Homeowners Insurance Q&A - Interview with Charles Lindberg

Speaker 1: [0:00] Hello, hello, and welcome to another episode of the Awesome in Seattle podcast. This is Christian Awesome, your host, and the founder of the Awesome Nossum Group here at Wilson Realty. And as always, I am joined by my amazing sidekick, co-host, the one, the only, the data guru-

Speaker 2: [0:17] Jason … Saldarriaga.

Speaker 1: [0:20] I like it. I like it

Speaker 2: [0:22] I'm like, I'm just gonna go in

Speaker 1: [0:23] for it. I'm saying it I'm

Speaker 2: [0:23] gonna introduce myself.

Speaker 1: [0:24] I'm saying it. Um, so today's episode is gonna be a great one for really anybody, because even if you've owned a home, you don't really always know a lot about the homeowners insurance that you're required to have. Um, and if you haven't bought a home yet, you're really in the dark, 'cause you're really trying to figure out what the hell it all means. So today we have Mr. Charles Lindberg from Goosehead Insurance on. He is someone that has helped us throughout the years with clients, referred him to numerous people. He's helped me out. I believe he's helped you out as well, Jason. Is that right?

Speaker 3: [1:02] Mm-hmm.

Speaker 1: [1:03] So- He sure

Speaker 3: [1:03] has … Speaker: we thought, well, why would we try to explain this ourselves when we can get an expert? And that's what we did. So Charles, thank you for coming on today. Yeah, of course, guys. Thanks for having me. Appreciate it.

Speaker 1: [1:13] How this episode is gonna work is we're gonna start kind of basic, and then somewhat build upon with more and more, I guess, uh, harder questions as we go, just so that we can build that, that base knowledge before we go into some of the nitty gritty. That-

Speaker 2: [1:27] And if he's able to answer all the questions, he will win $50,000. Yay. And be crowned America's Next Drag Superstar.

Speaker 1: [1:40] All right, Jason. Jason's paying that out of his own

Speaker 2: [1:42] pocket. I just love how you, you introduce it, it sounds like a game show. Like, the questions will get harder as we progress.

Speaker 1: [1:47] Exactly. If you hear this noise, that means you're incorrect. Meh. Yes. Aw. So, let's, uh, let's get started. So what is homeowners insurance, and is it required? And if it is, who is it that's requiring it?

Speaker 3: [2:03] All righty, yeah. A nice easy starter question. Love it. So- … uh, yeah, homeowners insurance is gonna be required any time you guys, uh, or someone has a mortgage on a property. So similar thing if you have a loan on your car, your bank is gonna require you have car insurance. Same thing for the mortgage, uh, with regards to your home insurance. So your lending company will require that, whoever, whoever they may be. And, uh, home insurance is a, you know, the, the chief thing we care about is insuring the home itself. And something that's good to note is home insurance, uh, the primary function is we're ins- we are insuring the rebuild cost of the home. So your home might be worth a million bucks, but if the rebuild cost is $450,000, that's the amount the insurance company is gonna… You know, that's the number they care about to insure the home. And the home insurance does other stuff for you as well. It's really kind of a package policy, does a lot of different things. They're all gonna be included, and your insurance agent or broker should kind of review those with you to make they, sure they all make sense. But yeah, that's pretty much it in a nutshell.

Speaker 1: [2:58] So let's go over that a little bit deeper. You said, you know, I s- my home's worth a million bucks. The replacement cost is only 400. What does that mean? What are they replacing, and to what extent?

Speaker 3: [3:09] So what the insurance company does anytime someone's buying a new home is they basically put all the details, dimensions, features, finishes, all that stuff into the software for the carrier, and then they take a look at all that and spit a number back out that says, "Okay, based upon everything you just told us about this house, we think this is what the rebuild cost is gonna be." In other words, if the whole thing burns down to the foundation- Mm-hmm … we gotta get people back in there. They gotta haul away the debris, rebuild it the way it was with the same styling, same finishing, same quality. Uh, so you're basically… I mean, you're getting what you had before. That's the whole idea, right? Got it. It's identity. You're, you're getting what you had before, and that's what they care about. So the market value, yeah, it might be a million bucks because of the location or the, the hot market, but, uh, the insurance company just cares about, um, labor and materials pretty much.

Speaker 1: [3:53] Yeah, 'cause they're not… Uh, you still have the land. Right. And part of that million-dollar value is the land and your location and all that stuff. So the insurance, they only care about rebuilding the actual structure, which is what you're insuring.

Speaker 3: [4:04] Exactly.

Speaker 1: [4:06] Let's go over what is not covered by insurance. So I've… Everyone's heard of earthquake insurance. I assume that's something that is additional. What are some other things like that?

Speaker 3: [4:17] Yeah, the, the two big things I always mention to every person is that flood and earthquake are the two major items that home insurance does not insure just on the base policy. You can address those if you're concerned about either of those via a secondary, uh, standalone policy, and those are the, the major things. So most people buying here in the greater Seattle area where we are, uh, they're not gonna be in a high-risk flood zone, so they're probably not gonna be required to have flood insurance on their loan. But if you buy someplace that's more rural, maybe next to a river or other body of water, chances are you might be in a high-risk flood zone, so you might need to get that. But, but apart from those two big things, in general, try to… I know it's, it's, it's, it's- Yeah … tough to give people absolutes without reading the policy and looking at the exclusions, which are all spelled out in black and white.

Speaker 2: [5:02] Mm-hmm.

Speaker 3: [5:02] Um, in general with home insurance, if something happens and it's sudden and accidental, there's a good chance that sort of thing is gonna be covered by your policy. So where people get into trouble are issues regarding, like, poor maintenance. So especially roofs are a big thing. If you have your roof just sitting on there for 20, 30 years, you never really do much with it, there's maybe some moss build-up or maybe one of our winter storms kinda messes with the shingle alignment or one gets blown off and now water has a chance to penetrate, that sort of a situation's where your insurance company's gonna say, "Well, you should've done a better job, you know, looking at your own roof." And, uh, you know, that sort of, uh, event that happens over time, like water that damages over time, probably not gonna be covered on your policy.

Speaker 1: [5:44] Got it. Um, I'm gonna take a quick step back and explain kinda how you work and how you operate in terms of what insurance company or companies you work for- Mm or are able to provide so that people kinda know that you're not just, you know, selling one specific product or insurance company. So why don't you kinda explain how that works, how you work really?

Speaker 3: [6:07] Okay. Yeah. So I'm a broker, which means I work with several different insurance carriers. And, uh, there's, there's different models in the insurance industry. There's some companies that, uh, you know, just like me, they're also brokers. There's folks that are direct carriers, so Geico is probably the, the best example. You can go online directly with them, and you don't need an agent or anyone in the middle. Uh, and then there's also captive carriers as well, like State Farm, Allstate, Farmers, American Family. Uh, and those folks, they have one product, and they, uh, they are still business owners but they- they're really tied to the company much more strongly than folks like myself. So, uh, yeah, really my job is to chat with the new client, get all the details together, and then figure out which carrier that I represent is gonna be the best fit for them given their coverage needs or unique things about their household. Like, maybe, uh, they have a certain kinda dog that some of our carriers don't like, so we gotta make sure upfront that we're, you know, filtering those out. And, um, you know, not presenting you a carrier that, oh, shoot, the next day I realize, oh, we actually can't write you with this carrier, I gotta find a different option. So that's pretty much what I do. I shop with the carriers that we represent. Some of them you folks will know, like Progressive, Travelers, Nationwide, Safeco. Uh, those are some of my top carriers that I use more frequently, but there are o- other ones that we have in our portfolio as well.

Speaker 1: [7:22] Cool. And I know the follow-up question you always get after that is how much do you cost? 'Cause that's what I would ask if I were in their shoes.

Speaker 3: [7:30] Yeah. No, good question. So every insurance agent, uh, you know, with any company, is gonna get a commission based upon the total premium of the given policy. So for example, let's say your home insurance policy's $1,000 per year. Typically, the average commission's gonna be in the 10 to 15% range. Uh, that's gonna vary by carrier. Uh, so the, the, that cost is all kind of factored in already to the cost of the policy. That's not an additional thing that you pay on top of it. The agent just gets that every time you sell a policy or the policy renews. So they, you know, keep you around for years and years and years so that they still get that renewal, uh, income. Uh, some agencies like ourself as well, we do charge a one-time fee for our services, and, uh, we'll go into, you know, more detail I'm, I'm sure on exactly what I do that's above and beyond, uh, other agencies to justify charging that fee. But typically it's 199, and we only ever charge that once at the new business.

Speaker 1: [8:25] Okay. Sounds good. So you're able to find the best deal for someone, and other than a potential $199 fee, you're, you don't have to… I guess the buyer doesn't have to, uh, pay anything extra. So that's good to know. Mm-hmm. All right. So let's talk about maybe some things that could possibly increase the price of your homeowners insurance. I know, like, we have a lot of older homes in the city of Seattle that have knob-and-tube wiring. Yep. Uh, we also have a lot of hills and things like that. So let's, let's talk about that.

Speaker 3: [8:58] Sure. Yeah, knob-and-tube, uh, it still, you know, comes up, uh, as a potential issue. And just what I've noticed, it seems like over the last 10 years or so fewer carriers are still willing to accept homes with knob-and-tube. There still are a few that will do it, and the good news is, uh, it doesn't seem like those policies for those properties are, you know, double the cost of what they should be. They still might be a little bit more expensive than if there was no knob-and-tube present, but you can still get coverage through certain carriers with things like knob-and-tube. But in general, other things that are gonna impact your home, uh, insurance cost are gonna be typically the age of the home. So, uh, if it's older, maybe there's, uh, you know, just a general cost increase. Uh, insurance companies love brand new homes, and also specifically they love brand new roofs as well. So this is good for anyone who might own a home or rental property right now. If you've replaced the roof in the last five years or you're thinking about doing it soon, check with your insurance carrier because most carriers will offer just a straight up discount just for new roofs. So it's, that's a good thing to check out as well.

Speaker 1: [9:58] Don't know if you heard that, Jason, but that's a big deal. Mm-hmm. We were just talking about that earlier today.

Speaker 2: [10:02] Yep. I'm, I need a new roof. That is, uh, actually plural.

Speaker 1: [10:06] Yeah. Okay. Um, I'll explain real quick what knob-and-tube wiring is just so those that heard it and they're like, "What the hell is that?" Yeah. Uh, knob-and-tube wiring is basically just an old, very old style of wiring that's not necessarily very safe, and there are definitely homes that we run across that still have it. So if you do, it makes it a little more difficult to get insurance and it might be a little more expensive. It's probably gonna behoove you to upgrade that wiring at some point. So just throwing that out there.

Speaker 2: [10:39] Exactly. Really quick, what about certain types of siding? Like, uh, does cedar shake, for example, cause any issues or increase premiums?

Speaker 3: [10:48] Uh, typically the, the sidings are a little bit tricky 'cause, you know, most homes around here they're, you know, vinyl or kind of standard siding, so nothing crazy going on. Once in a while we get someone with stucco siding, just… It- it's super rare, but what I do see from things like stucco or kinda non-standard siding here in our area is, yeah, the cost is a little bit higher, and most of that really is just based on the reconstruction cost. So that's just inflating the amount of insurance you need for your home versus just having a kind of standard siding here we see in our area. So yeah, it… Those kinds of things on the, on the siding is, uh, they're not gonna be a huge factor. It's just gonna increase the, the amount of insurance you might need for the home to rebuild it.

Speaker 2: [11:24] Gotcha.

Speaker 1: [11:25] Got it. Good to know. What about, um, like steep slopes or anything like that? If a house is on anything like that, is that gonna be an increase in price or make it harder to get insurance?

Speaker 3: [11:36] Only if it is also affecting the type of foundation you have. So if, uh, let's say half of your home is slab on the front and then there's a steep drop-off in the back, and now you got the back half of the home it's, um, you know, post and pier or pilings or something like that, that might limit your options on just the number of carriers that are willing to accept that depending on the percentage of slab and, you know, the different foundations. So the slopes itself, not a problem unless you're looking at earthquake insurance. Then the earthquake insurance carriers are always asking, "Is this a flat slope? Is it medium or is it super steep?" And that's gonna affect your pricing for, for earthquake insurance specifically.

Speaker 1: [12:13] Let's talk about earthquake insurance since you brought it up.

Speaker 3: [12:15] Okay. Yeah.

Speaker 1: [12:16] Um, you said earlier that earthquake, just like flood, is a separate policy. How do you get this, and what properties are okayed to get earthquake insurance? Can every house get it?

Speaker 3: [12:27] In general, yeah, uh, every house can get it. It becomes more difficult the older the home is. So for instance, one of our carriers, they have a cutoff at 1955, just for an example. So if a home is built prior to 1955, I just know right away I can't use them. I have to use one of our other earthquaking carriers, and the cost is probably gonna be a little bit higher going that route 'cause that carrier, yes, they accept more homes and they're more flexible, but that does come with a little bit of a cost. For most of the homes in our area, I haven't seen a home where all of our carriers just said, "No, no, no, no, no, we can't do it." Uh, but I'm sure I, I could still, I could still stumble across one where it's a, a no-go. But, uh, around here, uh, I'd be hard-pressed probably to find one.

Speaker 1: [13:08] Okay. And then does the home or does the foundation need to be earthquake retrofitted in order to get earthquake insurance?

Speaker 3: [13:16] Some carriers will require that, and again, there might be one or two that don't. Uh, if the carrier's more flexible like that, in general the cost might lit- be a little bit higher. I have had that question come up before with clients buying a property and they said, "Hey, is it worth spending the money to get the foundation checked out and retrofitted and all that stuff?" I said, "You may as well just for the sake of doing it." And then, and some carriers were, were fine with it and some said, no, this has to be retrofitted, especially if it's built before 19, you know, then they, they give a, a year. So-

Speaker 1: [13:43] Mm-hmm … Speaker 3: uh, it depends, but it's not gonna be a hard requirement. Okay. Good to know. And for those that don't know, retrofitting basically means you are essentially strapping your actual stick and wood, uh, structure of the house onto the cement foundation. That's a very, very, very basic explanation, but that's- Yeah … essentially what's happening. 'Cause normally, a house is literally just resting upon this cement foundation. It's not, like, super strapped on there well. So retrofitting just does that a little better. Let's talk about shopping for insurance. What's the best way to do it? Should people do it? I mean, you always, we always see the one million and two commercials for insurance. How- Mm-hmm … how is the best way, or what's the best way to shop for insurance?

Speaker 3: [14:30] Well, you know, everybody is different. I mean, I don't wanna say that everybody needs an agent, because the fact is there are folks out there who are more than happy to spend however much time they want, say, "Hey, you know what? I'm just gonna do this myself. Uh, should be good enough. It meets the requirements for my mortgage, so that's all I, I really care about." And that's totally fine, and those folks probably are not gonna be a good fit for me, 'cause I have a very heavy focus in education. So one of the general goals I have is when I have a new client and we hang up and everything's totally, uh, in force for the new policies, they felt like they have a… Uh, they really learned something. They have a nice sense of confidence. They felt like they understood what they just got for their insurance. Uh, they feel comfortable about it, and they felt like they, they like me, they can trust me, and they had a good rapport with me. For some people, yeah, they don't need to talk with an agent. But other folks, you know, in general, if they really appreciated the service you guys provided to them, and they worked with a, a good mortgage broker and they like the service they provided to them, chances are they're the kind of person that's gonna wanna talk with me as well. If, uh, if not me, if they have a great rapport with an existing agent with some company they've been with for 15 years, yeah, perfect. If they know, like, and trust them, they should talk to an agent. So I mean, in general, I know it's a long answer, but I would recommend talking with a human being if possible. Because, you know, just keep it simple. You don't know what you don't know. Unless you really want to spend hours on self-education on YouTube and so forth, uh, you can go that route if you like, but, uh, I prefer the human touch, but that's just me.

Speaker 1: [15:57] Yep. Yeah, I… Uh, the reason that I personally use you is because of that education front, and that's also why we refer you, because we do the same thing. As you know- Mm-hmm … we do classes all the time educating people- Yep … um, on how this process works. And so having a lender that does the same thing and an insurance person that does the same thing is awesome. So yeah, it's just, uh- It's great to have that. What are some other benefits of going through an insurance broker rather than straight through a specific company?

Speaker 3: [16:28] Probably the, the first key one is gonna be that insurance brokers work with multiple insurance carriers, and other agents, like I mentioned, the captive carriers like Allstate and State Farm and American Family and companies like that, they just have one product. So I was a captive carrier for five years with another company before I, I quit and, uh, sold that agency and started over from zero again as a broker. So I do have a, a taste and experience in that world, and one of the things that I personally came across is if I talked to 10 people, you know, who were buying houses and they got referred to me and they were excited to work with me is I had to tell like eight or nine out of those 10 people, "Hey, I'm sorry, I can't help you because, uh, the, the rates, you know, just financially doesn't make sense. I mean, the coverage, here's all the coverage I recommend, but you're gonna be paying X amount or X percent more, and I don't think this is a good fit for you." So I just got that experience of it, the, the carriers, they have one product and it's like trying to jam a, a square peg in a round hole or however that one works. Um, and so yeah, you'll, you'll get, you'll get a decent fit for, for most people that go via one company, but is it the best fit? Uh, statistically probably not if you just have one product. Um- Mm-hmm … so that's one of the things I love making that transition to a broker is when you have a dozen carriers or more, there's rarely a chance or really a time when I, I come across a client, I go, "Hey, you know what? You're in a great spot. I'm happy to call you next year, but for right now, stay where you're at." That just doesn't happen nearly as often.

Speaker 1: [17:51] Yeah. That's gotta feel good for you.

Speaker 3: [17:53] Oh, yeah. You

Speaker 1: [17:54] can actually tell people.

Speaker 3: [17:55] I know. Yeah. It was a, it was a huge, uh, a huge psychological shift when I was able to start saying yes to people.

Speaker 1: [18:01] Yep. So we always hear like you can save when you bundle your car, home, and, and I don't know what else- Mm-hmm … policies together. Is that true?

Speaker 3: [18:11] Uh, yeah. 9 times out of 10 I'd say yes, that's definitely true. On occasion we do have clients that have auto with one carrier and home with another. Uh, sometimes it's due to, you know, underwriting reasons where the carrier that was doing an awesome, killer job on the auto wasn't able to insure that property for a certain reason. And so we kind of ran through the different options, ran through the numbers with the client, said, "Hey, here's the situation. This is what we recommend." So that doesn't happen super often here, but yeah, most of the time it, it's an overall cost savings and that's what we try to go for for our clients.

Speaker 1: [18:42] Cool. Let's talk about umbrella policies. Uh- Hmm … let's start, like, super basic. What is an umbrella policy, and why should probably most people have one? Well, maybe not. You tell me, should most people have one?

Speaker 3: [18:54] Yeah. Well, of course I'm, I'm always biased, right? I- Yeah, of course … I err on the side of more coverage versus less-

Speaker 1: [19:01] Yes

Speaker 3: [19:01] because, I mean, unfortunately I, I've seen, I don't wanna say, like, firsthand, but I've had more, more encounters with what claims actually go for, what costs are, what happens to folks, and then what happens when they have, you know, a certain amount of coverage, um, compared to, you know, what the total payout was. So in general, it's, it's kind of a big question. I'll try to do my best to, to navigate through this quickly for you. But one of the, the, the important things your insurance does is it gives you liability coverage, both on your auto insurance, which is where most people are familiar w- with it, and on your home insurance, and of course if you have something like a boat or motorcycle, those things give you liability coverage as well. And what it does is it basically says, it's a contract with your insurance carrier, and it spells out, hey, this is the dollar amount up to which we will pay on your behalf in case you hurt somebody or something. So that's the, your liability, which you might be liable for in case you hurt someone or something.

Speaker 2: [19:53] Mm-hmm.

Speaker 3: [19:53] So in general, what we want to have happen for every single one of our clients is if you do cause an accident and you are at fault, I want, in my perfect little world, to have the insurance carrier write a gigantic check on your behalf to that other party, and financially speaking, I want you to walk away from that unscathed as if it- You know, basically never happened. Obviously, you know, being in a accident's no fun. There's a lot of things, uh, regarding fallout from that, and it's, it's a hassle, and it's can be traumatic. But on the financial aspect, that's what I can control, and I want my clients to be fully protected so they don't have to spend any money even if they have a big one. So umbrella policies are a way to achieve that little dream of mine. Um, auto insurance in our state with most carriers, same thing with home insurance, the most liability coverage you can get on a policy caps out at half a million dollars. So the question is, well, what if I do more than half a million dollars worth of damage? What happens then? Well, you normally would be on the hook for that overage personally out of pocket, however you might be able to pay for that. And so an umbrella policy, what it does is essentially picks up where your policy caps out at half a million dollars. So it would pay for the overage. And, uh, umbrella policies, their coverage, they start at a million bucks, and they go up from there in case you need more. So with a basic umbrella policy with a million dollars in coverage and your underlying limits on your auto at half a million, you effectively have $1.5 million in coverage to pay for medical bills and property damage. And I know that sounds like a lot of money, 'cause, well, it is. It's a lot of money. It's a million and a half dollars. But if you have the right kind of accident, maybe there's multiple people involved, maybe someone gets hurt, uh, pretty seriously, maybe there's some head trauma, maybe because of the accident they can't work anymore, and God forbid somebody gets killed. I mean, if, you know, put it back on, on yourself just for a moment, whoever you might be listening to this, if somebody hits your family while they, you know, you guys were in your car and something terrible happened to you, your, your spouse or your kids, you know, how much would you wanna sue that person for? And then just flip it around and say, "Well, if you c- if you did that to somebody else's family, how much do you think they would wanna sue you for?" So it, it's a very serious conversation that I always have with everyone because most of the folks I talk to, most of them are h- first-time homebuyers, and most of them are right around the age 30, give or take, and they haven't really checked on their auto insurance or updated their coverages since they were in their probably early 20s. So they're running around with $50,000 in coverage, and then I come talk to them and I'm recommending 1.5 million. So it's a it's a huge jump for a lot of folks. Um, but that's why I recommend it is because in case you do have a big accident, when people talk about peace of mind with their insurance, this is the way to do it. So I'm … That's, again, long example, but yeah, that's umbrella policies. Uh, they're, they're super cheap, guys. They start at, like, anywhere between 150 to $180 per year for a million bucks in coverage.

Speaker 1: [22:42] Yeah. It's-

Speaker 3: [22:42] Uh, so that's like- They're so

Speaker 1: [22:43] inexpensive. So-

Speaker 3: [22:45] Yeah … Speaker: so, so inexpensive. Yeah, they don't get used very often, but when they do, um- Mm-hmm you are gonna be so, so happy that you had one in place.

Speaker 1: [22:51] Yep. Perfect. Thank you. Good explanation. All right, so let's stay in the, uh, the bad lane of, uh, potential issues. Let's say that your house completely burns down due to fire. Where the heck do you live while your home's being repaired- … and does insurance actually cover that?

Speaker 3: [23:09] Good question. So this is one of those coverages I always touch on when we're reviewing the, uh, the policy with our, our new clients. And your policy will include something called either loss of use or additional living expenses. And this is, uh, like I touched on earlier at the beginning, home insurance policies, they're really kind of package policies. They do several different things for you, and one of the built-in coverages should be this loss of use coverage. So let's say you have a kitchen fire, and it's pretty bad, and your family can't live in your home while it's being fixed up. And let's say it takes a full month and a half to fix it up, maybe longer. You need a place to stay, obviously, in the meantime. So whether that's Airbnb or a hotel or some extended stay kind of place. And then, of course, now, since you're probably not cooking like you're used to, you're gonna spend a lot of money at restaurants now. It adds up. Um, so yeah, at the end of the claim, basically long story short, the insurance carrier will reimburse you all those additional living expenses you incurred in addition to, obviously, fixing up your, your kitchen or whatever else happened to your home. So yeah, you, you will spend additional money in the short term, but they will reimburse you those expenses.

Speaker 2: [24:11] Nice. Perfect. Yeah. What about the stuff in the home?

Speaker 3: [24:14] Yep. Uh, so yeah, your personal contents on your home insurance policy should be a included benefit as well. They should be one of the top three, uh, coverages. So typically it'll be your, your dwelling coverage is listed, then coverage for any separate structures, and then the third one there is your personal contents. So yeah, if your personal contents are damaged in a claim, you know, something that is covered, your insurance company will reimburse you for those, uh, total costs there, minus your deductible, of course. And, uh, yeah. Yeah, same thing. You'll get reimbursed for those.

Speaker 2: [24:43] Gotcha. S- and then in general, how does that look? You know, do people go through and do an inventory when they get coverage? How do they, you know, say like, "Oh, my piano got destroyed and it cost X amount," that sort of thing? Right. What does

Speaker 3: [24:56] that look like? That is a good… That is a very good question. So what I recommend to folks is when they're moving into a new place, or rather once they get settled in, open up all the drawers, all the cabinets in your home, put your phone on video, and just walk around your place and get a rough idea of everything that you might have. Uh, because when you're… Really if, let's say there's a fire in a large portion of the home and your contents are destroyed. The insurance adjuster, when they get there, they're just basically gonna, you know, slide you a blank piece of paper and say, "Okay, start writing down all the stuff that's gone." And you're gonna be, "Oh, no. What did I have?" You, you'll probably think of all the big items, but there's a lot of little stuff that'll add up that you'll probably just totally space on. And, um- That's really the best thing is just to have that video, save it to your cloud, whatever you have, Google Drive or something. And then anything with serial numbers, like TVs, laptops, those kinds of things, make sure you get a, a nice close-up of the serial numbers. That'll help out as well. If you have things like bikes, some clients do have, you know, several thousand dollars in bicycles, those kinds of things, uh, just make sure you know, "Hey, this was the, the year, make, and model of that bike," or that kind of a thing as well. Save yourself a headache in trying to remember all that stuff. Take a video.

Speaker 1: [25:59] Very, very smart. Okay, one thing that we promote a lot in the home buyer class is what we call house hacking. We didn't come up with that, but the w- Mm. It's called house hacking- Yeah … where, you know, maybe you have roommates, or maybe you live in a house and you add a legal ADU apartment downstairs. Or let's go even further and let's say you build a DADU, which is like a backyard cottage. How does insurance work for those? Are they all kind of wrapped up, or are they separate with the DADU, or how does that all work?

Speaker 3: [26:29] Yeah, good question. So this is, uh, gonna be one of the questions that's kind of, uh, dependent on the carrier a little bit in some circumstances. But in general, let's say someone buys a single family home, but they really kind of make it two units where they're living there and they rent out the other unit. Mm-hmm. Uh, that's gonna be allowable and covered under your home policy, just your normal, regular home policy. There are certain limitations. You can't have, um, you know, you can't have 15 people living there. So you'll need to read your home policy and, and see h- what the limit of the number of people you can have rented out. So you'll wanna check that. But you'll definitely, absolutely, 100% wanna make sure that those folks, whoever they may be, they have renter's insurance in place. So you'll wanna make sure you're including that in your lease. If you do have a, uh, a DADU, something detached in the backyard, like a separate unit-

Speaker 2: [27:13] Mm-hmm … Speaker 3: again, that's gonna be more of a carrier specific situation. Some carriers are going to require that you actually get a separate additional policy, like a landlord policy, to cover that unit, uh, especially if there's a different address. If the address is the same, like maybe it's unit A, unit B now- Mm-hmm … Speaker 3: uh, maybe they will allow your primary home policy to cover both of those. But I've just been … What I've noticed when those come up is they've been requiring a, uh, a separate landlord policy just for that little unit. And, you know, since it's a small little unit, the cost really isn't that much, so it's, it's not a hassle to get it. But you'll wanna check your, with your carrier and see what their underwriting requirements and guidelines are, 'cause some w- may accept them and some, some may not. So you'll definitely wanna check.

Speaker 1: [27:54] That explains it. Let's talk about, um, let's say someone is buying a house, or they're selling, I guess, for that matter.

Speaker 3: [28:01] Mm-hmm.

Speaker 1: [28:02] H- what do we as the buyer or seller need to do in order to make sure our insurance is actually starting and ending on the correct date? Does the escrow company handle that? Does the mortgage company handle that? Who handles that? Is it something I have to do?

Speaker 3: [28:16] That is a good question. So this, this is really gonna come back on the, on the buyer, really. So- Okay … typical example is, let's say someone's buying a home starting June 1st. Awesome. I will work with a client, because they'll typically get referred to me, and say, "Hey, I'm buying a house. We're closing June 1st. Um, here's the lender I'm working with. Here's the realtor I'm working with." Then I coordinate with the mortgage company to make sure, hey, are they actually still closing on June 1st? What's the loan number? Are there any other requirements, like do they need flood insurance for this property as well? So I make sure the, the insurance that I am recommending to the client is going to be in line with what the lending requirements are so there are zero hang-ups or roadblocks with getting the loan closed. So that's the first key part. Typically, if there is a closing date change, like the closing gets moved up because somehow the seller says, "Yeah, we can do a, a three-day early closing, no problem," or maybe there's some sort of a loan underwriting snafu and now it gets pushed out two weeks, typically the loan- Folks will contact me about that. They, however, they do not always do so. So I'd highly recommend that the buyer contact their broker and let them know, "Hey, I think our closing got pushed back. You'll want to check with the lending people and see if we need to change the effective date on the insurance." So it's, it's up to the buyer really to make sure that it all kind of happens, because the lending people, if the closing gets pushed out, they're not always going to tell me because, well, they already have home insurance in place. They don't need to push it out. Yep. Yep. That's their primary concern. So-

Speaker 1: [29:42] Makes sense … Speaker 3: uh, yeah, if you're a buyer and you, you know there's a closing date change, check with your insurance company and also check with your lending team so that everyone's talking to each other. Perfect. And then another thing that we're seeing a lot in this competitive market is where, you know, the buyer buys the home, uh- Mm-hmm let's say it closes June 1st, like you just said, but they're gonna let the seller rent it back for two months. W- how does insurance work for that time period? Is it different? What's the deal?

Speaker 3: [30:11] Yeah. So, uh, kind of similar to the, the dad who's situation, uh, what you wanna do is as soon as the closing date happens and you are now the owner of the property, and the sellers are still living there, you wanna make sure that they get a renter's policy for the time that they'll be staying there. 'Cause technically, as soon as the home is in your possession, they are now tenants in your property.

Speaker 2: [30:30] Mm.

Speaker 3: [30:31] Um, so that's, that's the first thing. Always, always, always do that. And it's gonna cost them, you know, like 14 bucks a month to, to get that policy, so it's, it's nothing. The most insurance carriers are totally fine with you doing a rent back, and you do not need to make any changes to your policy or accommodations on your policy to do so. That will vary carrier by carrier on how long they really allow you to do that. And if you go over, let's say it's 31 days, and they say, "Hey, if you're renting out the home, uh, more than 31 days, um, and something happens, we're not gonna provide coverage, or we'll provide limited coverage." So you will wanna check, A, number one, how long is the rent back, and then kind of check with your insurance carrier and say, "Hey, we're doing six weeks. Is that something that's okay? Do we need to get a different carrier or, you know, what do we need to do to, to accommodate this?" So- Yeah … it's, it's a case-by-case basis. But for most folks, if it's just a couple weeks, they probably don't need to do anything besides have the sellers get a, uh, a renter's policy.

Speaker 2: [31:24] Okay. Perfect.

Speaker 1: [31:25] And then let's just talk, like in general, what are some recent developments? Anything tech-wise or, or any new companies, startups that are trying to disrupt things that you wanna explain- Um- … and maybe go over pros and cons?

Speaker 3: [31:37] Yeah. Actually, we have done this podcast at a very fortunate time. So there's something, uh, big in general in our state brewing with all the carriers. So recently, our insurance commissioner, Mike Kreidler, has issued a emergency order effective here in June, so it's coming up. Hm. Uh, basically what he's requiring is that every carrier that does business for property and casualty in our state can no longer, on their effective date in June, I think it's June 15th, but I can't remember the exact day, they are no longer allowed to use credit factors when generating the premium for their policies. So-

Speaker 2: [32:12] Oh … Speaker 3: what this means to folks is when you get a home policy or an auto policy in our state- Insurance carriers are allowed to use credit factors to figure out how much to charge you. So in general, it's been a proven metric for carriers in different states over the years to figure out what's the likelihood they're gonna pay out on a, a claim. So if you have a super high correlation, um, you know, lots of bad credit issues, in general, the insurance carriers are saying, "Well, we're probably gonna pay out a lot more money for this person than the average person we insure, so we need to charge them more premium to make up that difference."

Speaker 1: [32:44] Hmm.

Speaker 3: [32:45] So if they're no longer able to use that credit factor as a, a metric to generate the premium on what they should charge folks for the rate, then in general, I would expect most people's rates, if they have great credit factors, their rates might go up.

Speaker 2: [33:00] Mm-hmm.

Speaker 3: [33:00] If they are someone who has had historically not so great credit factors, they might actually see a, a rate decrease. So there's probably gonna be a mix of both coming up here soon, effective for all these new business and, uh, for any policies that renew this summer. So I just want people to be aware that, hey, you might see a rate swing. It might be a little bit, it might be a few percent, maybe it'll be 10, 20%. I don't know. I have no idea of knowing what the impact's gonna be, but this is a, a massive thing that our insurance commissioner has been wanting to push through for a few years, and this was his opportunity to, um, to do it. It is being challenged in court. I don't know how that process is going. I think the initial lawsuit has, uh, gone in favor of the insurance commissioner, so we'll see if there's … if this even goes through. I don't know. But yeah, that's, that's the big thing that is happening in the state of Washington.

Speaker 1: [33:47] Interesting. If there are changes in policy amounts, is that gonna change on the renewal date of your policy, or as soon as this kicks in?

Speaker 3: [33:56] Like June

Speaker 1: [33:56] 15th or whatever it is

Speaker 3: [33:59] Yeah, to my knowledge, it will affect policies as they renew. Okay. So let's say you got a policy today, here in April, unless I'm, unless I'm incorrect, the, and I don't think I am, the, the policy will maintain that rate through its renewal. Then when it renews, now you'll have the, the product change with the credit factors. Those will all be different. Um, so you will see your rate change at that time.

Speaker 1: [34:21] All right. Well, good to know.

Speaker 2: [34:22] I have a question really quick. We were, um, talking about a lot of the things that end up going into the cost at the end of the day for your insurance.

Speaker 3: [34:31] Mm-hmm.

Speaker 2: [34:31] So we represent a lot of buyers, you know, you're under contract to buy a home, and you're looking for insurance, and they're asking all these questions. Mm-hmm. What kind of roof does it have? What's the age of the house? What kind of foundation? Some of this stuff is pretty easy to find out. Sometimes it can be kind of difficult. How do you navigate that? Is it a make or break if you don't know all the, the details that are being asked? Um, what's that look like?

Speaker 3: [34:54] In general, um, most people's experience when they go get insurance quotes is, yeah, they spend a lot of time on the phone talking about the flooring, and the siding, and the ages of this and that. And a lot of that information, quite frankly, could be found via the county assessor's website or the listing itself. Or if I have a gap in details, I'll call the listing agent myself and say, "Hey, do you happen to know, did the seller tell you about this, this, and this?" Um, so I can get a more accurate quote for my clients. That's one of the things I strive to do, is not to waste the buyer's time with inane questions about stuff that I can easily look up if I spent two seconds. So it's very rarely a situation where it's a make or break. When that's come up is then, hey, maybe the home has, you know, some kind of funky, unique arch- architectural things going on, and it's just a, not a standard home, and I need to just do some more investigating. Usually, you know, the buyer will, will know a few of those details. And again, if I, if they don't know them, um, I will just contact the listing agent that way so we're not spending a ton of time on the phone about the, the things that aren't super important that I can, can find myself.

Speaker 2: [35:54] Gotcha.

Speaker 1: [35:55] Perfect. Any last things that a lot of people ask that we didn't cover somehow?

Speaker 3: [36:00] Uh, shoot, no, that, uh, we covered a lot of stuff. You guys did a good job.

Speaker 1: [36:05] Yes. All right. Well, thank you so much for coming on today, Charles. Uh, what is the best way for people to get in contact with you?

Speaker 3: [36:14] Uh, yeah, usually the best way is just to give me a call. Uh, or if you're super busy, I know a lot of people have… They're working from home and they got back-to-back meetings, you can also text me to find a time to chat. A number for me is gonna be 425-818-9542. So that's the best way. You can text or call me there. You can also, if you just go to Google and search Charles Lindberg Insurance, uh, my little micro site should be something that pops up as well. So you see my smiling face. Mm-hmm. Uh, and again, my phone number and email will be listed there for you as well. And of course, you can also read, uh, reviews of other folks I have worked with in the last few months. So you can verify I'm a real person and that people have worked with me and like it, so.

Speaker 1: [36:53] Cool. Awesome. Well, thank you so much for coming on today, Charles. We really appreciate it. Sure. I hope everyone learned a lot and now has a, a much better foundation of how homeowners and really car and umbrella policies work, everything. And if you do have further questions, always you can reach out to Charles. He is very easy to get ahold of, and he actually responds when you ask him questions. I know from personal experience. So, um- Yeah. Yep … that's, that's it for today's show. Thanks for listening to another episode of the Awesome in Seattle podcast. See ya.

Speaker 2: [37:24] Bye.