap on that to say, “Hey, I don’t want unlimited medical anymore. I’m going to put a half a million cap on that and take a discount.”

Chris Suchoski:
They’re offering you a discount by putting a cap on your medical protection. Health insurance will cover your medical expenses, but then the auto kicks in for all your ancillaries, your rehab, your recovery, do we have to do something to the house? Do we have to remodel?

Chris Suchoski:
Right now with unlimited medical, we don’t have to worry about that. But that’s why our rates are so high. If you were involved in an auto-related accident right now and you had health insurance as primary, they have a schedule fee, if you will, “This is how much we can charge you for the X-ray, hundred dollars.”

Chris Suchoski:
But if you have auto as primary, you don’t have a medical insurance and you have that same accident, they can charge you whatever they really want to charge you. 200, 300, 400, there is no fee schedule when the auto is paying first.

Chris Suchoski:
That’s why we’re coming into… we have a lot of problems here in the state of Michigan. To have that benefit, you got to pay for that benefit. I look at it and go, “I can’t put a cap on my family. If something happens, and we need oxygen for the rest of our lives, I need to know we’re going to have oxygen for the rest of our lives, and not that I’m going to… I have a cap of 500,000, then what do I do?” What do you do?

Chris Suchoski:
It’s different for every household. Maybe an older person looks at it differently and says, “Hey, I got 1020 more years, I’m okay with the cap. I’ll take the discount.”

Chris Suchoski:
Every household is going to be different, but this has been in and out of Lansing for years. We foresee, I hate to say it, lawsuits. There’s going to be lawsuits and that’s where the umbrella policy is going to come into play.

Jon Lafferty:
How much is the PIP right now?

Chris Suchoski:
Well, there’s no-

Jon Lafferty:
Auto policy, is it $200 or $220?

Chris Suchoski:
No, you’re talking the MCCA, that you’re talking about the Michigan Catastrophic Claims Association. The PIP is that personal injury protection portion on your policy in which we normally we carry a deductible. That’s based on the makeup of the household. What you’re talking about is the slush fund that we pay into per vehicle.

Jon Lafferty:
Right. Okay.

Chris Suchoski:
Okay, that’s what you talking into.

Jon Lafferty:
How much would PIP be affected? If I… Is it going to be tiered? Or is it going to be specific to every person? You’re saying right now that PIP is different for every household because it’s based on the makeup of the household. Then the discount that they get for electing a lower tier, so it’s not unlimited, but it’s cap, then for everybody, the amount of savings is going to be different, is what you’re saying basically.

Chris Suchoski:
When you say for everybody, you mean everybody in the household or just…

Jon Lafferty:
Well, whoever’s paying for the policy. The policy holders.

Tony Abate:
The policy holders

Chris Suchoski:
For the policy holders. I’m a family of five. I have three daughters on my auto policy. Let’s say I choose to put a cap of a half a million in personal injury protection that goes across the board for all five of us, and I get a discount of maybe 20%. My question is-

Jon Lafferty:
Hardly seems worth it.

Chris Suchoski:
… 20% of what, though, of the whole policy? Of the portion that we’re talking about the personal entry portion? What I fear and I hate to say it as if you’re saving here, but who’s that to say we’re net increasing rates on the comp and collision ended the policy?

Jon Lafferty:
Well, who’s to say that your medical insurance rates are going to go up as well?

Chris Suchoski:
Okay. Yeah.

Jon Lafferty:
Right?

Chris Suchoski:
Right.

Jon Lafferty:
Take it from here, add it to here.

Chris Suchoski:
Yeah, it’s just a reallocation of premium. It just… actually, to me, it’s very scary. I see a lot of lawsuits. I do. If you’re not properly insured, then what? The wages are… someone’s going to sue you. They’re going to garnish your wages.

Tony Abate:
Mm-hmm (affirmative). Yeah. Mm-hmm (affirmative).

Jon Lafferty:
Well, and it also brings up a question of, so right now, if medical insurers can charge any amount they want for a procedure that’s covered by this, if it’s, as you said, in your example, hundred dollars for an X-ray, because insurance is paying for it, because they’ve negotiated those rates, and then with Pip, there’s no set rate, they can charge whatever they want, well, they’re charging these exorbitant fees for things done on this side and if that gets capped, you’re going to see… you’ll see a lot of facilities either A, going out of business or consolidating or mandating that they have to charge more on the insurance end which is going to make your rates go up again.

Tony Abate:
Yeah. Yeah. Okay.

Chris Suchoski:
The problem is just no fee schedule for auto insurance. If it was… If auto pays primary in an auto-related accident, medical has a fee schedule. You come in your X-ray is $100. What’s the first thing they ask you when you go into emergency? “Was this an auto-related accident?” Right off the bat.

Tony Abate:
Hmm.

Jon Lafferty:
I’ve never been asked that.

Tony Abate:
Yeah. Yeah. Yeah.

Jon Lafferty:
I never did that.

Tony Abate:
I’m going to be a little contrary in here for the purpose of discussion, but one of the things that I see is that when it’s an unlimited bucket of money, and yet we all want to protect our family, we would never want to compromise coverage just for dollars, but when it’s unlimited like that, where’s the disincentive to the medical community to have any control over their costs? If they know that there’s somebody out there who’s going to write that check, put a price tag on it and whatever, because they know they’re going to get paid for that. Then somewhere in the middle, there’s a happy medium, I guess.

Tony Abate:
But it seems… I see problems in either direction, unfortunately.

Chris Suchoski:
Right.

Tony Abate:
I’ll be on my medic coverage, causes medical costs or contributes to medical costs going up, arguably. Then if they’re capped, is it just going to skew premiums into just another category?

Chris Suchoski:
Right.

Tony Abate:
To pick up the slack?

Chris Suchoski:
Right.

Jon Lafferty:
I guess we’re going to find out-

Tony Abate:
Yes, we are.

Jon Lafferty:
… the next few years.

Tony Abate:
Yeah.

Jon Lafferty:
… or this is all unshakable.

Tony Abate:
The interesting thing is, is that the issue of medical coverage is such a hot button topic in the country right now anyway, and it just goes to show how many things that we associated with, “I need to go to see my doctor for regular care or I have something catastrophic, that’s my medical story.”

Tony Abate:
But it’s interesting how the auto insurance piece layers into the whole thing and either helps or hurts or contributes or doesn’t contribute to that whole machine that’s causing cost to be what they are. I don’t have an easy answer. Yeah.

Jon Lafferty:
I don’t know if there is an easy answer at this point, I guess we’re just going to find out it’s going to be trial by error.

Tony Abate:
Yeah. Yeah. Yeah.

Jon Lafferty:
That’s just what’s going to be.

Tony Abate:
I agree a lot of law suits. I can see that.

Chris Suchoski:
Yeah. It’s… yeah. They’re going to the carriers, your agents will be sending you documents to sign off on. We need it documented, that we offered it to you and this is the choice that you made.

Tony Abate:
Mm-hmm (affirmative). Good advice so that you brought up for anybody listening and that is none of us can just assume that if we need medical care that our medical coverage is the primary payer.

Chris Suchoski:
No, no.

Tony Abate:
I didn’t know that.

Chris Suchoski:
No.

Tony Abate:
I didn’t know that.

Jon Lafferty:
I wouldn’t have thought that but now I’m going to make a phone call.

Tony Abate:
Yeah for sure.

Chris Suchoski:
Yeah, no, yeah when I write up a quote that… and we ask those questions and 10 times out of 10 they can’t answer it unless there’s something they checked into once before and I say, “I’m going to ask you to take a few minutes and call the 800 number on the back of your medical card and just ask them if I had an auto-related accident, would you… Blue Cross Blue care network cap? United Health? Would you pay first?”

Tony Abate:
That’s how that’s to… that’s the question we… that’s how we phrase that, would you pay first?

Chris Suchoski:
Yeah, that’s would you pay first? Would you pay primary?

Tony Abate:
When you telling about there’s something catastrophic, just tend to… of course we take care of the individual and then all of the moving financial pieces just get thrown into this nebulous hole-

Chris Suchoski:
Right.

Tony Abate:
… with the hope that well, what kind of bills I’m I going to get when it all comes out the other end? I don’t know.

Chris Suchoski:
What the… one other thing too in regards to the medical, this is huge. The makeup of the household, yes, a mom and dad and three kids, what if you have grandma. Grandma’s a driver in the household, grandma’s a Medicare. Medicare will never pay first in auto-related accident. What happens here the policy reads auto primary for everybody.

Tony Abate:
For everybody? Wow.

Chris Suchoski:
For everybody. Yep.

Jon Lafferty:
Wow, I guess it’s time to take grandma’s keys away.

Tony Abate:
Yeah, good stuff, Christine. Thank you for that.

Chris Suchoski:
Yeah. You’re welcome.

Tony Abate:
Yeah.

Jon Lafferty:
Thank you for that. Yeah. That thought that was important to talk about.

Tony Abate:
Mm-hmm (affirmative). Yeah.

Jon Lafferty:
Let’s jump into homeowners insurance policy.

Tony Abate:
Yeah, the real estate side of things.

Jon Lafferty:
Yeah, the exciting things, the stuff that we get to see and deal with all the time.

Tony Abate:
Put Christine on the spot, right? Yeah.

Jon Lafferty:
I’m going to put the spotlight right on.

Chris Suchoski:
Yeah, I’m feeling it.

Jon Lafferty:
Let’s talk about policies. In the past, I’ve heard people talk about, they’ve had the same insurer for years and they’ve insured the house all this time and then something happens to the home, either it blows up and an explosion or burns to the ground for fire, and then they find out, “I didn’t have the right coverage. I just had cash value and not replacement value by today’s standard.”

Jon Lafferty:
Can you explain a little bit of the difference between what a replacement cost policy versus an actual cash value policy is?

Chris Suchoski:
Yes. Okay, so let’s… we’ll try and keep it simple. Actual cash value, basically what it seen actual, what is that home worth at the time of the loss? What’s it worth, at the time of the loss?

Chris Suchoski:
Replacement is the rebuilding of the home to put you back the way you were.

Jon Lafferty:
When you say actual cash value, you look at the market and say, “Oh, this home is worth $350,000.” Not that it was… who cares if it’s $450,000 to totally rebuild it from the ground up to how it was? You’re only going to get 350,000-

Chris Suchoski:
Right.

Jon Lafferty:
… for actual cash value.

Chris Suchoski:
What the market dictates at the time.

Jon Lafferty:
Whoa, that sounds-

Tony Abate:
Interesting.

Jon Lafferty:
Yeah.

Chris Suchoski:
That’s the actual cash value replacement and a lot of people they look at their policies and they look at the dwelling a mountain go, “My house isn’t worth a half a million.” Say, “Whoa whoa.” This takes into consideration putting you back the way you were rebuilding the home.

Chris Suchoski:
Labor, it goes up. construction material goes up, what’s it going to take to build that home back the way you had it? That’s replacement cost. That’s what we’re talking about. Yeah, your home is worth a half a million. It is. On the market, you might sell it for 350.

Chris Suchoski:
But to rebuild that home to put you back the way you were, yeah, it could take up to a half a million dollars.

Tony Abate:
I think when things got skewed during the recession, and things went the other way, and property values went down, but in the event of a catastrophe or a catastrophic loss, the brick and mortar costs were not tied to the value of the property, and so it’s an important look because to your point, you got to get that house replaced regardless what that market value is high or low, you got to pay the carpenter, the concrete guy, the finish guy, it’s got to be put back to the way it was.

Jon Lafferty:
Let me ask you something, so I had a client, bought a house in Southfield, had it for… it was an investment property, had it for probably two years, and it caught fire and burned. It was basically a demolition you had to demo it, remove it and rebuild.

Jon Lafferty:
There was really no saving the structure. She took a cash payout and just sold the land, sold it for land value.

Jon Lafferty:
What kind of policy is that? Is that your standard replacement cost? Or was that just… what did she have that they’re going to cut her a check and she can decide either A, to rebuild or not just take the cash and walk?

Chris Suchoski:
Well-

Tony Abate:
She probably developed mortgage for one thing.

Jon Lafferty:
She did not.

Tony Abate:
Okay.

Chris Suchoski:
Yeah, and I was going to say if it’s an investment property, chances she was a landlord, so she was insuring the dwelling only. She maybe had a little bit of personal property as far as the appliances, and you’re never insuring the ground. You don’t insure the land, you’re insuring the dwelling.

Jon Lafferty:
Right.

Chris Suchoski:
She was probably a landlord, she had a landlord policy and in her eyes it made sense to take the money. You didn’t have to rebuild it. You don’t have to.

Tony Abate:
Curious though, and I don’t know if you heard the tail end of this, so if she had, I hope I don’t mess up the terms of cash value or replacement cost, she was compensated, but the dollar amounts may have been very different. Is that correct?

Chris Suchoski:
Absolutely. Yep.

Tony Abate:
Even if they don’t replace it, if she has replacement cost policy, which pays for the brick and mortar and everything, and she chooses not to replace it, she still gets the check.

Chris Suchoski:
Yeah, it’s insured.

Tony Abate:
Oh, interesting. Interesting. She had to rebuild that I guess if water comes down to it.

Jon Lafferty:
Okay. If there’s a mortgage on the property-

Chris Suchoski:
Well, that’s where Tony comes in.

Jon Lafferty:
… the lender is made whole and then the owner gets to cut a check for the remainder and they can either choose to A, rebuild or B, walk away and just sell the land, the lot, the property.

Chris Suchoski:
That of course is a claims question. I’ve not seen it, I’ve not seen it here but I’m sales you got to remember I’m sales.

Tony Abate:
Here comes a disclaimer Jon.

Chris Suchoski:
It is a claims question. But the big difference… and we didn’t see the policy we don’t know how it’s written, but actual cash value is basically the market dictates, the area dictates what the value of that home is.

Tony Abate:
Mm-hmm (affirmative).

Jon Lafferty:
Okay.

Chris Suchoski:
Depending on how she had it insured and yeah, was it replacement or was it actual cash value and she’s in a place where she decided she didn’t want to rebuild the home. Maybe she didn’t have replacement cost on it. Maybe she didn’t

Jon Lafferty:
I think you’re right.

Chris Suchoski:
Yeah.

Jon Lafferty:
All right. What is an extended replacement cost policy or writer?

Chris Suchoski:
Okay.

Jon Lafferty:
When would you recommend that to somebody to have? Or is it just included with certain insurers?

Chris Suchoski:
When you say extended replacement costs, are you asking me the percentage of what the home is being insured for? Here, let me give you an example. We have carriers who insure your home at 100 plus an additional 50%. There’s a question in there. Why? Inflation, cost of labor cost of material.

Chris Suchoski:
Just a little bump, you make updates to your home. My home is insured 400,000 but it’s insured at 150% so it’s really insured $450,000.

Jon Lafferty:
Is it important when your clients let’s say when they bought their house, it had an unfinished basement, they decide to go in and they spend 50 grand and have the whole basement finished with nice countertops and everything, it’s important for them to let you know right away when that’s done so that you can make an adjustment to their policy?

Chris Suchoski:
When there’s any upgrades to the home, whether it’s a finished basement, you replace the roof, you update, there’s discounts, this coverage that we’re looking at, I like to reach out to the clients myself on an annual basis. Any changes in the household? Did we add a pool? Do we take a pool out? Do you have a dog? This is all about risk and exposure-

Jon Lafferty:
Wuh, you got a dog?

Chris Suchoski:
… liability. Yeah.

Jon Lafferty:
Let’s talk about dogs.

Chris Suchoski:
Yeah.

Jon Lafferty:
Do you have a hit list of the aggressive breeds-

Chris Suchoski:
Yes.

Jon Lafferty:
… that you can insure?

Chris Suchoski:
Some carriers will frown upon certain breeds of dogs. Unfortunately, pit bulls, they’re one of them.

Jon Lafferty:
It’s a pretty-

Chris Suchoski:
Some will surcharge-

Jon Lafferty:
Okay.

Chris Suchoski:
… and some will say absolutely no tolerance for pit bulls.

Tony Abate:
They just won’t insure.

Chris Suchoski:
They just won’t insure it. Nope.

Jon Lafferty:
Won’t insure. Okay.

Tony Abate:
Interesting, okay.

Chris Suchoski:
No.

Jon Lafferty:
On that list there’s there’s a bunch of them. There’s Akitas, Doberman Pinschers, Rottweilers-

Tony Abate:
Mm-hmm (affirmative).

Chris Suchoski:
Yeah.

Jon Lafferty:
… Siberian Husky.

Chris Suchoski:
Some will ask for bite histories. Have there ever been a claim? Here we go into the clue.

Jon Lafferty:
Bite histories.

Chris Suchoski:
Bite history of the dog and then they’ll pop up in the clue report.

Jon Lafferty:
It’s funny, I guess.

Tony Abate:
But that would have to be something that would have been reported, I presume, either on a claim or a police something, is that how that works?

Chris Suchoski:
If it’s been reported. Yep. Yep.

Tony Abate:
Like the dog version of a speeding ticket.

Chris Suchoski:
Yeah, yeah.

Jon Lafferty:
I’ll tell you that we had the… my mother had a Wire Hair Terrier and he was on a chain and lived in the backyard and a UPS guy came around to drop off a package on the back porch, I don’t know why, and soon as he turned his back, dog bit him on the ankle, drew blood, he sued, the insurance settled and after that, they said, “Anything else and you’re uninsurable.” If there’s another claim against him.

Tony Abate:
Wow.

Chris Suchoski:
Yeah. Let me just rattle off a few of the canines that they have listed here just for the fun of it. Akitas-

Jon Lafferty:
Akitas yeah, no surprise there.

Chris Suchoski:
The Pit Bull Terriers, the Bullmastiff.

Jon Lafferty:
Bullmastiff. Yeah, those are

Chris Suchoski:
Mm-hmm (affirmative). Doberman Pinschers.

Jon Lafferty:
No surprise there.

Chris Suchoski:
Huskies, pit bulls, Rottweilers, German Shepherd-

Jon Lafferty:
What is a wolf hybrid?

Chris Suchoski:
Yeah.

Jon Lafferty:
What kind of dog is that?

Tony Abate:
I don’t think anyone would insure that. Yeah.

Chris Suchoski:
A lot of these are considered not acceptable and they’re going to require prior approval.

Jon Lafferty:
You know what’s interesting, is they have American Staffordshire-

Tony Abate:
Okay.

Jon Lafferty:
… which is code for a Staffordshire Terrier is code for a pit bull.

Tony Abate:
Really?

Jon Lafferty:
Yeah. You call it, you… I don’t have a pit bull. I’ve got a Staffordshire Terrier.

Tony Abate:
Uh-huh (affirmative). Okay.

Jon Lafferty:
I think if we got that. Wow.

Chris Suchoski:
Yeah, it goes beyond dogs. Exotic animals.

Jon Lafferty:
Oh, yeah.

Chris Suchoski:
Yeah that’s-

Jon Lafferty:
Like snakes, spiders, gear monsters.

Chris Suchoski:
Any livestock or undomesticated animals.

Jon Lafferty:
Chickens?

Tony Abate:
Yeah, my chickens aren’t covered by the way. But they’re on their own.

Jon Lafferty:
If a fox in the henhouse, that’s it.

Tony Abate:
They are on their own. I don’t think they pose a risk. Should I be telling that to my insurance agent that I’ve got these things?

Chris Suchoski:
It’s not a bad idea.

Jon Lafferty:
Are they a potential for bird flu?

Chris Suchoski:
It’s not a bad idea, because think about it Tony, somebody comes over and visits-

Tony Abate:
Trips over a chicken.

Chris Suchoski:
Trips over chicken or steps in chicken-

Jon Lafferty:
Get attacked by the chicken.

Chris Suchoski:
… master or whatever slips and falls, then what? Oh, now we got a claim. We got liability. We got to look at your liability. How much liability do you have on that home?

Tony Abate:
I have an umbrella policy.

Chris Suchoski:
Very good.

Jon Lafferty:
You take those eggs that they have all the time and you give them to somebody to eat them and get sick.

Tony Abate:
That’s a good point. Yeah.

Chris Suchoski:
Yeah. Because now you’re delivering goods. Yeah.

Tony Abate:
Yeah.

Chris Suchoski:
Yeah.

Jon Lafferty:
Something with that virus that was associated with chickens.

Chris Suchoski:
Oh, yeah.

Jon Lafferty:
Is it the H1?

Tony Abate:
Yeah, that’s right.

Chris Suchoski:
I don’t remember.

Tony Abate:
Yeah.

Chris Suchoski:
H1 F1, which one? G1.

Tony Abate:
Many people signed a disclaimer when they take a handful of eggs off hands, “Sign here please.”

Chris Suchoski:
Well, but then there are they coming to the home to pick up these eggs?

Tony Abate:
No almost never.

Chris Suchoski:
Okay.

Jon Lafferty:
Definitely not all.

Tony Abate:
Because we don’t want them to trip over a chicken, have a better claim, right?

Jon Lafferty:
Talk for a minute about ordinance law coverage. Let’s say that the house is destroyed for fire and the homeowner says, “I’m going to rebuild.” They want to build the same kind of house and in that, let’s say that we’re the community where they built they now have a… let’s just use Minneapolis for example. Minneapolis has an ordinance now, a municipal code that says that any oversized lots, you cannot build a single family residence on it. You must build a multi-residential property on it. It’s either got to be a duplex, triplex or fourplex, quadplex.

Jon Lafferty:
You can no longer build a single family residence. If you’re that homeowner your house burns down, what do you do?

Chris Suchoski:
Okay, well, you’re talking Minnesota?

Jon Lafferty:
Well, yeah, just as an example.

Chris Suchoski:
Okay.

Jon Lafferty:
Just let’s say in any other community here, a community here says… a community like Detroit says, in order to help have higher density population in areas around, let’s say bus hubs, transportation so that people can get access to go north to work in, let’s say, Birmingham and shops, we require higher density living in these areas. From an insurance perspective, is there ordinance law coverage that would maybe cover something like that?

Chris Suchoski:
Ordinance law-

Jon Lafferty:
I just sell myself into a pixel?

Chris Suchoski:
Yeah. Yeah, you did. Because you’re talking about zoning.

Jon Lafferty:
Yeah.

Chris Suchoski:
You’re talking about zoning, and how that piece of property is being zoned. Ordinance law is bringing the home up to code.

Jon Lafferty:
God bless it. My whole argument there, I thought I did a really nice job. What a crap argument?

Chris Suchoski:
Ordinance law-

Tony Abate:
It sounded good.

Chris Suchoski:
We have this-

Jon Lafferty:
It sounded good but it’s… what was I wrong?

Tony Abate:
But you made me think about something, go ahead, but I have a question.

Chris Suchoski:
Yeah, but on the home policies, we always-

Tony Abate:
Yeah, idiot.

Chris Suchoski:
I always add a percentage of our ordinance law coverage to bring the house up to code, whether it’s 25 or 50%. It’s very minimal on a policy, but it’s a peace of mind knowing that if something did happen, whether it’s a partial loss or a whole loss, and right now, let’s say you only have 100 amp, and a lot of the carriers do frown upon fuses, circuit breakers are the way to go. But maybe this is an old policy and it was insured with fuses. But now we have to rebuild the home and bring it to code. That’s where the ordinance of law comes into play. Not only are we insuring the dwelling the four walls and the roof, but you’re also insuring to bring the home up to today’s standards.

Tony Abate:
Hmm, is that in every policy or is that something that a person would have to tell you?

Chris Suchoski:
Yeah, it’s in there.

Tony Abate:
Okay.

Chris Suchoski:
You have the toggle switch, if you will to dictate how much you want, 5% 10% 25%.

Tony Abate:
Jon you brought up a point that has some practical things very close to our offices-

Jon Lafferty:
Thank you, I feel better.

Tony Abate:
No you really did, and close to both our offices, we have close to downtown Minneapolis streets, typical single family zoning, but there’s duplexes there. They’re grandfathered in the city is saying, “You know what, you’re fine, we changed the rules after that property was built. But if that property is destroyed, you can’t replace it with a duplex. You have to replace that single family home.” I think that’s a similar scenario to what you’re talking about.

Jon Lafferty:
It is. It is.

Tony Abate:
What happens then? I’m the duplex owner maybe I live in half, maybe I don’t I’m not so sure that it matters, now it burns, I want it replaced, I’m compelled to replace that have a different type of structure, is there something in the insurance that has to be addressed or changes or anything like that?

Chris Suchoski:
No, we’re insuring the dwelling.

Tony Abate:
Okay. Even if doesn’t have to replace with exact like kind?

Chris Suchoski:
No, no, no.

Tony Abate:
Okay.

Chris Suchoski:
This is a given amount. This is how much it’s been insured for less than deductible. Depending on what the claim is and again, it’s a claims question. But what you choose to do afterwards you have to work within the county itself and how it’s being zoned.

Chris Suchoski:
We’re insuring the home and what happens to the home and what you get for the home, you have to work within the area that the home is in.

Chris Suchoski:
The county, your zoning.

Tony Abate:
I guess the end answer is the coverage is there it will replace a structure even if it’s not replaced with what was lost.

Chris Suchoski:
Yeah, because it’s always changing. It’s areas could be rezoned. What used to be an agricultural is now residential or-

Tony Abate:
Yeah. The interesting thing though is that that person may not want a triplex or a duplex. What you described, “Hey, I got my single family home, I miss my name on my own business, I’ve got a fire, and now I’m compelled to rebuild something that’s multi-family.” That’s an interesting scenario. Yeah.

Jon Lafferty:
I love you, man. Thanks. You make I feel so much better.

Tony Abate:
Really and baby.

Jon Lafferty:
I appreciate it.

Tony Abate:
But no, it’s a compelling discussion, really, I’m not quite sure how they’re going to address that.

Jon Lafferty:
Talk about some credits that your company typically offers with different carriers that you have you’re always talking about there’s a credit for this, there’s a credit for that, what do you see across the board some standard credits that you… those questions that you ask people to determine whether or not you can get them a discount?

Chris Suchoski:
Yeah. We’re talking homeowners insurance.

Jon Lafferty:
Yes. Not car. Not-

Chris Suchoski:
Yeah. Homeowners insurance.

Jon Lafferty:
Yeah.

Chris Suchoski:
One of the bigger discounts is the age of the roof. If their roof is within five years old, that’s a pretty good discount. I’ve seen it upwards to $200. Now we might need documentation that we have to submit to the underwriters, but that the roof is important.

Chris Suchoski:
That’s a big discount. Water backup. You got a sump pump. Do you got a backup pump? That’s a discount. Do you have a whole house generator? Do you have a backup generator? That’s a discount.

Tony Abate:
Can I stop on that?

Chris Suchoski:
Sure.

Tony Abate:
A house that has a generator you discount the cost of homeowners insurance.

Chris Suchoski:
There is a discount for that as well. Yep.

Tony Abate:
Can I ask what… How does that reduce claims that insure might have to pay out?

Chris Suchoski:
You have… well you’ll never lose power and then you have surge protectors. You have a backup generator so you’re not… Think about it you get hit with lightning, and it takes out the electrical throughout your home-

Jon Lafferty:
If some part stops working.

Chris Suchoski:
If some part stops working-

Tony Abate:
Mm-hmm (affirmative). Okay. Yeah.

Chris Suchoski:
… which I can share a personal story about that. In my first home, I had a sump pump back in August of 2014. When we get all that rain, it came down at a Monday night and I’m selling insurance. I go downstairs, I’m looking at my pump and it’s working. She is working hard. It’s working. I had to double check. I could hear it but I needed to see it. I go back down there Tuesday afternoon. I know my way down so there’s no need for me to turn the lights on. I stepped down into the floor with my socks and they’re wet. What happened? What happened? Flick the lights on. I got two inches of water in my basement.

Chris Suchoski:
But my pump was working. Yeah, it was working Monday night. It works so hard, and this is kind of unusual that it worked itself loose from the receptacle.

Tony Abate:
Oh, boy.

Chris Suchoski:
It came loose. Therefore the pump couldn’t keep up with the amount of water and the drain, the water came up from the drains and it flooded my basement-

Tony Abate:
Hmm, wow.

Chris Suchoski:
… of about two inches carpet of about six months old. I was one of the smaller guys at the time. My insurance carrier knew the size of my home. I took pictures. This was all done via email. I was covered for $10,000. They didn’t even come out to the house. They mailed me the check.

Tony Abate:
Wow.

Chris Suchoski:
I got paid to clean my own basement, basically is what happened. But had I had a backup pump, that would have helped. Something that maybe an alarm which you can get those as well. Sometimes they come if you have a whole house alarm system, they offer that too.

Chris Suchoski:
Or the type where when the water gets too high, it sets off. It’s based on the height of the water, so it’s battery operated, so you don’t have to deal with electrical.

Chris Suchoski:
These are all little… Then these questions that we ask. Do you have a sump pump? Do you have a backup pump? How old is your rough? These are discounts that come into play when we’re doing a homeowner’s insurance quote

Jon Lafferty:
Is there a discount for owning a snowblower?

Chris Suchoski:
No, no. That falls on your personal property by the way.

Tony Abate:
Nice try.

Chris Suchoski:
It doesn’t care, it doesn’t matter what kind you have or how big it is or whatever. No, it doesn’t matter. But I will tell you this, when writing a homeowner’s policy, let’s say you do have a pool, are you fenced in? Is your fence around the pool is your fence around the yard. You have a hot tub, you got to have a lock cover on it. Otherwise, we might not be able to insure you. These are… it’s all about risk and exposure and it goes back to the dog, you know what I mean? Not that they give you discounts but these are things that they ask when we put a quote together.

Chris Suchoski:
Especially the rough though, that is a big discount, but they want to know roughly how old it is. Some of them say if it hasn’t been torn off and put out a new one, it’s the second or third layer, we don’t want to insure it. We don’t want to.

Chris Suchoski:
Every carrier is different. Talk about a condo, we’re insuring from the walls in. We’re insuring from studs in normally, but you got to read your bylaws and you got to double check. What are we really insuring for? How do people say, “Oh, I only need $25,000 worth of dwelling coverage.” Let’s stop and think about this, you have counters, you have cabinets, you have floors, you have tile, you have carpet, you have toilets. This is all property.

Tony Abate:
Yeah $25,000 doesn’t go very far-

Chris Suchoski:
Doesn’t go very far.

Tony Abate:
… on all that, does it? Yeah.

Chris Suchoski:
No, not at all.

Tony Abate:
Mm-hmm (affirmative).

Chris Suchoski:
You might not be insuring the brick mortar, but you are insuring from the walls in. A lot of times we see clients who are underinsured. But the more I know, the better I can insure you, or at least educate you to make an educated decision to move forward on that amount of coverage.

Chris Suchoski:
The nice thing about condos is you get a discount, a multi-policy discount on your auto for owning a condo as if you’re owning a home. It’s basically the same discount, which is nice. You have multi-policy discounts, you got multi-car discounts, the age of the roof is a discount, you have any water backup that’s a discount as well. Those are some of the major ones that we run into as far as discounts on the home. I will tell you on a home policy, what comes into play territory, your zip code.

Chris Suchoski:
Where’s your fire department?

Jon Lafferty:
I was going to ask you that. That was one of my smart-guy questions I wrote down I said, “Hey, so if you’re a house out in the middle of nowhere and the nearest fire department is 25 minutes away, is that going to affect the cost of your policy?

Chris Suchoski:
Yeah, absolutely. Yep. Fire department, fire hydrant.

Jon Lafferty:
Okay.

Chris Suchoski:
Oh, yeah.

Jon Lafferty:
What about your neighborhood? Can that affect your insurance cost?

Chris Suchoski:
Yeah.

Jon Lafferty:
If you have neighbors who’ve had a bunch of claims over the… recently for different reasons, will that affect your policy?

Chris Suchoski:
We be go back to territory.

Jon Lafferty:
Now I get it.

Chris Suchoski:
Now this is all actuarial. They collect this data. We don’t see it, us as agents. It’s our job and we have a question here that we go through and I ask you the makeup of your household. How much tile do you have? How much carpet do you have? The age of the home that plays a part. One-story, two-story, that plays a part. How many bathrooms do you have? Do you have a basement? Is it finished? Again to the sump pump? Do you have a dog?

Chris Suchoski:
Now let’s remember too on a homeowner’s policy, we’re insuring your personal property. Do you have something to value that you want to identify separately? Because there’s a blanket-

Jon Lafferty:
Jewelry.

Chris Suchoski:
Jewelry, yep, yep. Let’s say your wedding set and you might have schedule that for zero deductible from theft or loss. That’s in addition to your typical homeowner’s policy. That comes into play too.

Jon Lafferty:
Okay.

Chris Suchoski:
But yeah, the territory, where you reside.

Jon Lafferty:
Let’s say I go play around a golf, my clubs are in my trunk-

Chris Suchoski:
Mm-hmm (affirmative).

Jon Lafferty:
… and my car gets stolen.

Chris Suchoski:
Yep.

Jon Lafferty:
Does my homeowners insurance cover golf clubs?

Chris Suchoski:
Yes. Yes.

Tony Abate:
Hmm.

Jon Lafferty:
Is there a… But I have to pay the deductible first.

Chris Suchoski:
There is a deductible. Yeah.

Jon Lafferty:
If you get a 20 $500 deductible just go back and say that on your own.

Tony Abate:
Yeah, but you play golf for the $10,000 club now, don’t you?

Chris Suchoski:
Yeah. But I tell you what, a lot of people-

Jon Lafferty:
A bit close.

Chris Suchoski:
… they’re like, “Wow, I’ve been paying this insurance for so long. What good is it if I can’t make a claim?” If you make a claim on your homeowners policy, it will hang on for five years, that claim and you will be surcharged for that claim. If you decide to leave that particular agent or carrier and go to somebody else, we all see it. We see the claim. It’s in your clue report.

Jon Lafferty:
That’s what you told me.

Chris Suchoski:
Yeah.

Jon Lafferty:
That’s why you couldn’t insure me for a few years. She had to wait for that accident to fall off the report before she can insure me.

Chris Suchoski:
Right, right.

Tony Abate:
Holy cow.

Chris Suchoski:
Yeah, so I like to encourage my clients call me first. Let me know what’s going on. Yeah, I shouldn’t go ahead and make the claim but what kind of repairs are we looking at here? Let’s get some estimates.

Tony Abate:
Yeah, if you had a $500 deductible in a $600 repair-

Chris Suchoski:
Yes.

Tony Abate:
… could this happen. Yeah.

Chris Suchoski:
Yeah, let’s think about this.

Tony Abate:
Yeah.

Chris Suchoski:
Yeah. Yeah. Because that claim can work for you, but it can work against you. We see it time and time again with the roof, when the hail comes down, and they say, “Oh, my neighbor had all this hail damage.” Then the adjuster goes out there and says, “Well, yes, you’ve had some hail damage, but it was your responsibility to maintain the roof.” You’ve got some pieces that are missing. We don’t cover pieces that are missing, that’s maintenance. Or valleys that have issues that need to be retard or the curling of your rough or the separation of the shingles, there is on your part as a homeowner to take care of your home, so they’re not going to come out here and say, “We’re going to replace it entire roof for you.” We’re not.

Jon Lafferty:
Being in Michigan, does the standard policy cover tornado damage? Or is that a separate thing you have to get?

Chris Suchoski:
An actual act of God? Yeah.

Jon Lafferty:
Would that be just considered wind and hail, I guess?

Chris Suchoski:
Yes, wind and hail. Mm-hmm (affirmative).

Jon Lafferty:
Okay.

Chris Suchoski:
Now you want earthquake coverage. That’s an endorsement. Endorsement is something that you add to the policy.

Jon Lafferty:
That was one of my questions on here. What’s an endorsement?

Chris Suchoski:
Yeah. Okay. That’s something that you add to the policy. An endorsement couldn’t be the jewelry itself. You have something of value or watch or ring.

Jon Lafferty:
A valuable painting.

Chris Suchoski:
Painting, yep, fine art, coins, collectibles-

Jon Lafferty:
Baseball cards.

Chris Suchoski:
Baseball cards. Yep. What we like to do we collect the data as well. Give me something, give me pictures, give me something in writing, give me an appraisal.

Chris Suchoski:
Give me some things that I’m going to keep on file that I’m going to also send to the underwriters so the carrier knows exactly what we’re insuring. I have a girl who has… oh, gosh, I forget what you call them, the crystal-

Jon Lafferty:
She’s into crystals, is she from New York?

Chris Suchoski:
Yeah, duh duh duh. She… I can’t-

Jon Lafferty:
Yeah, we’d stalk her.

Chris Suchoski:
… think of the name of it. She has a whole entire hutch full of-

Jon Lafferty:
A kid.

Chris Suchoski:
… crystals. I had to have her send me each piece and the value of that piece that you’re looking to insure it for and send me the pictures, so we know what we’re insuring.

Jon Lafferty:
When you’re talking about personal things endorsements, is there a difference? Is it the same thing with a normal policy where you have actual costs, replacement costs versus just what it’s worth today?

Chris Suchoski:
Okay, so you have an agreed amount, you can go with an agreed amount, or you go what it’s being appraised for. That’s basically agreed amount.

Chris Suchoski:
We’re looking to put you back the way you were, same thing with the jewelry. You’ve got a two-carat diamond. We have an appraisal on it for $10,000. We’ve got the pictures, we’ve got the paperwork, and it’s stolen, or it’s lost. You’re covered. If you have the endorsement, if you schedule that piece of jewelry on your policy, then it’s covered for loss.

Jon Lafferty:
Okay.

Tony Abate:
I guess to Jon’s point, though, I mean, these are not values that are necessarily static. That $10,000… that diamond, that price for $10,000, the time of writing the policy five years down the line, and maybe it’s more relevant for gold or collectibles or things like that, where the values go like that-

Chris Suchoski:
Yeah.

Tony Abate:
How do you… How does the person hedge against that sort of thing? Because that number does change.

Chris Suchoski:
It does change. Yeah. That’s something that you would want to update.

Tony Abate:
Oh, okay. That’s… you just have to periodically… okay-

Chris Suchoski:
It’s not a bad idea to get a… Yeah, get it re-appraised because you could have an old policy that you wrote 10 years ago.

Jon Lafferty:
That’s the difference between having an insurance agent that asks questions each year when they renew your policy, and somebody who just send you the renewal notice in the mail.

Tony Abate:
Yeah.

Chris Suchoski:
Yeah.

Jon Lafferty:
Right?

Tony Abate:
Yeah.

Chris Suchoski:
Yeah.

Tony Abate:
That’s one of the cool things about the appraisal you can-

Chris Suchoski:
Yeah. It could go out, you could renovations you could add to your existing home, and, yeah, you as a homeowner might frown upon letting everybody else know but you were protecting you and we need to make sure we have enough coverage for you. I will tell you in the insurance industry, I’ve been doing this 12 years, you typically don’t see rate decreases, but what they do is they get creative with the discounts.

Chris Suchoski:
With communication, and I know a little bit more what’s going on in the household, you reach out to me, a child left the home, she’s no longer in the household are we finished the basement and then we spent 50, $60,000 and I want to increase the coverage and my water backup. I just had one of those couple months ago. That’s playing it smart, because you just dropped $60,000 in the basement. Right now I only got $10,000 worth of backup coverage in there. That’s not enough. But you also know as a homeowner, you got to keep your valuables off the floor too. But you’re just… you’re protecting yourself. You can hide it all you want, but you’re only doing yourself a disservice.

Tony Abate:
Yep.

Chris Suchoski:
You know what I’m saying? Insurance is about protecting your assets, whether it’s your home, your autos, yourself, your family, your liability, your risk.

Jon Lafferty:
Let’s take jewelry out of the equation for a second. Let’s talk about for instance, somebody who buys a laptop and wants insurance for it in case something happens to it and it gets fried with a power surge and so now you got to get a new laptop and we all know that they’re not getting cheaper. This one was $900 to buy and to replace it is now $1300 dollars covered.

Chris Suchoski:
Well, how did you get fried? Where were you?

Jon Lafferty:
In the house?

Chris Suchoski:
You were in the house, so you had some sort of… you have a claim now in the home, so it was probably more than just the laptop that got-

Jon Lafferty:
Well, my question is more so when something like that happens, computer, television set falls over and breaks, it was an older TV set-

Chris Suchoski:
It’s all personal property.

Jon Lafferty:
Right. You have-

Chris Suchoski:
Right.

Jon Lafferty:
… What type of policy do you recommend to somebody so that if I have a five-year-old television set, and it falls over and breaks, I know that my insurance is going to cover me so that I can go buy a brand new one, and I’m not going to have to take money out of my pocket to make up the difference.

Chris Suchoski:
But how did it fall?

Jon Lafferty:
But that’s not that’s not what I’m asking. I’m just asking what kind of coverage do you recommend? If… I’m not asking you a claims question-

Chris Suchoski:
Okay, so you-

Jon Lafferty:
I’m just asking what coverage do you get so that it’s the actual replacement cost?

Chris Suchoski:
You have replacement of your contents.

Jon Lafferty:
Okay, that’s where I was going.

Chris Suchoski:
That’s where I got it. Okay-

Jon Lafferty:
I was dancing around a merry-go-round.

Chris Suchoski:
Yeah. Its replacement of contents and contents is usually percentage of what the dwelling is being insured for. Let’s say your home is insured for 100,000 plus you have the 50% question, your content is typically 75% of the dwelling. Let’s say $75,000, can I bump that up? Absolutely. You say, “I feel that I have a little bit more than that.” Okay, we’ll bump it up. And you’ll pay a little bit more for that, but now you’re feeling better, “Hey, my home’s insured 400,000. I have $100,000 in personal property.”

Chris Suchoski:
It’s not the most expensive part of the policy, it’s not and yet it’s wise because again, you are protecting your assets, you know what you have, and with replacement in contents, and I personally had a small house fire myself, we had to-

Jon Lafferty:
Was that the kitchen?

Chris Suchoski:
No. It was not the kitchen. It was… I’ll just leave it as spontaneous combustion-

Jon Lafferty:
Was that the bedroom?

Chris Suchoski:
No. No, but it was an August morning and… Okay, so I’m going to tell you the story. My husband was polyurethaning our hardwood floors. I decided to take myself and my three kids away for the weekend because it’s a lot of the-

Tony Abate:
Stinks.

Chris Suchoski:
Oh yeah, no-

Jon Lafferty:
Yeah it’s so strong.

Chris Suchoski:
… it’s very, very strong. I thought you know what, I’m going to take them to the waterpark. I went down to Kalahari and we had some fun. On my way back, I’m getting a phone call from my neighbor and she’s going, “Chris, something’s going on at your house.” I say, “What are you talking about?” Immediately, I’m thinking my husband’s having a heart attack or something.

Chris Suchoski:
But she couldn’t tell me because she can’t see the house what she could see there was smoke coming out of the top of the roof of my house. Here I am three kids sleeping in the car I’m on my way back home. I don’t know what’s going on.

Chris Suchoski:
I finally get a hold of my husband. What had happened is he had polyurethaned the floors that morning, August… Oh my gosh, it was by the afternoon. He had thrown everything into the receptacle, plastic which is up against the side of the home, brick home. While because it was so hot that day, and then the combustible material that was inside the receptacle, lit up like a match.

Chris Suchoski:
The receptacle lit up, cut the two foot overhang my home and made its way across the garage. I have a two-car attached garage, I lived in a ranch.

Chris Suchoski:
He was on his way to take a nap. He was tired, didn’t know what was going on. He opens up the basement he smells smoke. Well, the smoke had traveled through the vents into the basement. He’s thinking what’s going on downstairs until he opens up the garage door to look into the two-car garage and he sees flames shooting out the side of the garage.

Chris Suchoski:
In the meantime, my neighbor whose wife had called me, he was on his way home, which he typically doesn’t go home during the day but he was taking the boat home and saw this smoke and decided to come down the street. He grabbed my next door neighbor’s water hose and he’s hanging onto this hose and he’s trying to put the fire out.

Chris Suchoski:
In the meantime, my husband had opened up the door going, “Oh my gosh, what’s going on?” He’s just seeing these shooting flames. The next thing you know we’ve got three four fire trucks I guess that showed up in a green shoe, I wasn’t home when this all happened. When I pulled up, I was numb because had it been two more minutes I would have totally lost my house.

Tony Abate:
Wow.

Chris Suchoski:
Yeah, all because of the lambs wall and the polyurethane that had caught on fire, lit up like a match and it took off and hit the the two foot overhang, which is wood, and made its way across the garage.

Tony Abate:
Oh, man.

Chris Suchoski:
Yeah, that was scary stuff.

Tony Abate:
Yeah.

Chris Suchoski:
You just don’t know.

Tony Abate:
It happens, doesn’t it? Hence the need for it.

Chris Suchoski:
Yeah, it does happen and that’s why we have insurance but… and yes, of course we made a claim and we had the gestures come out and all that good stuff. But-

Jon Lafferty:
Yeah, that’s… wow.

Chris Suchoski:
If you got a few shingles missing on the top of your roof, no, you’re not going to want to make a claim.

Tony Abate:
Sure.

Chris Suchoski:
That’s maintenance.

Jon Lafferty:
Mm-hmm (affirmative).

Chris Suchoski:
That’s that’s something you’re going to want to take care of. Or your downspouts or your missing… whatever. Your gutters need repair, that’s maintenance to the home. That’s not a claim.

Tony Abate:
Yeah.

Chris Suchoski:
Yeah.

Jon Lafferty:
Mold.

Chris Suchoski:
Mold.

Jon Lafferty:
Pretty big thing here.

Chris Suchoski:
Mold.

Jon Lafferty:
Is that covered under normal policy or do you have to have a writer for that or-

Chris Suchoski:
A lot of the carriers, again back to the carriers do include it.

Jon Lafferty:
Okay.

Chris Suchoski:
Now you can talk seepage though, through the walls that’s not necessarily covered. That’s maintenance. You got seepage, you got mold, you got water back up-

Jon Lafferty:
There is the policy to have for seepage?

Chris Suchoski:
Some carriers cover it some don’t. If you have a problem-

Tony Abate:
When it’s a seepage, are you checking like a leaky water pipe?

Chris Suchoski:
Yeah.

Tony Abate:
Okay.

Chris Suchoski:
No, I’m talking leaking through the cracks of the walls in your basement.

Tony Abate:
Oh, okay.

Jon Lafferty:
Water comes in through the driveway, comes down the walls and leaks in the-

Tony Abate:
Got it. Mm-hmm (affirmative). Yeah.

Chris Suchoski:
Or it’s just coming through the actual poured basement itself.

Jon Lafferty:
But in the end… Oh, you have a shower in the basement, there’s nowhere for the humidity to go, so mold develops on the ceiling in that downstairs bathroom, covered or not covered, do you think?

Chris Suchoski:
You need a fan, right? It should have been inspected whoever did the-

Jon Lafferty:
No coverage, there’s your answer.

Tony Abate:
That’s what I’ve heard, yeah.

Chris Suchoski:
Are you going to really going to be able to make a claim? I don’t think so. No.

Tony Abate:
Yeah.

Jon Lafferty:
One of the things that’s interesting that I come across in homes that I look at, and I had this discussion with somebody while ago is, I’ll go into homes and there’ll be a bathroom in the basement, there’ll be a shower in the basement, and so you’ll see the fan on the ceiling. Well, I always go outside and look to see is it vented properly? Or was that thing just blowing the humidity up in the ceiling around? In which case you probably got a lot of mold in there.

Chris Suchoski:
Right.

Jon Lafferty:
I do that when I go there-

Chris Suchoski:
No, that’s great. Yeah, that’s-

Jon Lafferty:
It’s important.

Chris Suchoski:
Yeah, it was definitely important. Because when you buy a home, an existing home, you really don’t know what’s going on beyond that dry wall.

Tony Abate:
Right. Yeah. For years, they would just vent this stuff into the attic.

Chris Suchoski:
Oh, yeah.

Tony Abate:
Yeah. The ones up there will vent it up there and the problems are just tremendous that it creates.

Chris Suchoski:
Oh, yeah. It’s there to the point now, these adjusters they can tell how long the strip has been going on. They have tools. It was an existing situation. That’s a claims question, but I mean, yeah, we’ve had situa- no, we’ve had situ-

Tony Abate:
Claims question, Jon sorry.

Chris Suchoski:
It is a claims question. It’s for the adjusters-

Tony Abate:
Back off with the claims question.

Jon Lafferty:
Yes. Yes. Just got that.

Chris Suchoski:
… it just pays to one, maintain your home and two, to make sure that you are properly insured, go the extra 20 bucks or 30 bucks, and have a peace of mind knowing that you have enough coverage, that you’re protecting everything that you’ve worked for.

Tony Abate:
Yeah. Such important conversation and you I have a similarity in our business and that one of our big competitors is online businesses, providers of mortgage or insurance. What I always come back to is, none of that dialogue happens when somebody is clicking boxes, and they’re shopping online. What you do with asking the right questions, circling back to people a year later and so on, that’s a huge benefit and it just makes it very easy to refer people to you.

Chris Suchoski:
Yes.

Tony Abate:
So what you get-

Chris Suchoski:
We are not the 800 number-

Tony Abate:
Right.

Chris Suchoski:
We’re not, it’s not cookie cutter. There’s not a template for this.

Tony Abate:
Mm-hmm (affirmative). Yeah, so it’s a false savings in many cases. Somebody might get something online, “Hey, I’m choosing this insurance because it’s the lowest premium.” But what’s behind that, that’s causing that low premium. Then when do they find out? They find out when there’s a catastrophe or some sort of-

Chris Suchoski:
It’s too late?

Tony Abate:
Yeah. Yeah.

Jon Lafferty:
Well, most people don’t know what to ask. They don’t know what coverage they should have. That’s where somebody who’s an actual insurance agent knows what they’re doing, asks the right questions finds out about the house. You’re so detailed sometimes some of the questions you ask, like, the best people I referred to her, she called me up and said, “Okay, the Real Estate, tell me about the house. How big is it? How many bathrooms? How many bedrooms? Tell me about the roof, the age of the roof. Send me pictures. Tell me about the ground. Tell me about the basement.” Lots and lots of questions.

Tony Abate:
Yeah, good stuff.

Chris Suchoski:
Yeah.

Jon Lafferty:
You get very detailed.

Chris Suchoski:
Yes. Yeah. We the agents are bound by the underwriters too. The company wants to know, what are we insuring. We are the eyes for the underwriters as well. Those photos, they’re emailed over to underwriting. We look at them twice and nine times out of 10, depending on what the home has been insured for, we don’t have to have the photos necessarily on the inside at home. But if that home was worth over $750,000, we do. But anything less than that, we do need all four sides of the home and the roof, they want to see it and I do too though, to be honest with you, I do.

Tony Abate:
Sure, mm-hmm (affirmative).

Chris Suchoski:
What am I actually insuring? You know what I mean?

Tony Abate:
Well just add to the script that you have with the consumer. You’re asking questions that are driven by what you see in those pictures.

Chris Suchoski:
Yeah.

Tony Abate:
You don’t get that with the online providers.

Chris Suchoski:
No. No. Even if it’s just not the home itself, just the risk, a dog liability.

Jon Lafferty:
Well, I must be honest, online shopping for real estate, online shopping for a lender, online shopping for insurance. No boy no, you get what you pay for and people get into more trouble and more situations for you to being underinsured, getting a lender where they’ve got all these big surprise costs at the end, or working with an inexperienced realtor who happens to be the first person to dial a number to call you up from Zillow and be happy to work with you and drive you all over Southeast Michigan showing you 80 homes because they don’t know anything but what they’re doing.

Tony Abate:
Mm-hmm (affirmative). Mm-hmm (affirmative). Yeah, yeah.

Jon Lafferty:
Their cheerleader.

Tony Abate:
Their cheerleader. Save the online for the laptop and the washer shopping not for these big ticket things that we run into. Yeah.

Chris Suchoski:
Oh, definitely because the home is one of the major expenses, one of your biggest assets. Obviously all three of us play a big part in that. There’s no joke about that. You get a feel for what they’re looking for. You can steer them you can… you see things, you’re on the property, like you said, you look for the exhaust fan.

Jon Lafferty:
Well, the whole thing is education. That’s really what we do and I think separates us from dealing with somebody online is, we’re in the process of asking the right questions and educating the consumer so that they can make an informed decision whether or not they use you or somebody else. The whole point is to educate them so they make an informed decision.

Jon Lafferty:
The best decision for them. That’s what we do. That’s what all three of us do.

Tony Abate:
Absolutely. Mm-hmm (affirmative).

Chris Suchoski:
Absolutely. Yep.

Jon Lafferty:
Not everybody does that in their industry, but we do it.

Tony Abate:
Right.

Chris Suchoski:
Yeah. Well, and I think that’s where we stand out.

Jon Lafferty:
Mm-hmm (affirmative). Agreed.

Chris Suchoski:
Again, it’s not a cookie cutter, “Hey, this is what it is. Bam, bam, we’re done.” It’s we’re not.

Jon Lafferty:
Mm-hmm (negative).

Chris Suchoski:
We’re not. No.

Jon Lafferty:
All right. Well, I think we’ll wrap it with that. Thank you again, for coming. It’s always good to have you. Christine Suchoski with Custom Insurance Agency.

Jon Lafferty:
She sat in the jump seat and did well.

Chris Suchoski:
Yeah.

Tony Abate:
Yeah, how do we reach you? Because-

Jon Lafferty:
Yeah, what’s a good way to get ahold of you if somebody wants to… The policy is going to expire and they want to check with you and see if maybe they make a move or they’re buying a house?

Chris Suchoski:
Yeah.

Jon Lafferty:
Or auto, whatever.

Chris Suchoski:
I do work at Custom Insurance Agency, but I like to be contacted via my cell. That’s one-on-one you get me. My cell number is 586-255-3477.

Jon Lafferty:
Is there an email address too?

Chris Suchoski:
There is, C then my last name, S-U-C-H-O-S-K-I @custominsuranceagency.com and I do text, oh yes, we email, we text, we do it all. I do it all.

Jon Lafferty:
We answer the phone.

Chris Suchoski:
Yeah.

Tony Abate:
We’re cool.

Jon Lafferty:
We drink Margaritas.

Tony Abate:
When we get really cool with this. We can say, “Click on Christine’s link at the bottom of the screen.”

Chris Suchoski:
Yeah.

Jon Lafferty:
Yeah, he’ll put it right into your fingertips.

Tony Abate:
Yeah. That’s right. Right here. Click right here.

Jon Lafferty:
Right there.

Chris Suchoski:
Yeah, you deal directly with me. I don’t have my own admin. I work for myself. I do have support at the office. But I handle all my clients.

Tony Abate:
Great, you do a great job too.

Chris Suchoski:
Thank you.

Tony Abate:
Yeah.

Chris Suchoski:
Thank you guys. I want to thank you for letting me come back.

Tony Abate:
Absolutely.

Chris Suchoski:
I’m telling you, this is fun.

Tony Abate:
Yeah.

Jon Lafferty:
It is a lot of fun.

Chris Suchoski:
It is.

Tony Abate:
Yeah.

Jon Lafferty:
You provide good information.

Tony Abate:
Absolutely. Absolutely.

Chris Suchoski:
Thank you.

Tony Abate:
Okay.

Tony Abate:
Thank you for listening to Avoiding Real Estate Turbulence. If you’d be so kind to subscribe and review and rate, we would appreciate it. Please share with your friends, family and coworkers that they too can find us on Facebook, YouTube, at avoidingret.com, where you’ll find our contact information and every episode. You can also find us on Apple Podcast, Google Podcast and Spotify.