27 May VIDEO: Talking Homeowners Insurance with Michael Reedy Jr. of Crane Agency

TRANSCRIPTION

Today we’ve got mr mike reedy jr here with the crane agency and we are going to be talking all about homeowners insurance i’m excited to have mike on mike’s my home owners insurance expert i’ve got a lot of policies with you and a lot of questions for you today so thanks for being here welcome thanks for having me adam absolutely so i guess um we’ve known each other now for something like 20 something years right we were roommates back in like 2002 or whatever that was right but you’ve been insurance as long as i’ve known you this is kind of a family company right right so the kind of the joke goes i’ve been uh getting paid to be insurance for about 15 years uh but i’ve been in it my whole life i’m uh fourth generation at crane i work with my dad three uncles and a cousin a couple more cousins in the pipeline but it’s uh it’s kind of in the blood uh so here we are sure okay i love it and like i say i appreciate your time today uh can you just give me a general overview of homeowners insurance what it is when people get it why do they get it all that kind of stuff certainly so homeowners is really just uh it’s the greatest protection for any individual’s main asset is their home so homeowners insurance provides two different types of protection both property and liability uh property is it’s kind of divided up into four parts there’s the main dwelling which is the house itself other structures which might be a patio or a detached garage or a pool something like that personal property which is all your own stuff uh and then loss of use which is in case you have a fire or a tornado comes through or something happens uh an insured event that makes your home uninsurable is for you to find housing elsewhere holding this uh back up to uh what it was before the second part of it is liability uh everybody’s personal liability if you are found to be negligent or uh at fault of uh uh committing some act that someone else tells you holds you liable for your personal liability policy is included with the homeowners policy for certain limits of uh 100 300 to 500 000 sometimes up to a million um but there are a couple of different types of homeowners policies at them uh one is just the main home it’s you know a home you own all your stuff then there’s a condo policy it’s kind of dictated by the bylaws generally from the walls in all your stuff uh and then attendance policy is just runner’s policy it covers your personal liability i’m sorry personal property plus your personal liability uh okay we most often see people get homeowners when they purchase a home um it’s a generally 12-month policy there’s some some type of differentiate differentiators if you’re rebuilding or remodeling you want to get a what we call a builder’s risk policy ahead of time but that’s uh we can talk about that later um but generally people just kind of they renew on the anniversary date of the closing sometimes people switch mid-term if you think you’re uh getting hosed on a rate and want to switch mid-term you’re welcome to you got to go through a couple hoops but it’s it’s not too tough of a process okay interesting it’s like that’s a lot i mean even right there we’re just getting started on the video and there’s so many different types of policies and things like that that’s why that’s why it’s important to call someone like you not that we can just get our own insurance anyway without someone’s help but um i you know you guys are a broker right can you tell me kind of the difference between a broker and whatever the other option is right so there’s there’s a few different options now with the dawn of uh you know the technology and information your fingertips uh there’s a few different types of options one is you call a farmers or a state farm or a liberty directly uh just get one quote you can go online do it yourself there’s other places that are kind of uh some new to the game guys trying to disrupt the industry a little bit um uh pie insurance is one of them you kind of just call and they’ll they’ll do all the stuff for you uh but what we do is that more like a or like a website one you mean or is that a call one uh it’s it’s more like a website you go and put your stuff in and they’ll kind of generate some rates okay what difference differentiates a broker is that we have access to uh crane we have access to over 50 different carriers for the homeowner side it’s really down to about seven or eight we can go to and so where we leverage our position is by going in getting all your information setting up against you know four to five different carriers finding the best rates for you but not just the rates you know if you go online you can type in all your stuff and and whatever but you know we know some additional coverage to look for that you might not consider even think about uh that could really just we want to make sure you have all your stuff all your assets protected properly rather than just generating the lowest possible price we want to provide you a fair price we’re not always going to be the lowest price but you it’s kind of a trade-off you give up a low price but you get better coverage and that’s kind of our position yeah absolutely i think that that’s something that i’ve learned while working with you over the years you know i’m not a guy who likes to pay more or whatever for the same thing but i think what i’ve learned and i’ve experienced through situations that we’ve come through is that i’m not just paying like the lowest price i can for a piece of paper right it actually matters what it says on it and so when they talk about your deck page and your coverages and all that stuff all those things really do matter and that’s i think that that’s the main reason i’ve stuck with you and got you know or a person like you but i’ve stuck with you is because i’m not an insurance expert i know that you are and i feel like you’re making sure i get the best coverage and not just it’s not really just about the lowest price because once something happens as we’re going to talk a little bit about on this call once something happens you want you know you want the best coverage essentially right so and part of our not stick but uh processes you know like i said we’re not going to be lowest costs out there but we want to educate you on the different types of insurance are out there give you kind of a menu and let you pick a la carte after the main stuff is what you choose what you think is right for you and what you can bypass and we’ll we’re flexible we like to work with people um yeah and that’s we just want to make sure you have the proper protection rather than the lowest price yeah okay and not to hound on this price thing too much but i guess i’m i guess i i’m kind of wanting to make the point and you tell me if i’m wrong as you said like you’re not the lowest price out there but i’m guessing you’re you’re maybe not the lowest price out there because someone else is suggesting you should pay this much and get this much coverage and your guys’s like first number would probably be pay this much but you’re going to have this much coverage kind of thing right you could be the cheapest guy if you wanted to but you don’t like giving that low of coverage basically right and something we come across often is you know state farm will will send out uh pamphlets and say you can get stuff for x amount of dollars uh for this much but it’s a bare bones policy there’s not a whole lot of coverage on there uh it’s just uh it’s kind of a bait and switch almost uh well i’ll say we’ll get you a policy for 800 but really once you add in all the coverage you need it could be twelve or fourteen hundred dollars um so there’s a lot of different variables kind of go into pricing your your insurance uh the main thing is obviously the the replacement cost of the home uh one big thing we deal with a lot on homeowners or any property insurance really is the valuation of the home a lot of people think you know what what you pay for it is what you insure it for and that’s very rarely the case uh insurance is guided by and there are two options but largely guided by replacement costs so what you if you buy a house for 200 000 in the replacement cost based on different calculations we have comes out to 400 000 we recommend you insure the house for 400 000 because that’s going to cost if there’s a fire in your house burns down it’s going to replace the costs like new like kind of quality plus you know some of the updates that the city or county may require but if you insure it for 200 000 which you bought it for which we call it actual cash value is kind of a or a fair market value is a replacement cost less depreciation so if you have a 400 000 house you insure it for 200 000 burns down you’re not going to be able to build it like new you’re gonna have to get that depreciated uh settlement and probably be out of significant uh amount of your asset yeah but so like so i guess is there some sort of rough formula you know i’m a proper uh real estate investor and so when i’m looking at a building someone’s like hey i’ll sell you this building for a hundred thousand i like to put into my little mortgage calculator and estimate what my payment would be which includes taxes and insurance so is there like a hey one percent of the purchase price or like is going to be your yearly insurance cost is there sort of any formula for that you know it i wish there was sometimes but no uh it’s it’s there’s many different variables go into it uh the type of house whether it’s a brick house or a frame house when it was built st louis is you know the city of st louis has tons of brick homes built 100 years ago on stone foundation if you go out to st charles county it’s a ton of frame houses built you know 20 30 years ago those are rated completely differently then you taking the factor uh type of roof how old the roof is and different exposures you have around the house if you have a pool or a trampoline in the backyard if you have a dog that’s been known to bite like a pit bull or rottweiler you take into account just you know the age of the home there’s a lot of different factors and then you gotta take into account claims history whether it’s uh you know if you had a prior house and you had a loss that’s gonna follow you for a couple years you don’t just kind of get to escape it if you’ve been shown to have a high prob higher probability of having a loss because you’ve had one before that’s going to affect you and then the whole market as a whole as we saw after the tornado in joplin in 2011 i think it was uh that plus about a week later we had a massive hail storm wide spread around the area those factors are going to play into rating uh for any property but especially homeowners policies so long story short there’s not an easy simple you know easy button to come up with insurance rate there’s a lot of different factors that go into it yeah i remember this is a long time ago but i was going to buy this building down in benton park and rehab it and it was a big three-story brick building and insurance i talked about it and the insurance is going to be way higher than i would have expected because it was not going to be that much of a purchase price but you know come to find out the walls like these brick walls are three bricks thick when they built it right it’s like the outside brick some sort of weird middle brick and then the inside brick plus then the plaster and so they’re to replace it like that like they just don’t build them like they used to right it’s just why they cost so much more i guess they don’t and that kind of goes back to our talk about why to use a broker but some of the coverages we see that we pretty much almost you know in our heads require us to recommend are especially around here earthquake coverage like i said all the brick brick and stone foundation homes in the city if there’s a big earthquake those are not built to sustain uh you know that ripple effect uh the frame houses for the most part are and anything built after 1960 is generally in good shape as far as an earthquake goes but you know earthquake insurance we we highly recommend water backup water water losses have been huge the past couple years and then some other stuff you might not even consider uh debris removal if as you know we’ll talk about with your with your uh family’s recent loss of your rental property uh debris removal is often overlooked in policies and it’s it’s not generally included in the replacement costs some carriers it is some it’s not and then ordinance and law is another coverage that uh sometimes is overlooked if you have a house that’s 40 years old and you’ve had the same inhabitants the whole time and the house burns down there’s going to be a lot of stuff they have to change due to code it’s not going to be like new or like kind of quality they’re going to have to upgrade it and that takes into account some of those additional costs you may not consider okay yeah so we’ve been kind of like um mentioning this but we my family recently had a house that was my aunt’s house she passed away and then we rented the house out and then the house burned down you know the tenant i guess knocked over a gas can or whatever and uh next to the water heater in the house burned down and so a which is pretty awesome as you came out and met with our family which was great um but then there there are all these different numbers and categories and stuff that have come into play with that and i guess that’s what you’re talking about right so in that case we must have had did we have the acv or the replacement costs we had replacement costs on it uh for 250 or 260 000 uh it’s you know a 1500 square foot frame home on slab uh and we found that to be a pretty adequate valuation yeah so the way that that ended up working out is that i guess the insurance company gave us the money to for the replacement cost of the property and in this case we’ll probably end up selling the lot so i think that like financially it ended up working out you know okay for our family um but then you you mentioned that you had like there’s personal property coverage there’s liability coverage so we had personal property coverage which didn’t have very much of it in the property but that’s actually that was money that the insurance company then let us use to pay towards the demolition of the property is that right uh correct uh so there’s i should have kind of touched on this earlier but the four main types the the building insurance there’s coverage a b c and d coverage is a dwelling that’s you know the full replacement cost uh if you have the replacement cost policy uh you have after that the uh the other structures which is you know a patio or a detached garage or something in the backyard that’s 10 of the dwelling value that’s already built into the policy personal property is generally somewhere between 50 and seventy percent of that dwelling value say you have a dwelling value of a hundred thousand uh the first the other structures are going to be ten percent so that’s you have ten thousand dollars personal property is going to be fifty to seventy percent so you have fifty thousand seventy thousand dollars and then the loss of use is generally twenty percent of that same original hundred thousand dollars so you get about twenty thousand dollars for that um cincinnati our carrier in that one uh who’s one of our top carriers here with has been great uh part of what we pride ourselves in is putting our clients with carriers who have excellent claim service uh you know they’ve kind of walked you through the whole process step by step explained it to you been open with you and that’s what kind of sets our our our self apart as brokers we put you with with carriers that we know have good claim service um as we’ve seen it seems like uh your family’s been happy with yeah i can totally vouch for that i you know what it’s it’s almost like we probably take it for granted that we get you know a guy from the company that comes to the house that talks to us that answers our emails and all that stuff and we just probably are taking that for granted because in theory if we would have gone with one of these other companies that we mentioned earlier we might have just been like emailing some call center somewhere or call you know emailing some customer service department or whatever um instead of having that great one-on-one and and you’re right that that is important and it’s funny that i didn’t even think about how important it is until you just said it and i thought about that there was another option you know right in our business relationships matter it’s not just the people like you and your family work with business careers where we work with too we have great relationships with them those relationships are just as if not more important than with our clients yeah so i think that most of the people that are going to be watching this video is going to be uh you know in most cases hermann london clients that are recently put a property under contract to buy it and they’re just wanting to get more information about insurance so um which is something that us as the realtors is saying you need to be getting insurance to talk to your insurance people and of course their lender is saying hey who are you getting your insurance from give me their information i need a copies of the policies or whatever so i guess you deal with the mortgage brokers and bankers a lot on that side of things right so we we have a great staff uh we we have um uh you know we’re set up a little bit differently we’re all uh individual uh small business owners we have uh our staff that crane provides but we kind of dictate what they do but you know peggy’s my assistant if there’s any issue that comes in uh through a mortgage broker or a client or whoever they contact her she gets them the stuff they need she goes the carriers get the the deck page the uh information for the mortgage people uh sometimes for the realtors if they’re looking for a potential uh cost uh but we’re a full service firm it’s we we provide all that stuff yeah yeah okay and is it um is it a requirement that you guys go to the property and do some sort of walk through or walk around prior to giving the insurance uh no it you know it’s it used to be but obviously things have changed since since you and i have been in our uh you know out of college uh google earth is a great resource uh but but generally speaking homes that are uh replacement costs under a half million dollars sometimes people go out and do a drive by a lot of times especially in the current environment around with a pandemic currently going on a lot of carriers have held back from doing in-person inspections they’ll do a drive they’ll do google earth go on the county records website find information on there uh for homes over a half million dollars uh especially over a million dollars the carrier will almost always uh either insist or highly recommend an in-person walk-through so they’ll come through uh kind of walk around the house take a look at all your utilities all your services make any recommendations that may be preventative resources for you but then they’ll give you a full uh inspection report so this is what we found uh this is in good shape this might need to be looked at so on so forth it can be a good tool okay and then i think you you mentioned joplin earlier was that when the rule came out that the you wouldn’t not you but insurance companies would not insure any property with the roof that’s greater than 19 years old is that still a thing well it kind of evolved from that uh it’s been missouri is right in kind of tornado and hale alley if you will uh it’s every year we’re we’re kind of you know crossing our fingers not a big hail storm or a tornado like we saw down there but to answer your question it’s kind of roofs different carriers have different requirements what we’ve generally see is any home over or any roof that’s over 10 years old uh they’ve been putting acv exclusions or acv limitations on the roofing stuff so if you’re if your roof is built within the last 10 years you get the full replacement cost but if it’s over 10 years or over 15 years whatever the carrier requirement is they’re going to give you a depreciated cost to replace the roof so if you if you have a hail storm at your house today and your roof is 15 years old uh they’re going to come out and say we’re going to give you the cost to replace the roof less the depreciated value of the roof so if your roof is you know cost ten thousand dollars for your place and they say it’s depreciated by two thousand dollars since it was first put on then you’ll get that eight that you’ll get eight thousand dollars and then you’ll still have to pay the deductible so you may only get you know seven or six thousand dollars depending on what your deductible is okay uh so let’s talk about uh knob and tube wiring if you don’t mind and it kind of it kind of uh plays into this other question i have which i guess a lot of older homes have this wiring called knob and tube wiring you know someone can google it if they want to but essentially i guess it’s the type of wire that causes is more likely to cause fires but what we see happen is a lot of people say hey i want to replace the knob and two wiring in my house they hire an electrician they come over and they seem to just replace it like where they can see it they replace it in the basement they replace it in the attic but it’s still all through the walls you know and they may or may not even know that and so i’m curious like obviously people can get insurance still when there’s not been two wiring but if you’re not if the insurance company is not coming out and inspecting then they’re i guess leaning on asking the buyer is their knob and two wiring and if the buyer says no and then three years later the house burns down because of the knob and tube wiring do they just not have coverage or how does that work well it’s it’s kind of a step rushing right it’s kind of a slippery slope you touch on let’s talk about what knob and two wiring is first and foremost kind of people get a understanding of it but you know between the 1880s and the 1950s people didn’t need a whole lot of electricity in their home so knob and tube is a two-prong wiring um nowadays there’s you know every out most every out modern outlet you see has a three prong so the knob and tube has no ground wires not doesn’t have the the the big one uh and with the demand for electricity uh with you know computers tvs is all the stuff we have in our houses there’s a higher risk of of a short or a surge in a potential house fire uh the other thing is knob and tube uh wiring is generally covered by a cloth type fabric that kind of deteriorates over time it’s not good light or a damp environment it might you know diffuse or hit something in the spark so knob and tube wiring makes it pretty tough to get coverage it’s not impossible but you’re gonna pay more for it what we if the insurance company’s not coming out inspecting uh then it kind of if it’s a new house purchase you should have a good inspector come and look and make sure there’s it’s either been all extricated or all replaced um but in the event that you mentioned that you know it’s just overlooked and it causes a fire uh there would be coverage for it there may be litigation involved after it uh between the homeowner the insurer and whoever else but we recommend you know if you’re going to purchase your home make sure you have a good inspector come out have a good electrician come out make sure all your stuff is is in good shape because potentially if you mark that there’s no doubt in two wiring your hub in your house and then get the insurance policy and they’d come out and determine there is coverage could be uh diminished or possibly even declined yeah yeah okay that makes sense i’m i’m glad you’re saying that you know you’re kind of mirroring what we’re telling the people about getting good inspections and and all that kind of stuff and i just think that people should really be basically honest with their insurance provider so that they don’t have anything to hide you know great we’re not trying to you know take you through the mud or drag it down but we want to provide the best protection for you but we can only do it based on the information you provide us for the most part we have a couple resources for the basic property information but it’s really just kind of a the honor code if you’re telling us bad information then you’re i don’t want to say you’re committing fraud but it’s it’s questionable well yeah and then you know like with our house that burned down recently there’s professionals that come out they hire this like fire expert guy or whatever he comes out and he’s digging through it and he he found out why that fire started you know it’s not like they’re not going to find out so anyway not to end on a bad note you know um i’ve been thankful to be working with you for so many years uh it’s i’ve met other people that say hey i call the reedys for insurance you know so we know you’re with crane but i just think of the reedys as my insurance providers i appreciate that i’m wondering how can people get a hold of you if they want to call you sure i appreciate the opportunity to work with you for all these years adam there’s a couple ways one craneagency.com is the quickest way uh you can also call our main switchboard 314-241-8700 uh they can direct you to anybody and we have 85 brokers throughout four locations i work downtown we have an office out in chesterfield we have a small office down in springfield missouri we have a few guys out in uh in kansas city kind of working from home as we develop our footprint down there and we have a small office in the central west end as well but the main way 314-241-8700 or craneagency.com uh are the two best ways to contact with us yeah absolutely and if someone wants to call you they need to make sure that they mention the junior part on the end of your name right because your dad still works there doesn’t it if it goes to my dad i’ll i’ll probably pick it up anyway just click i’m adding junior to your name here all right perfect anything else you want to say i appreciate your time today you know the one thing i might add is when uh for the personal property people tend to overlook uh how much to put on there but in the event you do have a loss it might be good just to walk through your house and either make a list or take a video camera on your phone and just kind of record all the stuff you have if you have a loss and you have to go through and think about all the stuff you had it’s going to be tough unless you have documented proof of it and a carrier or somebody may ask for that as well the second thing we’ve talked about the replacement cost a lot of carriers are adding special endorsements on your policy be it a guaranteed replacement cost or uh additional 25 replacement costs look for some of that stuff on your policies uh whether it’s through me or somebody else but a guaranteed replacement cost is in the event of a major loss say a tornado comes and wipes out a neighborhood you know the cost of materials is going to go up the cost of labor is probably going to go up as the as the supply of those materials goes down it’s basic economics but say you have a 400 000 house we mentioned earlier but after a massive storm it’s going to cost 500 000 replace you know if you’re only up to cover up to 400 000 guess what you’re getting 400 000 guaranteed replacement costs you it’s pretty affordable it’s pennies on the dollar really but it guarantees no matter what happens you’re going to have the full amount to replace your place your home well you make sure you check that on my policies that’d be great thank you very much mike um i appreciate your time today actually if anybody is still watching amazingly i want to will you give a quick and i know i’m throwing you on the spot here um a quick two seconds on these umbrella policies sure umbrella is just a basic you know uh additional amount of liability it’s your homeowners provides a certain amount and your auto insurance provides a certain amount we always recommend a half million dollars just to be conservative but a lot of carriers if you want to qualify for an umbrella you have to meet a certain threshold so your homeowners provides you liability for any potential negligence or something you’re liable for your home your auto provides liability protection for what you do uh driving your car around the umbrella covers all that and just provides an additional one two or three million dollar limit uh for a pretty affordable rate generally about 150 dollars the first million and uh incrementally less uh as you rise from there so that’s the umbrella i have an umbrella through you that’s all about liability reduction right the case um just do something crazy umbrella’s just additional liability uh for it basically protects your interest rather than having somebody come after your own personal assets yeah and i think that’s a good um it’s a really good fit for somebody like me with kind of like multiple properties and all this kind of stuff it’s i got a lot of things going on and so it just feels good to have that extra coverage and as you know we’re at the stage where we both have young children and we’ll have kids coming over house and stuff like that you never know you know what what kids are up to it’s always good to have an additional million or two or at least consider it just to have it uh have additional peace of mind in case something goes wrong yeah perfect thank you for your time today mr reedy hope to see you soon thank you and uh my pleasure take care have a great one bye you to