Why You Should Require Your Tenants to Have Renters Insurance

Renters Insurance Safford, AZDo you require your tenants to carry renters insurance? If not, you should. Why? Because it matters. I have a cousin that is a defense lawyer for a large insurance company. He defends them for liability cases. He has seen ALL sorts of crazy situations, and has a way of telling the story. The other day, he was explaining a situation that caught my attention. Landlords rents to a family. Tenants have a dog that would “never bite anyone.” Dog bites a kid. Takes a chunk out of his calf. The landlord was smart, and required his tenants to carry renters insurance. The limits the renters had weren’t high, but the hospital bill was covered. Good for the landlord, right? Wrong. Landlord also gets sued. Why, because while the hospital bills were covered there was some pain and suffering that wasn’t. So, naturally it would be the landlord’s responsibility for having allowed such a vicious dog to be on the premise. The verdict in this case was still pending when I spoke with him. But the outcome is irrelevant. He was their defending the insured, which brings up 3 things we can learn.

  1. The Defense costs provided by your landlord insurance policy are extremely important, without it, this poor landlord would have been footing the bill for this case.
  2. It would appear this landlord would have been on the hook whether or not the tenant had insurance, but because the tenant had insurance, the loss to the landlord was less that what it could have otherwise been.
  3. Ask about them, screen them, maybe don’t rent to people with them, and if you do, please remember Inspector Clouseau (https://www.youtube.com/watch?v=Kg0CQKQWLJI). Simply asking if their dog bites, may not be sufficient. If you do rent to people with dogs remember there are certain dog breeds that should be excluded in all cases. These include Pit Bulls, Rottweilers, Dobermans, Chows, Akitas, and other aggressive breeds. Yes, theirs might be the gentlest dog ever, but statistics show the bad liability claims are related to these types of breeds. Insurance companies don’t want to take the chance, and neither should you.

For a quote on renters insurance, contact us today.

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Home Insurance – Section 1 Exclusions

Home Insurance Exclusions in Safford, AZUnderstanding what’s not covered on your insurance policy lets you know what other insurance coverage you might need. Here are some of the BIG Exclusions.

Section I Exclusions – A Soap Box

What! Not everything’s covered?

Not everything is covered. That’s the bottom-line. Something’s we can find coverage for, while for other things, we are just out of luck. That said, regardless of whether you buy a special policy or not, you need to understand the exclusions, in order to truly understand your policy. Here are some of the most important exclusions found in section one… Why do I say it that way? Because there is a whole other section, just for exclusions. I know, not easy.

  1. Land – insurance doesn’t cover land. Why? ‘Cause you can’t hurt, dirt. This is an important point when you get into the idea of how to value your home.
  2. Ordinance or Law – So, if your local elected officials decide that every new building has to have a statue of Big Bird, but old buildings don’t, and your rental property burns to the ground and you have to rebuild… Guess what? You have to get that statue of Big Bird. Guess what else? The insurance company won’t pay for that. While no one requires Big Bird statues, there are other things, like sprinkler systems, where this happens all the time.
  3. Earth Movement – Now, depending on the state, you may or may not find earthquake coverage available. Even when earthquake coverage is available, things like, landslide, mine cave-ins, mudflow, sinkholes, etc. may not be covered. Can you get this coverage? You can in some states with a separate policy. Learn more about our catastrophic coverage policy here.
  4. Water – We all know Flood, tidal waves, etc. are not covered. What about overflows from drains, sump-pumps or sewers? Nope. Water is a tough one.
  5. Intentional Loss – For investors, this is big. It means there is no coverage for damage your tenants cause…. Which means it’s important to screen your tenants, so as to hopefully avoid the tenant that steals the copper and skates.

There are more, but these are the most important ones, in MY opinion. So, read the policy and find out what else might be important.

To get an incredible quote these coverage sections start our online quote form. To talk to a licensed agent about this coverage call us at 1-877-784-6787.

This coverage explanation is for illustration purposes only and is general in nature. Coverage explained here may not apply to your policy, State, company, or situation. For more information about how your policy would respond in the event of a loss, please refer to the terms and conditions and declarations page of your policy.
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Homeowner’s Insurance Coverage A

Homeowners Insurance Agent Safford, AZHomeowner’s Insurance Coverage A is the part of the policy that covers the home or dwelling itself. That seems simple enough, but wait, there’s more. It also covers any structure that is physically attached to the building. By that it means that it can’t be connected by a fence or a utility line, but rather physically attached to the dwelling. This may include attached decks, carports, patio covers.

When it comes to Homeowner’s Insurance Coverage A the question is always the coverage form, which can vary on the same home based on the occupancy of the home. For example if the home is vacant you might get a basic form with vandalism, theft, and malicious mischief excluded. However, if the home is owner occupied, a rental, or a second or seasonal home you might get a special form, which is always the best option.

One of the most difficult things about coverage A is determining the replacement value of the home which is the cost to rebuild the home as is. Market value is irrelevant as you can’t insure dirt. Land is excluded. Typically agents will use estimating tools to try to figure out a ball park, but appraisals can also be used. It is important to determine because if you don’t insure it for enough, you can get penalized in the event of a claim, and if you insure it for too much then you are paying to much for the insurance every month. Ultimately it is the insureds responsibility to determine the value, but there are things that can help you determine the value.

When it comes to the loss settlement, it often depends on what you choose. Typically you will have the option of replacement cost (the coverage you want) and Actual Cash Value. Choosing the replacement cost option will ensure that you are able to replace the home in the event of a loss. Actual cash value will provide you money as well, but it may not be what it needs to be to replace the home.

For a home insurance quote, contact us today!

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As Seen on TV

According to Statista.com in 2017 GEICO Insurance company spent nearly 1.4 billion dollars on advertising. Progressive? 622 Million. State Farm? 521 Million, and so on and so forth. Those are some staggering numbers.

Last week we lost a sale to someone who insisted on a “big name company”. It was a homeowner’s policy. We actually represent the company we lost it to, and had even provided the quote for that company to the customer, but we had recommended Travelers Insurance Company because they were cheaper and had better coverage… a lot better coverage. How do I know? Because the “big-name company” doesn’t offer the coverage… it’s not an option. Now I don’t fault the customer. We clearly didn’t present them in such a way that gave the customer confidence in Travelers. I would like to set the record straight:

As of 2016, Travelers is the 6th largest Property and casualty insurance company in the US, and the 9th largest in Arizona. They are the 6th largest homeowner’s provider in the US and 7th largest in Arizona. Point is we are talking a 29 billion dollar publicly traded company that is 106th on the list of the fortune 500 companies.

As an independent insurance agent, this is our fight. We, by our nature, sell companies that focus more on their products than on marketing. For example, we also represent Safeco, which is part of the liberty mutual group, the 3rd largest insurance company in the US, but they don’t sponsor baseball outs or have a cute mascot. What they (both Travelers and Safeco) do have is awesome coverage, and great claims service.

The point is this:  While you may not have heard of the company we are offering we do our homework. We are very contentious about our customer’s claims experiences, and work to ensure that we only represent quality companies. The insurance industry has a system for defining the quality of a company. AM Best provides ratings that are very much like grades A+, A, A- B+ etc. We only work with A-Rated companies to ensure you are covered by a solid company that is going to pay their claims.

While not all our companies spend millions upon millions on advertising they are good quality companies, that have awesome coverage, excellent claims service, and have chosen to work with independent insurance agents like Gila Insurance Group.

A final thought:  Last year, McDonalds spent 633 Million on advertising. Ruth Chris Steakhouse spent 6.7 Million according to emarketer.com. While McDonalds has its place, I know I would much rather eat a steak and Ruth Chris.

As with food, when it comes to insurance I recommend understanding the quality of what you are buying, and not putting all your stock in “As Seen On TV”.   It’s not always the best!

 

 

 

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Yes, It Can Happen Here… and It’s A Problem!

Yes, it can happen here! Here being Safford, Thatcher, Pima and the Gila Valley. What is it? Insurance claims.

We don’t see many natural disasters. I mean, the last major flooding of the Gila River was in what, 93-94? We don’t have hurricanes or tornadoes. We live too far from the mountain to have an issue with wildfires. We did have that hail storm back in 2016, but as a whole we don’t see that happen often, which has become a problem. It’s a good problem, but it’s a problem. Why? Because we that are blessed to live in our secure little valley have been lulled into a false sense of security, and it has caused us to purchase insurance in the wrong way. What do I mean? We nearly solely focus on price rather than the coverage. If you buy solely on price, then your claims experience is going to reflect that fact.

Monday night’s storm brought up 3 kinds of claims that can and did happen here:

  1. The wind found a weakness in a tree and snapped it in half. So, the half of the tree fell on a new pick-up truck, hit the roof of the house and landed on block wall. As it was, only the truck was damaged…but it still begs some questions. What if it had caused damage to both the home and the truck? How would your policy respond? Did you know there are policies that would only apply one deductible to the same loss? What if it had caused damage to the block wall? I don’t know if the wall was owned by the tree owner…if not, that would be liability. How much liability do you have?
  2. In another part of town another tree fell. In this case it broke a waterline and caused the neighbor’s house to flood causing thousands of dollars in damage. Because it was a neighbor’s tree that caused the damage, the neighbor will likely be liable for the flood damage, and it will likely be a liability claim that covers the damage.
  3. As I drove to work there were trampolines strewn across the valley. Yes, strewn is the right word. Some were straddling fences, others were up against houses, others in the middle of a pecan orchard. First, as a community we may want to consider anchoring our trampolines better. Second, we have another liability risk as we our trampolines become airborne missiles hurling towards neighbor’s property.

There are certain things we recommend for every client purchase, if available. Replacement Cost on the home, special coverage on Personal Property, water back-up of sewers and drains, high liability limits, and even an Umbrella. I know we just threw a lot of insurance words at you, so come see us and let us explain why these things are important, and how cheap they really are. We have developed easy ways of explaining what’s available and why it’s important for you

Yes, we do live in an awesome little area. Yes, major storms are rare. But we need to take a look at coverage. Because if you’re not buying your insurance policy for the coverage, what are you buying it for?

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Auto Liability Insurance

WHAT IS LIABILITY ONLY?

Auto Liability Insurance in Safford, AZThe Term liability only is thrown around a lot by Insurance agents and customers alike, but what does it mean? Too many customers is means give me the cheapest coverage I can buy so I can get out of here as soon as possible. But there are MANY things to consider when it comes to Auto liability insurance.

Let’s start with what liability covers. Most liability policies state that it covers “damages for bodily injury and property damage for which an insured is legally responsible because of an accident” or something similar. Let’s break that down for a second.

  1. There has to be damage. Either to property or person. The property damaged could be to a car, a house, a fence, or some other kind of property. Bodily injury means someone had to get medical attention of some sort. Could be by an EMT, a Doctor, a Chiropractor, etc.
  2. The insured has to be legally responsible for the damage (some level of liability). This means the police report deemed you to be at fault to some extent.
  3. There had to be an accident of some kind.

Sounds funny that we would break that down in such a way, but it is important that all 3 pieces exist. Liability also covers the legal fees required to defend you in the event that you do cause the damage described above. If you have recently spoken to a lawyer, you know how important this part of liability coverage actually is.

Like any policy there are exclusions to the auto liability insurance policy, and it is important that you understand these. For example;

  1. If you intentionally cause the damage – NOT COVERED
  2. If you are using it to transport people (yes Uber and Lyft Drivers I am looking at you) – NOT COVERED (liability coverage may be added to the policy by SOME companies.

There are many others, but these two are specifically worth noting in our road rage, Uber filled world.

Understand the liability limits on your policy. Usually auto liability is described in 3 numbers like this:

100,000/300,000/100,000

The first number indicates the bodily injury coverage per person. The second indicates the bodily injury coverage per accident (meaning the total payout for bodily injury), and the third number indicates the total coverage for property damage. So if you get in an accident and injure the driver the total amount in this case would be $100,000. At $100,001 in damage you are responsible for the additional $1.

Now, let’s say there are is a driver and 2 passengers. The total for any 1 person is still $100,000, but now the policy would pay $100,000 for each, so a total of $300,000. But let’s say there is the driver and 3 passengers and they all get hurt in an accident and it’s your fault and they all have major medical bills of $100,000 each. The policy pays out a total of $300,000, and you are on the hook for the other $100,000.

Clear as mud I am sure, but it’s important to understand that there are limits to the policy, and understanding these limits will help you to purchase liability coverage that suits your needs.

Liability for auto insurance is important. So much so it is required, by law, that driver’s purchase the coverage before getting on the road. Start Your Auto insurance online. We represent a number of different insurance companies to ensure you get great coverage at an affordable price every time.

This is a general explanation of coverage and different companies may treat these coverage options differently for information on exactly how your policy will respond please refer to your policy declarations page as well as the terms and conditions of your insurance policy.

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What’s the value of a 1-stock stock broker?

You wouldn’t buy a stock from a broker that just sold one stock. So why do you buy insurance that way? Unfortunately, so many real estate investors do exactly that. They go to an insurance agency that has one box (if you will) and one product. Sometimes investors fit in the box and other times, not so much. There are other options. Gila Insurance Group is an Independent Insurance Agent. What does that mean?  It means we represent multiple different companies. We have lots of different boxes and we work to find a policy that works for you. It means you fill out one application and get multiple quotes back. It means we have investor insurance options. It means we have investor insurance solutions. Options and solutions for you!

Are you just starting out and are doing your first flip? Or are you a seasoned long-term buy and hold investor with hundreds of properties under management? Here is what we have to offer.

For rehabbers: We work with Arcana, American Modern, Foremost, and Vacant Express. Each of these programs are a little different and can be modified to provide you with what you need.

Each includes:

  • Liability
  • Medical Payments
  • Coverage for the Dwelling

These Programs were designed with you in mind. For example, Arcana has no minimum earned premium. Meaning you get charged for just what you use. American Modern has a builder’s risk endorsement if you are adding on to the existing structure. Foremost allows you to have comprehensive coverage on the dwelling while its under renovation.

For buy and hold investors: We work with 9 different companies that work with Landlords. Some of these include CSE Insurance, Safeco, Travelers, Arcana, American Modern, Foremost, and American Reliable. Whether you have 1 or thousands we have insurance solutions that can help you drive down your cost with the coverage you need. Things like:

  • Liability
  • Coverage for the Dwelling
  • Loss of Rents

The key is to outsource the shopping to someone else. Someone like Gila Insurance Group. We have been working with investors for years and understand the struggles you face. In fact, we are investors ourselves and understand higher insurance costs mean lower returns and less cash in your pocket.

Don’t wait! Declare your independence by working with an Independent Agent or Broker like Gila Insurance Group LLC. Start your quote online now!

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Insurance is unfair!?

Insurance is unfair. Really. As amazing as it is and with all the incredible benefits it provides (if you have had a big loss you understand) it’s still unfair. Even with its affordable price (yes, I just said that) it’s really an incredible thing, but it’s also unfair. I mean, have you read your policy? Its incomprehensible! Yet also so simple.

Let’s address one of my insurance nightmares; “Sudden and Accidental.” Usually a policy covers things that are “sudden and accidental.” This is simple.

Suddenly and accidentally a fire started.

Suddenly and accidentally a tree fell through the roof.

Suddenly and accidentally the wind blew the shingles off.

The trouble is, there is one exception. This is incomprehensible.

Suddenly water started coming out from under my baseboards…

Or

Suddenly I noticed that my wall was squishy. When we opened it up there was ALL KINDS OF MOLD!

You call your company and tell your story, and they tell you,

“Sorry, it’s not covered.”

You irately respond with something like:

“What do you mean!?!”

They respond with something like

“Well, it wasn’t sudden and accidental. That leak has existed for a LONG time. Mold was growing. It was a maintenance issue.”

It had been there, but how are you supposed to know? See why it’s my nightmare?

Insurance companies like to insure stuff that is random and unpredictable and sometimes a leaky pipe is random when it bursts and floods the home with 3 inches of water. Other times, it’s an old house and the pipes are old and worn out so, they leak. You see the difference? Insurance companies don’t like to insure wear and tear, in fact it’s actually excluded. It’s part of the issue of owning the home. Stuff gets used, including the house. You have to fix, replace and repair stuff. Car Insurance does cover oil changes, and home insurance doesn’t like to cover stuff that is similar. But how are you supposed to know about the leak lurking behind your wall. You can’t, and it’s unfair.

[Enter the insurance equivalent of the Justice League]

Until now! Travelers Insurance Company has now come out with a coverage that you can buy that fixes this exact problem! Yes, you can now purchase a policy that covers that lurking leak. Ask us about the “Enhanced Water Package” from Travelers today and see how you can change unfair to fair on your insurance policy.

Don’t wait! Declare your independence by working with an Independent Agent or Broker like Gila Insurance Group LLC. Start your quote online now!

 

 

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Breaking Down Your Rental Home Insurance

Rental Home Insurance Safford, AZInsurance policies have their own dictionaries? Yes it’s called the definitions and there is a reason they define things, so there are no questions later.

Rental Home Insurance Definitions

Demystifying your insurance policy

The definitions of any insurance policy are super important, especially for Rental property coverage,  and unfortunately they are usually clear as mud. But, they make a HUGE difference in how things are covered. So while you might have an idea of what a given word means, it is important to understand how the insurance company defines things.

For example, there are a few basic definitions that anyone looking at a policy should understand.

  1. You: You’ll want to always be a “you” in policy. Why? Because the named insured gets the best coverage. Period. What do I mean? Remember that thing I said about the declarations page “driving” the policy. Well, the policy contract, that big stack of stuff that comes in the mail, doesn’t have your name on it, as it is general in nature.  Instead, it says things like “you” will be covered. In the definitions it says things like, “you” and ”your” to refer to the named insured, which is shown in the declarations. See why being a “you” is so important? I know, I know, clear as mud.
  1. Bodily Injury: You might also see a definition for bodily injury that will say something like, “Bodily harm, sickness or disease including death.” Notice that there is no coverage for personal injury, which includes things like libel, slander, false arrest, wrongful eviction, and invasion of privacy. This can be a big hole in an insurance policy and underscores the need for you to be a wise investor and landlord, NOT someone shooting from the hip. In fact, many companies covering rental properties will define their liability as “premises liability” to ensure there is no confusion about their lack of coverage for personal injury. Now, some companies will have an endorsement where you can add personal injury coverage, but not all so be sure you know what you are buying.

Alright, alright, I will step down from my soap box, but these are important things to know, because it could affect your decision making. Make sure you are a “you” in your policy, make sure purchase coverage for personal injury, and make sure you have a risk management strategy for avoiding personal injury claims, due to a wrongfully evicted a tenant, or crossed a privacy line. See, definitions matter.

Start your quote online now, or contact with questions about the definitions. Our licensed agents can walk you through the process, just call 1-877-784-6787.

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Which one is best for your homeowner’s policy: ACV or RCV?

Insurance policies are full of language and terms that may not be clear right off the bat. Many terms are specific to the industry and to the specific type of insurance that is being purchased. Having a local insurance agent for all of your insurance coverage allows you to chat about all the details with your agent so you completely understand your policy. If you haven’t done this, there are many potential claims where it’s easy to assume you have full coverage.

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