16 Nov Ep. 34 Homeowners Insurance with Tony Berra
Email questions to PODCAST@HermannLondon.com
3:40 What is personal property
4:04 Can you customize your coverage and is there a range
5:19 Insuring for the cost of rebuilding
5:30 Can the city make you rebuild
6:30 Rebuilding up to code on a house that was grandfathered in
7:20 Who takes over a property if the owners take the money and run
8:40 How much homeowners insurance do you need
9:50 Flood and earthquake insurance
11:57 Not all insurance companies offer earthquake
12:50 What homes are the most expensive to get earthquake insurance on
15:30 Not getting dinged on a zero dollar payout
17:00 After 11-12 years the roof’s value starts depreciating
18:00 There is no penalty if the inspectors don’t find anything wrong
19:27 What really effects premiums
21:50 What can lower your premiums
22:40 Liberty Mutual has an agreement with the National Association of Realtors
23:30 What’s the discount on having a security system
23:40 How does a pool effect premiums
24:55 Criminals have sued because they were injured
25:21 Get an umbrella policy if you have a pool
25:29 Replacing knob and tube wiring
28:00 Lying about insurance is stupid
29:25 Bars on windows
31:13 Everything is pointed on an insurance score
33:13 Financial hardship discounts in Missouri
34:30 Recalculating the quote for a better rate
37:10 A neighbor’s tree fell on my property
38:10 A neighbor’s house catches on fire
39:00 Who gets the money first in a lawsuit
40:00 A sewer backup is in your control and you may need water backup coverage
41:30 Insuring vacant houses
43:00 Covering and inventorying jewelry, furs, and electronics
44:00 Home Gallery smartphone app
46:30 Is there a simple formula to estimate insurance
50:30 Who lives under Tony’s roof
50:55 Where is Tony at his best
51:14 What is Tony’s favorite blog or podcast
51:48 What is Tony’s guilty pleasure
52:11 Who is Tony’s mentor and how has he thanked them
Adam-Welcome to the St. Louis Realtor Podcast live from the rooftop of the Hermann London Real Estate Group. This is podcast 34 all about homeowners insurance. My co-host Shannon St. Pierre is here. Our special guest today is Tony Berra with Liberty Mutual Insurance. We’ve got a lot of questions for you tonight. As Realtors we deal with insurance a lot and we know you are always changing the rules up on us whenever there is a big storm somewhere. Tonight we are going to find out what’s really going on.
Shannon-I think we’ll dive right into this since I have so many questions after reading my policy.
Tony-Isn’t it 47 pages or something?
s-It is. What is covered with homeowners insurance?
t-Standard coverage is going to be the home itself. Your second thing is other structures but not everyone has those. It’s for a shed or a gazebo or detached garage. Typically other structures accounts for 10%.
s-Could you eliminate that?
t-No. It’s always going to be 10%.
a-Can you not get insurance coverage?
t-No. It’s already factored in.
a-You are still paying for it?
t-It’s already baked into that initial dwelling amount. It’s not costing you anything more. Something else that’s covered is your personal property. If you were able to take the roof off and shake your house while it’s upside down, everything that falls out is your personal property.
s-Can you customize your coverage to bring down costs?
t-There is. Most of the time what’s decided on what it costs to rebuild your home is decided with a cost calculator. You can get very detailed on a room by room basis with things like hardwood floors, granite counter-tops, finished basement. All that stuff is going to be in that dwelling. People don’t consider that the replacement cost may be $200,000 but they only paid $175,000. They don’t consider the cost to rebuild and fix those things. If a fire burns down half your house you are going to have crews, dumpsters, and debris removal too.
a-I’ve heard an insurance person say you want coverage for the rebuild cost because it’s possible that the city could make you rebuild.
t-Typically from my understanding you could take the money and go but as far as an eyesore or liability…
a-You could leave a vacant lot?
t-You could do that.
a-It’s interesting that a brick city house could cost more than a stick frame house in Chesterfield and it’s because of the rebuild cost not the location.
t-That’s baked into a homeowners policy. 10% for laws and city codes. Things on an older home may not have been up to code back in the day but is grandfathered in but if it’s demolished, that 10% ordinance would be allowed to update the house to proper wiring and insulation.
s-If the house burns down and they take the money and go, who is responsible for that property? Does the insurance company own that building?
t-A lot of the times the city takes over the vacant property.
s-Is that only after they don’t pay the taxes for 3 years.
a-People would still own the property but the city might tell them to clean it up.
t-You can’t leave a hole in the ground with rebarb sticking out. You could be sued.
s-How much homeowners does someone want to get? Are there state minimums?
t-You always want to insure for the replacement cost. Earthquake and water backup can be added after the fact.
s-Let’s talk about flood and earthquake insurance. They are not part of it. I don’t think people think about them.
a-People should obviously get that. How much is the pricing in general?
t-Not everyone can get a flood policy. It’s all regulated by FEMA and being in flood plains. You may be required to get flood insurance.
a-You can’t sell me insurance if I have a house on a giant hill?
t-Nope. It has to be on the FEMA flood plain map. It’s typically the 100 year map but it’s forever changing with the government.
a-What happens if the flood plain map goes through a tiny part of your property.
t-You have to get it if it touches anything on your property.
s-Do all insurance companies offer earthquake insurance?
t-No. With us it is 15% for the deductible to replace that home.
a-The earthquake insurance must not be that expensive if the deductible is so high.
t-It’s more expensive for brick homes and it is zip code related.
s-Is earthquake insurance going away?
t-There are companies popping up that allow you to buy just earthquake insurance. They are taking a gamble by offering that product.
s-If something small happens to the house what is the threshold for filing small claims and how much does it increase premiums?
t-It’s typically a 3 year period. There is not an exact science for how much it increases. With claims, you have insurance there for a reason so why not use it. Some people pay out of pocket instead of making the claim.
a-That’s a gamble. You’d think it’d be better to go through insurance. With health insurance I’m paying towards my deductible for the year.
t-Homeowners is different. You pay per occurance. With Liberty Mutual people have that angst about how much it’s going to cost. We don’t ding you for a $0 payout if we have someone come over and they don’t find anything.
a-If a tornado happens in Joplin then everyone is going to get dinged.
t-Insurance is a giant bucket of money that we all throw into. If something like Joplin comes in then the whole state will feel the ripple effects.
a-Didn’t a rule change happen with old roofs not being insured?
t-After 12 years, the roof becomes a depreciated value as opposed to a full replacement cost. They are going to assess what your roof is worth at that time. You are basically getting blue book value.
s-That is only once it reaches that 11 or 12 year age?
t-Yes. You will get the replacement cost. You also gambled that you are going to ride this thing out since there are no water spots on the ceiling. You’ve been saving money every year by not making a claim on your roof.
s-Do you penalize people that want you to check if there is hail damage?
t-We are not going to hurt you for a $0 payout. We have roofing inspectors who can come out and tell us what the damage was caused from and if it is pre-existing damage.
s-I feel like there is so much that goes into premiums and no one really knows the full calculation. What I’ve heard is that it depends on your personal credits, previous claims by the person and the house, occupation, and house alarms. What affects premiums?
t-Typically one of the major things is the person’s age. If you are a first time home buyer at 24 years old you tend to entertain more and something could happen. A lot times your credit is not what it would be compared to our parent’s age.
s-I don’t think it takes that long to build up your credit.
t-It depends on your address, age, and occupation.
a-There is a huge algorithm you guys use.
a-Can you save with things like smoke detectors?
t-Being married helps as well as having multiple policies.
a-Is there a Realtor discount?
s-If you ask for it Tony applies it but it’s only through Liberty Mutual because they have an agreement with the Nation Association of Realtors.
a-What about a security system?
t-There is a discount but the alarm companies lie about how much you will save. When they say you will save 20% and that is a number from the 1980’s. Everyone has cameras that they can look at through their phones.
a-I am under contract to buy a house now and it has a pool with a diving board and a slide. I thought my guy was going to triple my policy.
t-The most important factor is if the pool is fenced in and do the gates lock. Are you able to keep people out.
a-If there was a claim that someone got hurt I would be better off if they had to break the lock and jump the fence?
t-Your story would definitely be taken into account.
a-I’ve heard that I’m not responsible for the criminal acts of another.
s-I know you’ve heard of criminals suing the owners of the home because they were injured when they broke in.
t-With the pool, did your agent recommend and umbrella policy? That is one thing that I always recommend doing.
a-When I got married we did this whole crazy insurance evaluation and we ended up getting an umbrella policy.
s-We know knob and tube is a problem as far as some insurance carriers are concerned. Some will not insure you.
t-Underwriting is ever evolving and almost everyone is in that category. People are grandfathered in though.
s-What if you don’t know there is knob and tube and then the house burns down? Is it possible that they deny the claim?
t-It could be a possibility. It could come back on the inspector if they didn’t notice that.
s-Now you go in a big circle. The inspector may say they couldn’t have known unless they took down all the drywall. This happened in my home. They renovated one part of the house and then connected to the knob and tube.
a-I find knob and tube to be interesting. I think people lie to their insurance person so that they can get insurance and it will be cheaper but they are crazy because every month they pay and when the house burns down 10 years from now and then the insurance company denies your claim. Now they have no insurance because they lied about their knob and tube. Would they have to get the insurance company to sue the inspector if no one caught it?
t-It could go back as far as the contractor.
a-Would I get paid first then they would go after them?
a-Anything before I jump into my 5 questions?
t-Nope but it’s Adam’s one year wedding anniversary and it’s awesome to spend the day with you. Congratulations.
a-Thank you. Who lives under your roof?
t-There are 4 woman and 2 males. I’m one of the males and the other is a dog. I’ve got a wife and 2 daughters and 2 dogs.
a-Where are you your best?
t-I’m my best wherever I am. I always try to be my best wherever I go.
a-Do you have a favorite blog or podcast?
t-You guys have trumped everyone out there.
a-Do you read a website every day?
t-I do social media stuff.
a-What is your guilty pleasure?
a-Who is your mentor and how have you thanked them?
t-I have a few. My father is a big mentor in my life. I don’t know if I thank him as much as I should. We have the same birthday and he means a lot to me. Now that I’m a father I’m constantly thanking him for everything he taught me.
a-Thanks again Tony for being here. Give us your contact info one more time.
t-The email is Anthony.Berra@LibertyMutual.com and the phone numbers to get a hold of me are 314-922-4912 and 314-580-4284.
a-Awesome. Thank you very much. Don’t forget to follow us on iTunes and YouTube. If you have any real estate needs or want to become a Realtor, call us at 314-802-0797 and if you have any real estate needs you need to call Shannon St. Pierre. What’s your number?
a-Are you Shannon at Hermann London dot com?
a-Thank you both for being here and we will see you all next time.