How the Real Estate Market is changing Insurance

This is episode number 159 of The Homeowner Show. Whether you're DIY or looking to hire, we're here to bring you the best information and options for you and your home. So glad that you guys could join us for this special edition of The Homeowner Show. We went out and did a live episode from a home expo, and we actually ran into a couple of other special guests, but we wanted to zero in on this one. It was an interview that we did with our new friend Robert Irish. And please hang in there with us as the audio is not as up to par as we are used to here on The Homeowner Show, but it was live, so keep that in mind. We had to do a

little bit of editing to make sure that you guys could hear, but you know, just understand that there's going to be background noise and wind and cars beeping and all kinds of stuff going on. So there were lots of distractions, but we got lots of great information for you guys from this conversation. about insurance. So we hope you enjoy, and we'll see you next week. Now they can hear us on Facebook. Sorry. Jen Bell, do you know this guy? If you deny it, you could be in trouble. I don't know. So we got, we got Robert Irish here with Goosehead Insurance out here in Tomball, Texas at District 249. We've got the benefit going on over here.

We got the Home Expo going on over here. To the left or right of us, we got a lot of action going on. And you were telling me that there's a lot of action going on in the insurance world right now.

Yeah, specifically with FEMA. So as of October 1st, they're changing some of the rules. So for a long time, FEMA in Flood Zone X, which is the most common flood zone in Texas, they've had a very, very standardized rate model, which means that if you're in Flood Zone X, you're going to get some standardized rates every single time you get a quote from the National Flood Insurance Program, which is FEMA.

Now, real quick, just so I know, like when you say Flood Zone X, is Flood Zone X actually an area, or are you saying flood zone as in flood zone, you know, as a variable?

So Flood Zone X is the determination that FEMA uses for properties that are low flood risk. It's called the 500-year floodplain.

Okay.

Which means they expect that property to flood once—

Every 500 years.

Or more, yeah.

Okay. So is that any property then that falls below that then is included in that?

Like, it's—

so it's— so if like you're in the 100-year floodplain, are you also in Floodplain X?

No, then you're in a higher-risk flood zone.

There's a whole bunch of flood zones for that. Gotcha.

Okay, once you get to the 100-year, that's when you start talking about stuff that's going to be mandated by— if you're trying to get a loan, um, they're going to have— you're going to have to have a flood policy.

Okay.

Um, but so in that Flood Zone X, which is the lower-risk one and the non-required one, the The price has always been very, very standardized. Now it's variable. So where it's been for the last year, it's been $572 to get a standard policy for the year.

Okay.

That's $250,000 on the dwelling, $100,000 on personal property, $1,250 deductibles. Now I've seen those policies at $900, $1,000, $700. I haven't seen one yet that was— now this rule change came for October 1st, seeing the rates for the last month. So there's not a whole lot of data and they didn't give us anything. We just literally have to quote the properties because every single property is different now. But people have traditionally relied on them. Now they need to start looking at private markets.

Okay.

Because the thing is, in those same areas where we're getting $572 last year, now we're getting, let's say it's an $800, we may have private flood options that are at $500, $600, $700. I have some private options that end up being cheaper than where FEMA was last time. And they're all supposed to be pulling their own proprietary data on, you know, what makes this home a risk, how likely is it to flood. And there's some variability there, but that's not really the client's concern. That's the insurance company. They're the ones that set their own risk tolerance.

So what are they looking for when they're— like, what are some specific variables that change that?

risk tolerance on those?

Yeah.

They don't give us access to those equations.

Really?

That's proprietary, man. That's the—

So it's different for every company?

Yeah.

Really? Okay.

And there's, there's about a dozen well-known private— well, I shouldn't say well-known, well-known to me, but private flood insurance companies. They all will get a different rate from every single one of them.

When you, when you guys bid them out?

Yeah.

Okay, I got you. So, and who, who are you guys pulling from?

So the most common are Neptune Flood, Okay. I love Neptune. I've got them on my, my house, my personal house. They are a little bit more expensive. We write a lot more with a company called National General. They have been the ones that are even coming back lower than FEMA, like the $572,000. We've had quotes coming in below those. And I actually haven't written a FEMA policy since we've gone on the variable because they're just so much more expensive. And then when you're talking about a FEMA policy, you also have to deal with— and this gets a little technical— but they don't cover your personal property in the same way. You can buy an endorsement that gets you better coverage through a private company. It's very cheap, right? But it makes a big difference on your

payouts if you actually have a claim.

So interesting.

Maybe I'm getting too technical.

No, no, no, not at all. No. And so because I've heard about this where like the policy, sometimes it'll just be the dwelling but not the contents.

Well, that means that they've excluded And that means that either they should have disclosed that to you or the insurance agent's an idiot.

Right. Yeah. So I, I, I, well, no, there was, there was an instance recently. I was a, it was a customer of mine. He was talking about how he inherited a property.

Yep.

And he went back after living in the dwelling for like 2 years and found out that none of the contents were covered in the homeowner's policy. And so he had to go back and actually get renter's insurance for himself. himself in order to get the contents covered because he didn't want to change his policy. I don't know what the—

That's horrifying.

Isn't it?

Yeah.

Yeah. And I was like, why? But like, I'm not an insurance guy, so I can't like, I can't like advise this guy. I'm just a podcast host.

So what I would say is on your standard homeowner's Form 3, which is what everyone should have— not everyone does have, there's different calibers to those policies— that's the good one. You should always have contents on there. In fact, most companies have minimum requirements that you're going to have this much personal property coverage.

Yeah.

The only type of policy I can think of where they would be able to exclude that is either they ended up with Texas Fair Plan, which is a really, really cut-down policy you don't want.

Okay.

Or they got a dwelling policy, which really shouldn't be used for somebody's primary residence, and then had an exclusion on there for personal property. But the fix to that should not be buying a renter's policy because he's not a renter. In fact, I think the insurance company would have a strong, strong case to deny that claim. Well, it's material misrepresentation.

Well, let me ask you this then. I mean, would it, would it make a difference if the dwelling was owned by a parent who was still alive but incapacitated to be able to live? In that, in like, so it's like an elderly person who had now had to be moved into like an assisted living, but you're living there.

Yeah, so if, so if the, if the home is still owned by the parent— my God, I would love to have the real specifics.

I don't, I'm guessing, but like—

I know, based on what you're telling me, if I, if I had to make an educated guess on this, the parent still owns the property. That means that if somebody else is living there that is a non-owner, you do You do need a rental dwelling policy, RDP, right? The dwelling policy I mentioned, it does not come with personal property by default.

Okay.

And even if it does, that personal property is not for the renter. So the renter— that actually makes perfect sense.

Okay.

When you told me the story the first time, I was thinking that he owned the home, and then that wouldn't have made any sense. But if he was just occupying it, even if there's no lease agreement, yeah, then the proper way would be for him to have the rental dwelling policy And then he would have needed a renter's policy. So that scenario works.

Well, that's because I'm an idiot. I don't know what I'm talking about. As you were talking, I was like, you know what, this probably requires more information.

Let's not say you're not an insurance agent.

Let's leave that. Well, I couldn't work for you.

Give me some time to train you.

Well, okay, I'll work on that. So, okay, sorry, getting back to the FEMA stuff. And like you were also saying, like, so I assume you— because you're saying there's better private options now. So FEMA is considered a public option.

So FEMA has to offer flood insurance on every single property except in some very specific cases that I'm not going to go into because we don't have time.

And they probably don't apply to anywhere that we live near, I would imagine.

Well, mostly no.

Mostly, okay.

They're for non-incorporated communities, but that's a, that's a whole, that's a rabbit hole.

So, so like The Woodlands?

That's not exactly what I meant.

Come on, we got it. We can talk local politics. It's fine. It's fine. We live near a humongous— like the number one unincorporated community in the country.

I, I wouldn't be surprised if it was. I don't have exact data on that, but it's ridiculous.

It's, it's up there. Yeah. I mean, well, there's a reason people are all moving to Texas.

Yeah.

So sorry. Sorry. I didn't mean to off-track you.

No, no, no. Um, and so So getting back to, I guess, the core point is that every home— most homes around here, 99%, let's say, are going to have a FEMA option.

Right.

And the private options aren't always better. In fact, in terms of raw price, normally FEMA's had the cheaper option. But since this rule change, and all policies are on this rule change, like you go and get a flood policy now, unless you're in a home closing and you have your closing date before October 1st, you're going to be on this variable rate table. With that variable rate table, like I said, we haven't written a FEMA policy since.

Oh wow.

They've been private flood because the private options have been providing better coverage for, um, lower cost. And I mean, that's really all it comes down to for me. And then, I mean, this is kind of an intangible, and maybe it's not overly fair to FEMA, but this is what I experienced when I was in insurance Right. And I had a client who was 6 months before they had an adjuster at their house. Now, to be fair to FEMA, FEMA handles everything.

Right.

They're doing wildfires in California, they're doing hurricanes in New York, they're doing, you know, if it's a major event, there's going to be— so they have one pool, and when something like Harvey happens, which is really unprecedented, their resources are stretched. But 6 months is ridiculous. Ridiculous. But the other side to that is I have zero control over FEMA.

Right.

They're not an insurance company. They're a government entity masquerading as an insurance company. So you can't twist their arm. There is no twisting their arm.

Yeah.

With the private flood companies, they are extremely specialized. They have their own adjusters. They're in-house. They only deal with those claims. They only deal with that one policy. So they know how everything goes. So the claim closeout time is much, much quicker than the FEMA turnaround. From the data we've got, I try not to, you know, cast too wide of a net on it.

Sure, yeah.

But I've been very, very happy with the claims that I have had with the private flood. And like I said, you can get endorsements on private flood that you can't get with FEMA. So a lot of times you're literally getting a better policy with a shorter lockout time.

And what's a lockout time?

If you want a flood policy right now from FEMA, you pay for it, take your payment information, put it in the system, 30 days before you have coverage. Most of the private flood companies have 7 to 10 days. And that's the main idea is that if there's a storm in the Gulf, they don't want to be selling flood policies. But 30 days is a long time. 30 days is a long, long time.

A lot can happen in 30 days.

Exactly. So that's another thing that I like about The private flood options is that they get their policy, they get their coverage in force quicker, which especially in storm season, which we're in now.

Yeah, um, I mean, we just had one.

Yeah, luckily it was—

What was this one? It was Nicholas. Nicholas, okay.

Shut me down for a week.

Did it really?

Yeah.

Oh, you couldn't, you couldn't write any policies for a week?

Yeah.

I got you.

When a storm hits the Gulf, all the insurance companies along the coast will lock down. That's where my, my entire book of business is.

Wow.

Yeah, if you're writing policies up in Dallas, it's not a big deal because they don't care. But, and there were a few companies that locked down for the entire state of Texas for that little tropical storm.

And that seems weird to me because like any of it seems unpredictable. Because if I'm an insurance guy up in Dallas, I mean, like it seems like they would never let me write a policy for like tornado damage, you know, like because they happen all the time. Like, how can you, how can you, like if you got the policy the day before, are they going to pay out if tornado happens the next day?

They are.

So I mean, like, it— but it's so unpredictable, but it happens so often. I mean, like, have you ever been up there during a storm or anything like that?

So I— well, I actually had a client who had a tornado too in Onalaska that had their homes destroyed.

Okay.

Um, so yeah, well, and I wasn't there, right? I've dealt with that before. It's— and I guess I can use my mother as an example. So I wrote her with Travelers a few years back, and a week A week later there was a hailstorm. Travelers had to cover it. They were the insurance company at time of loss.

Yeah.

But, you know, these insurance companies are all about data, and they, they have done like, oh well, whenever a storm's coming in, we see a 90% increase in the number of policies we sell in the target area, and then our payouts. So we're just going to lock down. We're not— we don't want to bring on a policy and accept, you know, $100 in premium for a month and then I don't know why I'm saying $100 a month. You normally have to pay in full for the year, but whatever.

Right.

They don't want to accept that few thousand dollars in premium and have to pay out $10,000 for a roof or $20,000 for a roof.

Yeah.

So that's why it's called a stop-write or a moratorium.

Okay.

Actual technical terms for it. But yeah, so basically for a week I just sit on my hands.

And I think it's important for people to know about that because I think, I think people can walk into an office like yours expecting to get a policy and you just have to tell them we're not writing anything right now. And they can be really agitated about that if they don't know They don't know that this is how the business works. You know, like, well, sorry, you're late. You're late. I mean, should it—

Trust me, I want to sell it.

Oh yeah. So you were talking about a client you had that it took 6 months for an adjuster to get out there, and you were talking about it during Harvey. From what I understand, Harvey really changed the adjuster business because now these guys, a lot of these guys are so mobile. I mean, they have all bought RVs, and they'll kind of storm chase. You know, East Coast, West Coast, they don't care. I mean, they just load up the RV and go to where the—

Well, they're called cat adjusters. That's like the life for a catastrophic adjuster.

Right.

If you're looking for a good job and you don't mind travel, you can make good money as a catastrophic adjuster.

I have buddies that do it. I mean, like, and they load up their families and go. That's a cool idea. Yeah, it's great. I mean, well, one, they get to see the country. And two, I mean, like, you know, like you said, they make really good money when, you know, when they get to—

If they want to work.

If they want to work, yeah.

files you burn through.

Yes.

When there's a disaster, there's no shortage of files.

Yeah, yeah, you just got to run them down.

Harvey was— Harvey changed a lot of things about the insurance industry, perceptions, all kind of things. Which is funny because people focus on Harvey. We had the Tax Day floods, I think that was the year before, and the Memorial— it's one of the two. Either we had the Memorial Day floods the year before or the Tax Day floods the year after, but we had 3 We've had a couple of smaller floods since then, so it's— it made flooding— what, are we losing you?

I don't know. Keep going, man. I'm listening to you.

Yeah. Well, it changed a lot about how we handle flood insurance because, you know, even insurance agents before Harvey, oh, you're in flood zone X, it's not a big deal. Now that's not the case. Like, you know, you need to at least consider it. If you're in flood zone X, You own a property. And the other thing is the claims data on it. So the average, you know, windstorm claim, something around $20,000, windstorm and hail, replace a roof, fence, siding, something like that. The average flood claim, $80,000. But you think about it, if you're going, you know, you even get 3 inches of water in that house, it's going to creep up, you're cutting it 4 feet and having to Replace everything below it.

It's written for the entire house. So it's a lot more demo, it's a lot more clearouts, a lot more work than just swapping the roof out.

Yeah.

So, and when you think about that for a policy that's, let's just call it $600, $700 a year, especially with the crazy weather we've had, it's not a bad investment.

Well, and I know I, I had— so there's 3 buildings on my property, and when they, they came out and checked out that we had— mine happened because a tree fell through the house. And so they had to replace the roof. I mean, I was like, what do you do? And so when they came out, they looked at all 3 buildings and they're like, well, all 3 of them are pretty aged. This one has, you know, hail damage. This one— let's go ahead and do all 3. Who am I to say no?

That's awesome.

Well, and like, and plus they're like, well, if we go ahead and replace all 3 of them, there's less likelihood that we're going to have damage and need to replace these later. Let's just go ahead and do it now. So as they're, you know, peeling off my shingles. What they didn't know is there was— there'd been leaks, and so a lot of the decking was rotten.

Oh man.

And so then they had to bring the adjusters back out, and— or the roofing company was like, hey, like, we can't put this roof on this deck. Like, we have to replace this deck. Are you guys going to pay for this deck? And so, like, the insurance company at that point, they're in the middle of this deal, and so they have to go, well, yeah, let's go ahead and do the deck, you know. And so, you know, what What should have been a normal roof replacement turned into a much more expensive project that thankfully we had a good insurance company and they did what they were supposed to do.

You also had the right kind of policy.

Right.

That makes a big difference as well. If you don't have the right endorsements, you have an actual cash value clause on your roof, oh man. Timothy can tell you about that all day.

Well, we're going to talk about it probably hopefully here in a minute. But yeah, it's— I mean, all that stuff I think it can be so confusing to people. Several months ago, one of the things we were talking about on the show that I'm interested to hear your thoughts on is home values.

Yeah.

Right? I'm not a smart guy, but I know when numbers get bigger and numbers get smaller. My concern was, say, Like, for instance, this tropical storm that just came through. And, you know, 10 years ago, I bought my house for $120,000. Well, right now, that house is probably worth, you know, $240,000, $250,000. You know, but— woo! Hello, wind. Let me just put that on. So, $250,000 home. You know, hopefully, my— I've got a good insurance agent. He's been paying attention to my policy. But, you know, at this point my policy covers $160,000, $180,000, but my home is valued because of this ridiculous real estate market at $250,000. What happens? You know, like, well, and let's just talk about your company specifically. I mean, like, because I assume

every company's kind of—

No, because the overarching rule that you're talking about is pretty much uniform, but it's very, very misunderstood. So the insurance companies do not insure Insure the value of your home, right? The value of your home has zero to do with your insurance policy. Your, your insurance policy should be set up for accurate reconstruction costs.

Okay.

So there's a replacement cost estimator inside each one of the insurance companies, and just to make it freshly maddening, like, you'll get a different answer from every single one of them, right?

Yeah.

We'll run it with 10 different companies, we'll get 10 different— and I mean, they'll be in a range, they'll be within, let's say, 15% of each other in general. And then you'll end up with some outliers, like— and I, and I don't represent USAA, but it's crazy. Like, I'll see policies come over from USAA and it's like, it's like $250 a square foot. Yeah, if you got a, if you got a custom home, then $250 a square foot. You got a normal home, even under construction prices now, you're $150 a square foot.

Right.

Yeah, inflated materials. And, and that's a, that's a Rough guide. It's different for every location. That's why the insurance agent needs to be running the reconstruction cost estimator. But if your policy's at $160 and your square footage is, you know, what is your square footage, if you don't mind me asking?

Uh, in my— in the main house, it's like 1,500 square feet.

You're light. I mean, I would—

Oh yeah, that's intentional.

I want you $175, $180.

Okay.

So like, you bare minimum, you need to be between $110 and $120 a square foot.

Okay.

You're just, you're not going to be able to rebuild your house if you don't have that. You also have to be really careful because insurance companies will have endorsements inside of those contracts where if you do not insure at replacement cost, 100% replacement cost, they don't have to pay you a thing.

Right.

And that's variable by company. Some of them have different cuts off, but you have to be careful with things like that because that's how you can end up in a situation where you're filing a claim and you're not getting the money out of the claim you think you need to because the policy wasn't designed correctly.

Okay.

Um, so, and the purchase price— I can give you another example. I've got a client who has a house down by Rice University. It's like a, you know, 3,000, 3,200 square foot house, something like that. I've got it insured for like $650, so about $200, because it's a nice house, right? It's worth $1.4 million.

Okay.

Because it's right next to the university.

Yeah.

We don't insure it for that. We don't insure the mortgage. The insurance company wouldn't pay that. Right. And actually, so the way that the compensation works on a claim, if there's a fire, according to Texas law, at least the last time I checked it, but a lot of things have been changing.

That's a fun noise, isn't it?

This is the insurance companies not wanting you to hear this. But if there's a fire, they're going to cash out the policy.

Okay.

So you literally get the face value of the policy. But for any other type of loss, like if that tree had truly like totaled your house, right?

Um, he's just ready.

Um, so that— and we get into that a lot, especially when people are buying new homes. A lot of my business comes from new home purchases, right? And it's something I have to constantly explain even to the lenders. They're like, oh, well, our loan's $350,000. Why are you insuring it for $275,000? Because it's a 2,000-square-foot house and the market's crazy right now. And then we just send them a replacement cost estimator and they'll accept that. But that's a pretty common question. And one of the reasons—

And I think a lot of people were asking it right now because exactly the reason you're talking about, that price of materials That was so crazy. And like, it was— and I imagine it was— I mean, like, are you guys— are you guys— you guys aren't just in Texas, right?

So Goosehead's all 50 states. Okay, my license is in Texas. I'm only Texas. Yeah, my information's good.

So, but like, with a, with a multi-state company, it becomes even more complicated because we were talking to— we have some, some friends up in like the Portland area that do a similar show. And at one point it was here, you know, OSB was like $50 a sheet. Well, there it was $75 a sheet. And it's like, how, how would you even like put those numbers into the system so like your counterpart up in Oregon could write similar policies like what they're writing down? Because it's so convoluted.

Oh, that part gets handled for us.

Well, I imagine.

But those replacement cost estimators, they're localized to the market.

Okay.

If there's one thing insurance companies have, it is claims data. They have Millions of data points on every conceivable type of claim, right? So, and that's what gets— it's the, the system is called Xactimate, is what most of them use. It's the same system that contractors use when they're bidding out jobs or literally going in to bid reconstruction on claims. So all that data gets kept and housed and fed into that local area, and that's—

oh, I got it, man. The wind is picking up out here, y'all.

So, so it will be localized to that market. And the other way that that should be dealt with is that you can always add an endorsement onto a policy, and it should be standard on all policies. That's— that really is up to the insurance agent and the client, but it gives you either an additional 25% or 50% Okay. to the reconstruction cost, and that only activates if— but let's say that there is— and it won't happen in fire. Let's say there's a tornado and you have the house insured for $160,000. And exactly right now, materials are way up, right? You have that endorsement. Let's say it's 25%. I'm not going to try and do the exact math. Let's just say you run through your whole $160,000. You've got

at least another $30,000 to keep going. So you basically go back to the insurance company and say, hey, you know, this is how far we've gotten off $160,000. Materials and labor are really expensive. They'll look at at it. They'll make sure you're not just inflating all the material costs, right? And then they'll start releasing funds from that additional piggy bank. And what's cool about that endorsement is if you were to say just take your home from $175,000 to $200,000, now that your premium— well, your premium is going to go up with the endorsement anyways, but your endorsements— I'm sorry, your deductibles go up because deductibles are percentage-based, right? So now instead of having— if you've got a 1% deductible, instead of having a $1,600 deductible,

now you've got a $2,000 deductible. But this is another situation where you have to make sure the replacement cost estimator is done correctly, because if you don't, they're going to come back and say, well, we're not going to give you this 25% because you're only at 90% value or 80% value or whatever. Again, very specific on the insurance company and the policy.

Yeah.

But getting the replacement cost estimator right is really important.

Does that— I mean, because like the way I'm hearing it is, you know, as the market continues to go up, which they're saying it's going to continue to go up for a while now.

They always say that. Yeah.

Up through 2007, 2008. Yeah. See, I think you see where I'm going because I think a lot of people are going, well, I don't want to pay more for my insurance. I don't want to have to pay more for my deductible. So what happens then when the market crashes?

Which, again, the market— so I hope you're talking about materials specifically.

I am, but like, you know, part of that is— part of that goes into the cost of the house, like what the house sells for, right? Because I mean, that's how most people are going to judge what their house is worth, like what they could sell it for, you know. And but a lot of that is based off material cost, what the market's doing, all that kind of stuff, you know. And part of the reason prices went up so much right now is because of material cost. And now they're starting to come back down, but I'm not seeing home prices come down yet. But like you said, in 2008, no one saw that coming. Well, a few guys did, and they got really rich, but it tends

to go that way.

Somebody's always going to make money.

Yeah, so I'm wondering if material costs and replacement costs come down, do the premiums and the deductible come down? So I'm gonna grab a hold. I was a little freaked out.

I got it.

So as material— this is an awkward way to ask a question. I hope I'm not sweaty in my armpit. No, as material costs come down and home values come down, do then deductibles and premiums come down?

Not automatically.

Not automatically.

And most insurance policies actually have riders in them where they're They're going to increase the dwelling coverage slightly every single year.

Okay.

Because in general, the cost of labor and materials goes up.

Right.

And the insurance companies are trying to account for that. They really don't want to be in a position where, you know, you don't have enough insurance on your home.

Right.

Because it really— and, you know, people, everybody, nobody has any sympathy for insurance companies.

No sympathy for insurance companies.

But it's not good for an insurance company for someone to get a denial letter or Yeah. Because that's just going to make them angry. That's going to make lawyers come out, things like that. And it's going to cause them bad press. But at the same time, if you didn't pay for the coverage, if you didn't have it in your policy, you're not entitled to it.

Right.

And so there's a good— there's a balance there. And I think one of the things that's fueling that problem is this whole 15 minutes can save you 15%.

Not to name any names.

everybody has had the price beaten into their mind. I don't want to act like price isn't important. It is.

Absolutely.

I always require people send me their declarations pages before I do their comparisons for them. Yeah. And when I actually go through and explain to them, well, you know you're missing this, have you ever had this explained to you, do you know these endorsements are an option, you know you have a, you know, a named peril policy instead of an all peril policy, they have no idea because most insurance agents are Well, what do you pay?

Right.

You pay $2,000 a year? Guess what? My policy is $1,700. What does that mean? Like, to the consumer, they're like, oh, well, I'm paying $2,000 for an insurance policy. I can get one for $1,700.

Yep.

Cool. I saved myself $300. Now, you lost a huge amount in that transaction.

Yep.

And I'll actually tell you the thing that scares me the most. I talk to people way too often, way too often, who are like, oh, I've got full coverage. coverage on my autos.

Okay, cool.

Yeah, send me your declarations page. And I take a look at it, they don't have uninsured motorist, or they don't have uninsured motorist property damage, or they don't have comprehensive on a vehicle. They're missing— and I guess I should say full coverage is a made-up word. It's a salesman's word.

Okay.

There's no full coverage definition in the insurance code.

Okay.

They itemize all the coverages.

Here's what liability is, here's what So it's a blanket statement that they've used in order to comfort the client.

Create a fuzzy feeling.

Okay, I'm with you.

Yeah.

And, um, and it's now raining on us.

It is.

Thank God for this tent. Insurance companies are angry. That's right. They're sending the rain.

But it's, you know, not having uninsured motorist coverage is That's one of the most dangerous things that you can do because you may be the best driver on the face of the planet, but you can be stopped at a red light, have somebody slam into the back of you, not get anything for your vehicle, and not get anything for your lost medical bills and pain suffering, any of that stuff. All of that is contained in your uninsured motorist limits.

Mm-hmm.

And the really scary thing, and I really wish I— well, I'm not going to go Like trying to get people's insurance license taken, but I've actually had clients tell me, well, they told me I didn't need that. Why wouldn't you need that? Like, oh, well, it'd be covered under my collision deductible. Do you think that uninsured motorist coverage exists for no reason?

Yeah.

It's up to the insurance company if they want you to— if you get rear-ended, the insurance company is not just going to say, oh, well, you have collision, the other person hits you, we'll cover it.

Yeah.

And you may be able to fight. And the other thing that I'll tell you is if it goes that way, you end up with an at-fault accident. Collision coverage, at-fault accident. And in, in the absolute best-case scenarios, you may be able to fight tooth and nail every time you want to change your insurance for 5 years. Say, oh no, no, I really wasn't at fault. I got rear-ended, but this is the only way we could do it. You're signing yourself up for a world of headache for one of the cheapest line items on an insurance policy. The uninsured motorist coverage is literally one of the cheapest line items on an auto insurance policy.

So how much, how much extra on average do you think that costs people?

I can't—

Because it's based off vehicles and driver and, you know, okay, there's a lot of variables.

Yeah, there's gonna be somebody listening to this who's got 2 kids and I'm gonna say it's $100 a year and they're paying, you know, $500 a year. Yeah, it's very, very variable down to the vehicles you've got, the location where you live, how many drivers. like all those kind of things. But it always breaks out the individualized coverage for us. And I guess, you know, towing and roadside assistance, rental reimbursement, those are really the cheapest.

Does geography actually play a part in that? I mean, like rural versus city?

And well, I don't want to say rural versus city. City is typically higher. Okay. But location, absolutely. I've had people who have moved one zip code over and paid a lot more for insurance because that zip code had higher rates. And then people who move from Harris County to Montgomery County, generally the auto insurance drops pretty significantly.

Okay.

So, but that's just— I see that market a lot. But yeah, your location matters a huge amount. Hmm.

Is— and this is going to be kind of an off-the-wall question, but a lot— some of my clients have rather extensive car collections, and most of them are not registered in the state of Texas. Is there— is there— so you can probably imagine what kind of cars I'm talking about. Is there an insurance benefit to them being registered in states like Montana, Nevada?

I can't comment on other states because I don't know how—

You don't know how it works?

Yeah. But I will tell you that depending on the insurance company, and when it comes to collections, it depends on how extensive the collection is.

Yeah.

But Hagerty isn't Haggerty is a great company for that. We work with them. They, you know, they'll put you on the phone with an underwriter. You can explain the situation.

And Haggerty is like an insurance company that'll pretty much insure anything. Like, you could— well, no, you could call them like your favorite spoon or something, right?

I mean, you're thinking of Lloyd's of London.

Is that what I'm thinking of? Okay, okay.

So Haggerty is a very, very specific collector's company is what I would call it.

Okay.

Because they, they do focus on antiques and classics. Antiques and classics. But if you have something special, like a limited edition— because I've got a client who's got a limited edition Mustang, okay? Um, and I don't remember all the things about it, but it's, it's a, it's like one of 100, okay? They insure it. It's a brand new Mustang, although it's like 2020, right? But they insure it even though it's not a classic. But it is— that's why I call it collectors, okay?

Yeah, yeah.

It's a collector's item. And they— I want to say they They can be flexible when they want to be flexible for things like that, so they may not care. What I will tell you is that I personally would not have my vehicle registered in another state for a long period of time. I would want that registered here and insured here because—

Well, and that was my next question, is if it's registered in another state, can it be insured here by, by a Texas insurance company?

If that insurance company accepts that.

Okay.

And then you have to get back to the problem of you can't always trust a yes man.

Uh-huh.

You can't always trust someone whose only motivation is to sell you a policy.

I can't reach you right now. You're good, you're good. If it goes, I'm gonna jump up and grab it and you can just talk to the people.

What I would say is if they're doing their due diligence, they call the underwriters, they get the underwriters' approval, then it's not an issue, right? If they just throw some paper at it, then yeah, your client's got a problem. Because even if they disclose it to the insurance agent, if the insurance agent didn't disclose it to the actual insurance company, then they've got a problem. Because if they have a claim, there might be an issue. But again, if the insurance company doesn't have an issue with that, then they don't have an issue. They just need to be making sure that it's done the right way.

So, and again, all this kind of goes back to make sure that you have a good agent. Or agency looking out for you.

And I would recommend, even if you're with one of the— the other big thing is the difference between captive agents and non-captive agents. So you said we're all non-captive, which means that we got about 50 different companies we represent, so we shop with all of them. If someone has been with the same company for decades, I can almost guarantee you they're overpaying, and they may not be getting the coverage they want because those policies are too old. Man, it's really—

it's starting to come down. Yeah, we, we may be calling it a day, folks. Yeah, so, well, real quick, so while people can still hear you, where can people find you if they want to get a hold of you?

Nextdoor.

Nextdoor.

I don't really do very much social media. Okay. Um, so Robert Irish, if you search me, I believe I come up on Nextdoor.

Okay.

And I love that. I've had— I have like 110 recommendations on there. That's where all my I'm just not big on Facebook or anything else.

But people can— so we got goosehead.com. Yeah, they can email you robert.irish@goosehead.com. And then we've got— yeah, well, so what we'll do is we'll link up all this stuff on the show notes and make sure people can find you. So, but not Jen, just call Robert. Call Jen. Okay, that's fine. No, Jen's a good friend. And she's watching.

That's awesome.

No, Jen's fantastic.

We call her too Jen Bell, B-E-L-L.

That's right. Jen's awesome. So she kind of likes me too. I took care of some stuff at her house for her. We're not going to say what.

I'm sure she appreciates that.

It's podcast friend confidentiality. That's what it is.

I didn't know that existed.

Yeah, it's in the oath. Anything else you want everybody to know?

No, um, stay frosty.

Yeah, we'll do it, man. Thank you so much.