Want to know the $4,434 (at least) mistake you’re probably making when you insure your properties, including your own personal residence? This is the MOST LIKELY THING to damage your real estate investments, and it’s probably not covered by your homeowners insurance. I’ll tell you what it is today. I’m Carole Ellis. This is episode 42.
Can you believe that the MOST LIKELY THING to damage your property is not covered by most homeowners’ insurance policies? Yeah, I guess I can too. But you still need to know how to close up this loophole or you’re very, very likely to be paying through the nose to deal with the damage. Before I reveal the details on this top demolisher of property, though, I want to take a minute to mention something else pretty wild: millennial homebuyers’ expectations about the purchasing process. A recent report from Credit.com and Bank of America, who are constantly trying to recruit more millennials into homebuying, as you might imagine, revealed that the younger generation (that’s 18 to 34 years old, by the way) has some pretty surprising ideas about how they will make their first home purchase. Check out all the details (you need’em if you’re going to sell to these guys) in the news and networking section at www.rei.today.
Now, back to preventing major destruction of your properties…
According to Travelers Insurance, a certain weather-related problem is present in fully one in every four claims – and most policies don’t cover it! That problem is wind damage, specifically caused in most cases when tree branches or unsecured outdoor items hit the home, lift up roof shingles, or damage windows and doors, said second VP of risk control at Travelers Scott Humphrey. Wind damage actually beats water damage (plumbing and appliance issues), hail, and THEFT, and if you live in a flood plain, a coastal area, a hurricane prone area, or a tornado-prone area, you’re probably not covered. While most insurance companies describe that list of exceptions in this way: “Your policy probably covers it,” in reality, the list of excluded areas is expanding by the day, and it changes every time we have a major weather-related disaster. So you cannot be certain at all that you are covered unless you’ve read every detail of the fine print in your policy.
So how much is that uncovered wind damage likely to cost you? According to data provided by HomeAdvisor, the least amount of money homeowners are likely to spend on wind damage is $800, and it frequently gets as high as nearly $12,000! The average amount that a homeowner with wind damage spent on repairing their home last year was $4,434 and remember, odds are good that it wasn’t covered by their insurance. In fact, even if wind damage IS covered in your policy, failure to appropriately prepare for it could get your claim denied! Make sure that you are prepared (and your tenants, if you have rental properties, are prepared as well) for wind damage by doing the following:
Now, if you fail to do all these things and you sustain wind damage, does that mean your insurance won’t cover it? I couldn’t say for sure (a lot of policies do) but you need to check your own policy and, perhaps even more importantly, the policy on any rentals and rehabs that you own in order to be certain. Particularly when it comes to rehab properties that may be partially open to the elements or have more loose items than most out where the wind could snag them, you must be very sure that your care of the property meets your insurance company’s needs.
If you’re feeling a little insecure about your homeowner’s policy now, don’t sweat it! I’ve got the whole list from Travelers in the REI Today Vault so you’ll know exactly what is most likely to tear up your investment properties and your own home and you can review your policy to make sure that your coverage is what you expect and need. Just go to www.rei.today/vault right now to check it out! Not yet a member? No worries! Text REITODAY no spaces, no periods, to 33444 and I’ll provide you with fast, immediate access to all sorts of great trainings, news coverage, interviews, and lot more timely information that will help make your investing safer, faster, and more profitable.
And remember, when you do that, you’ll also be able to GROW YOUR NETWORK by interacting with me and your fellow listeners to REI Today… so stop by to ask questions, make comments and network with other investors across the country. Text REITODAY no spaces no periods to 33444 or head over to www.rei.today/vault right now.
REI Nation, thanks for listening in and always remember this:
Your best investment is your own education.
Carole Ellis is the host of Real Estate Investing Today, a popular 9-minute daily podcast focused on educating real estate investors about the important topics that will make their investing SAFER, FASTER, and MORE PROFITABLE. She's also the editor of the Bryan Ellis Investing Letter. She has more than a decade's worth of experience in and reporting on the real estate industry and, additionally, has written dozens of courses on the topic. Carole lives in Kennesaw with her husband, Bryan, and four children. She believes wholeheartedly that your best investment is always your OWN education.