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Property Management Mastermind Show

#139: Landlord Insurance with Steadily

Apr 19, 2022 by Brad Larsen

Why is it so challenging for property owners to find the right insurance for their rentals? The Truth is that it doesn’t have to be, thanks to innovative companies like Steadily.  Adam Swearingen and Datha Santomieri of Steadily join Brad to talk about the current challenges and the solutions for the property management industry.  Adam and Datha work to find the right insurance coverage for property owners and managers, as well as streamlining the entire process for their clients.

Website: www.steadily.com/partners/pmm

BRAD: Everybody. On today's podcast, we're talking with the folks from steadily to learn all about landlord insurance. Listen in.

ANNCR: Welcome to the property management mastermind show with your host, Brad Larson. Brad owns one of the fastest growing property management companies in San Antonio, Texas. This podcast is for property managers. By property managers, you'll hear from industry leading professionals on best practices, new ideas, success stories and lessons learned. This is your opportunity to learn about the latest industry buzz surrounding property management as well as tips and strategies to improve your business. Need a repair at 2:00 am. Easy does it easy repair coordinates, maintenance and nothing else and takes after our maintenance calls for property managers working with your property management software so you can see exactly what easy is doing without leaving your own software. From Las Vegas, Nevada, our full time maintenance coordinators will dispatch your work orders directly with your vendors. Give us a call at 800 4886032 or visit our website Easy Repair Hotline LLC. Remember that commercial? Where's the beef in property management? You could say, where's the profit? You want your business to grow, but it feels like you're just spinning your wheels. We get it because we've been there. If you are ready to do something different in 2022, then head over to the property management coach to find out more about coaching programs and what they can do for you. Mention that you heard this ad on the Property Management Mastermind podcast and get $250 off any coaching program. Again, the website is the property management coach.

BRAD: Welcome everybody to another edition of the Property Management Mastermind Podcast. I'm your host, Brad Larson, and today's two guests are coming at you from steadily. And this is an interesting company I want to talk to you about, gang, because bringing these two guests on is going to give us an opportunity to really understand who they are, what they do. And it's filling a significant need in our property management industry. And so I have Adam and data from steadily now Adam in a former life was with RealPage so he's very familiar with a lot of the software's, a lot of the property management world and he's been around the circuit for a while. And so when when he retired out of RealPage and took another career with steadily, it was good to see him at the booth there at the broker. And we started a conversation and really started to get intrigued about steadily and had a good conversation a couple of times over so far. And I thought, you know what, guys, this would be an awesome podcast because people are going to want to know who you are, what you do. And so let's consider this almost like a secret shopper where I'm interviewing you guys to find out who you are, what you do, and then data, you're going to have to explain who you are. And this one, because, you know, you could be the big lady or you could be, you know, the middle person. But you got to give us a quick intro. So I'm going to let Adam go first alphabetically. So, Adam, give us a few minutes your time. Tell us who you are.

ADAM: Yeah, thanks, Brad, and thanks for having me on. And great to great to see you and everybody else with the industry again. Right. So as you said, I was with RealPage for for many years I love the industry took a took an opportunity to go into a different role and I'm back right I just missed the property management industry that much in my role with steadily is a head of partnerships and growth. And so the opportunity I was drawn to it steadily was it seemed like something that was missing from the industry. Right. And, you know, high level who we are and we'll talk a lot more about this today is we're a tech first company providing landlord insurance. So insurance for investors of rental properties. And so I'm excited to talk a little bit more about that. But I was really drawn to the team and the company because of the team, the bunch of rock stars. You'll get to meet data here today, but just everybody that I met with is just this seems like something that is going to be big, so I want to be a part of it and here I am.

BRAD: So to clarify, that's code because when Adam says he misses the industry, he really missed the free drinks at the conferences. Right. I just want to be clear on that one. So, Data, please give us a few minutes of your time. Introduce yourself.

DATHA: Yeah, absolutely. And we are so glad to have Adam on board. He was a phenomenal addition to our senior leadership team. I'm Data Santa Mary. I am one of three co-founders steadily, so my domain is the insurance. My other co-founders come from heavy tech backgrounds and my whole career has been in insurance, building programs, building operations, doing the rates and all that stuff that kind of goes into insurance. And we, we partnered up to create steadily because on the side we were also investors ourselves. I've done several flips. My co-founder Darren, about 15 properties around the country and just kind of experienced firsthand the pain that comes along with trying to get insurance for your rental properties through the traditional market. And it just didn't make any sense where when you can go online now and you can get a homeowner's quote within a few minutes and it's seamless and it's easy that you can't do the same thing for landlords. And so we pondered it for a while, three years, actually. We pondered it, and no one had entered the space to solve the problem. So that's when we created steadily with the intent of addressing this to make it easy and seamless, remove the friction, use the technology to make it fast, fast access to those policies and still affordable. So it's not, you know, extraordinarily more than you're paying currently. And so that's what we've been up to for the last couple of years.

BRAD: Cool stuff. So let me let me go backwards a little bit and give us a very long monologue because she's talking about the solution. But I want to illustrate the problem at length, because here we are getting let's face it, when we sign up a new owner to work with us as property managers, third party property managers, we have an owner or if you're an individual landlord that owns properties or hundreds of properties, the problem is getting the proper level of insurance for that homeowner. And so us as property managers are several techniques. You know, you sit down with them at the at the kitchen table and say, okay, by the way, when you sign up with us, you're going to need to get this level of homeowner's insurance that names my company as additionally insured. And so these insurance companies, they have different terms for that. They call it additional interest. They call it additional other stuff. I mean, it's just they have different terms. And so you never quite know if you're correctly covered. And so that's. Part of the problem. So even at the networks, what we had been doing and and it's really kind of a workaround is we were charging a surcharge. So automatically we would put this surcharge on top of an owner at the signing of the Property Management Agreement. And we tell them face to face and it's in writing and say, look, we don't want to charge you this.

BRAD: You go out, you find the proper level of insurance, you name rent works additionally insured and we will remove the surcharge for ever and ever and ever. And even then we're only getting, I don't know, 60% compliance, 70% compliance. I mean, it's a silly number of the owners that either one have apathy against it just don't comply. Or two, they don't want to change carriers like they don't want to change and shop from USAA to State Farm to farmers to you name it. They just don't want to go out and get you the proper level of insurance. All right. So backing up a bit on that, who cares? Right. However, what happens is let's say there's a claim, a tenant gets hurt, a vendor gets hurt, the mailman gets hurt on the property and there's a claim. Well, if they come out and find that there's not the proper level of adequate insurance from the homeowner, guess who the next big target is? It's the property manager, which means the property managers at a lot of risk being, you know, being the guy. You know, the two finger rigamarole are two, two chair rigmarole and one chair left and they're going to point the fingers at us. Now, the other side of that is just liability. I mean, let's say there is a lawsuit and the homeowner's is defending themselves and the property manager is defending themselves, but they're not working together.

BRAD: So each have to go out and find separate representation in some sort of crazy lawsuit. Now, I know I'm really getting into the weeds of this stuff, but gang, I got to explain it further because it's been a problem in our industry for a long, long time. And like I mentioned in her intro, well, what's the solve to this? What's the solution to this? And so this is what we're going to talk about more. So bear with me on that long explanation, but I got to get it out there because you need to understand that this has been a problem for a long time. Even the workaround that we have where we charge a surcharge is not working because we're still only getting a minimal amount of compliance and it's just all we want. The end of the day is for the owners to name us additional insured. So this is the solution or one of a solutions out there. And so, Adam, I want you to talk about this as like the master level insurance concept and that's kind of what you're bringing to the table. And this is very similar gang. So backing up again, a bit very similar to our resident benefits package where we make the tenants additionally insured under the master policy for the property manager. This is very close and similar to that on the owner side. So Adam, please take it from there.

ADAM: Yeah, thanks, Brad. So, you know, the I'd say the industry over the past couple of years has really gotten to a place where you understand how to administer master policies, particularly on the renter side. So very similar. A master policy is going to give you the property manager the opportunity to have complete visibility and control, to ensure that everybody is compliant, that you're protected against everything that you just mentioned. And so a master policy is going to work just just in that that example of setting up one policy under the property management company and then adding in everybody that opts into the program. Right. And so how that's administered, obviously, you know, flexibility across the board from each property manager and how they really want to implement that. But what we've seen as best practice is you say, hey, I need to I need to be listed as additional insured failure to do so. You're going to need to opt in to our program so that we can fully administer and know that we're covered and listed as additional insured. And everything is meeting the criteria that we need to protect ourselves, the property manager. So it's a way to kind of say either prove that we're listed additional insured or get on our master policy and the benefits of being on our master policy for you, the investor or the owner is that you're going to get great coverage. You're going to work with a company that we've selected and partnered with that is going to ensure that your your investment is taking care of your investment is protected and your rates are extremely competitive. And we know this because they're the best in the industry at pulling together and pulling data, using technology to know that it is the most competitive rate. So in a nutshell, that's that's how it operates. Is that does that help? Brad, is there anything else you want me to dive into there?

BRAD: Well, yeah. Let's see if data can identify anything you missed there to hear her comments. Go ahead.

DATHA: Yeah. I think that for for the landlord in particular, like when we're talking about our master policy, it has $1,000,000 of liability coverage which is going sorry. Hopefully we'll let it that.

BRAD: Oh no, we're going to keep running and we're going to we're going to make you all embarrassed. And because you're all worried about getting edited, I'm like, Nah, we're not going to edit anything because, you know, we all have these these burps and hiccups when we when we speak to each other anyway. So let's just roll that. And when you get back on line, let's go after you drink a cup of water there and we'll rock. What do you think?

DATHA: Yeah, sorry about that. It came out of nowhere. I was saying with our master policy, there's $1,000,000 of liability coverage, which most of the standard policies that we see are usually 100 to 300000. So when we're talking about maximizing protection, having that higher level of liability coverage certainly makes a difference. And from the landlord's perspective, again, what's in it for them is they've got they've got somebody who's kind of overseeing things, you as the property manager, making sure that things are handled smoothly and seamlessly so they don't have to call out to 15 different agents trying to find coverage. They can just come to you. You can present them the quote or the premium that we're providing, and they can take it or leave it. From the property manager's perspective. I would say, as Adam mentioned, just that visibility into what's going on, you know, whether or not you're listed as an additional insured on these certificates because you are the master policyholder. So you can see every property that's covered under that policy. You have the option. You can either have it still billed directly to the insured, to the landlord, or you can just collect the the funds from them and you can pay it yourself. But either way, you also know if that bill isn't getting paid and the coverage is lapsing, which unfortunately is very common.

BRAD: Well, let's hang on a minute. Let's hone in on that, because that's a couple of key points that I really want to stress, is the first one is you're going to be named the proper term and that has some legal ramifications to it because if you're not, name the proper term and I'm butchering this data, so pardon me if you're not named officially insured or if you're named additionally interested, they may be different because the policies are written differently and if there is a claim, they're going to run straight to what's written in their policy and say, well, you were only named additional interest, so we're going to give you $0.05 of coverage versus $5 Million coverage, whatever the landlord opted into. So being named the correct term is important. So I didn't want to skip over that because, you know, the correct term is almost up in the air because the carrier themselves that write that policy, they may dictate that term to being something different in this regard. You know for sure that you guys are trying to look out for one, the landlord and two of the property managers. So that is going to be written correctly in the policy to where there's not going to be any, oh, we're going to wiggle out of this and wiggle out of that type of stuff.

BRAD: I would assume so. And I'm assuming you're going to back me up on that. So before we go that way, I also want to say, you know, skipping past the how you pay is a really neat opportunity for property managers. So when you get all this set up and you add somebody to your master policy, you can build a monthly, you can build them quarterly, you can build them annually. It correct me if I'm wrong and this one, guys, but there's an opportunity for you to offer a really nice service to your landlords to say, look, we're going to tie in your homeowner's insurance into your monthly payment, so you're going to pay extra fees. You know, we're going to pay Y for your maintenance that month and Z, you're going to pay for your monthly homeowner's or your landlord insurance, right? Your homeowner's policy. You're going to pay monthly for that. And so I see that as a really neat thing for all kinds of different reasons. But anyone want to comment first on that part?

ADAM: Yeah. You know, I'd say it's something where you're bringing value, right? And I know that's everything. That's that Brad you've been talking about is these aren't these packages and these offerings. There's a reason why you're offering them. It's because you're you're adding value in providing a service that's going to be beneficial for your owners or on the residents side for your for your tenants. Right. For the owners. As we talked about in the beginning, shopping for insurance is a pain, right? You have to call around and talk to a bunch of different people. They're going to ask you a million questions. It's a very archaic way of doing business. And that's what we've that's what we've brought to the table. It steadily is it's a frictionless process, to a great point.

BRAD: Let's let's really hammer in on that, because this is, in my opinion, from understanding this whole thing. This is the easy button, right? And so I've always talked about this as like, okay, we want to be able to help the owners and landlords and tenants, whomever the vendors press the easy button. And if this is that, because I'm envisioning this being implemented, where you present this at the kitchen table, you're talking to an owner, they're interested in your services and they want to sign up with you. And they say, What are you doing for homeowner's insurance? They're like, Oh, you know, they give you that shoulder shrug and you say, Well, tell you what, here's a flyer. Well, here's a web page, landing page that you can go to to get a quote nearly instantly. So please tell me about the quoting process, because this ties right into the easy button. Go from there.

ADAM: Yeah. So I think there's the great opportunity with the master policy is that there is, there is no shopping that that your owners will have to do right there. The policy is set up by you, the management company. It's been selected and the the levels of coverage has been determined. And so it's it's quite simply a here's the rate and this is the policy, the interaction with our team. We have the best insurance guys in the business. I mean, you know, our our sales agents have on average five over five years of experience. And so we only hire folks that are the best, the best and most of the interaction with them, which was very eye opening for me coming into the space again, I was in the property management software space, not the insurance space, but coming into the insurance business. It was really cool to see what they were doing of being the Geico landlord insurance where you can get an insurance policy without ever talking to anybody if you wish. Obviously they're there to have phone calls and consult and advise you on coverages, but you could literally bind and get a policy in place just by SMS texting. Right. And so it's it's very much a tech forward, different way of doing business that a lot of our customers are just loving.

DATHA: So I'll jump in there too and kind of share the benefit of master policy is that it's not it doesn't have the same underwriting approach that a traditional policy does where you're going to have 101 questions that you need to answer to make sure that it fits and you're getting the right rate. With a master policy, the approach is really more of bulk grading. So we're saying we're taking we're taking what we expect to be this large portfolio and we're looking across the board. And so because of that, we don't have to we don't have to ask 101 questions. You know, you pretty much put in the address. We provide the parameters. You know, it needs to be a wonderful family dwelling. It needs to be a long term rental. You can be doing a fix and flip. That's totally fine, too. What's the value that you need on it? Do you need any content? How much loss of rent are we adding? And you've got your million dollar liability, here's your deductible, there's your price. And it really is as simple as that.

BRAD: That's good stuff because, you know, we've got a couple of ways of thinking about implementing this one. You know, obviously in the kitchen table presentation up front with the new property management agreements. But two, also going back to your current existing landlord base, your current customers with this opportunity and say if you're interested, you can sign up here. You know, here's a cool thing that we've got to answer as well, because every property manager is going to ask you this and we'll get into this next. But I'm going to do the Robert Gilstrap impression, aka Yosemite Sam. Are you ready for this? How am I going to make money? How how am I going to make money on this? You know, you got to shoot air pistols in the air. That's you, Sam. Sam a.k.a Robert Gilstrap. Now, Robert's right, though. He is right. How are we going to make money on this question mark? Please give me a few comments on that.

ADAM: Yeah. You know, I'll jump in there. Right. So. First and foremost, we pay the best referral fees in the business. Hands down. And so what you guys, as a property management company are we don't expect for anybody to be licensed and be insurance licensed specialists. Right. That's what we're here for. So what you're doing is you're referring folks to us to come and talk to us and ask us all the hard questions because we're licensed to do so. So that's super important, right, to kind of lay the groundwork. And so from there, there are referral fees that we would pay to a property management company for driving referrals to us. And then additionally, Brad, this is your area of expertise. You know, we're obviously not not going to tell property managers how to administer and how to how to set their fees. But there is opportunity to do administrative fees or, you know, the different fees that that you can do for the monthly service of these plans to to your owners. Right. So there's there's there's two opportunities there if you so wish to pursue that.

BRAD: Yeah. I thought the monthly opportunity for monthly billing was really good because it makes you landlords, your owners, your clients a little bit more sticky because they're getting really good insurance and working with you and then you're paying that bill for them on a monthly basis. Now, the accounting side, I don't envision to be too hard because you have your own payment portals and it can be done electronically. But here's the opportunity for property managers is you can charge an admin fee every month to collect in that money, turn around and pay out that money and then reconcile everything in the back side in a reasonable admin fee, you know, three, five, seven bucks, something like that could be administered or you could wrap it into one of your bigger plans. So if you have a three tiered pricing model, for example, you might be able to wrap it into that as a feature. One of the things we talked about is we have a maintenance service package at rent works and it includes an annual HVAC inspection. It includes inspections for the the home assessment before renewal. It includes discounts on keeping the home between tenancies. And it's a really good monthly type package.

BRAD: Well, I'm considering looking at that as well. Now, the opportunity to potentially rename that to an owner service package or an owner's benefits package or something along those lines, you can wordsmith and however you want, but essentially saying, you know, as part of this package, you get master level insurance or an opportunity for master level insurance. You have to opt into it, of course. But that's that's kind of above and beyond what other property managers are doing, especially on the normal. So I think that would be a real good opportunity to market that and keep those clients coming to you. It's like, wow, you really are the the lead in the market. You're the resource that we want. You know, you're doing things above and beyond what other potential property managers are doing or that I could do myself. I want to hire you. That's how we continually grow this industry and do better is add the services that solve the problem, right? The whole shark tank thing, solve the problem and we identify the problem just being uninsured or underinsured homeowners that we work with as third party property managers. Data Did I missed anything in that?

DATHA: I don't think so.

BRAD: That's right. I never miss anything. Of course, she's gotten to know me pretty well, just in a few phone calls, and she's shaking her head like, No, you just keep talking. We'll just keep sitting here and shaking her head. Yes. In a proper fashion. No, there's got to be something I missed. Now, the quarterly thing, are you able to charge quarterly, for example, and do a billing that way? Is that kind of an outside of what you like?

DATHA: I think the the problem that you would run into with quarterly is the the program is going to expect to be paid monthly. So if you end up charging the landlord quarterly, essentially you or someone else is going to have to front those three months or just collect those first three months up front. And so then you're paid for at least three months. So you could do it that way. That would be fine. And then maybe just to tie in to what you said about the administrative fees. The key is to understand that the insurance policy itself cannot be changed. So you would not be able to come in onto that insurance policy in manuscript, on administrative fees, but whatever you do outside, tying it back to the policy itself. So that's where you want to be careful because since most PMS are not going to be insurance licensed, you're not allowed to receive commission, you're not allowed to be an adviser. From an insurance perspective, that's where we are here. So if they want to talk about coverage, get us on the phone. We'll answer any questions, send us an email, text us. We're responding that way. But if you just tie it to this benefits package or the services that you're providing from an administrative perspective as a PM, that's fine because that's not actually related to the policy itself, if that makes sense.

BRAD: Yeah, it does. And I think there's a real good opportunity for property managers to bury it in the gumbo. Right? You mix it in, you bake it in, as they say, to where if you did have some sort of owner services package or whatever you want to name it, I mean, you can wordsmith that to death, but essentially you're burying that little admin fee cost that you incur, like there is cost to this. I totally am on board with the monthly type scenario, but I'm just trying to answer the question because other property managers go, well, you know, if I can reduce the burden of us having to pay that bill to a set of 12 times a year down to four times a year, I'm interested in that. And again, the quarterly is kind of cumbersome. They'd have to front the money. So really the best solution would be the monthly type scenario. And again, if you did that, that byline charge like you're talking about data, it would be the policy charges, for example, $77.14, whatever it could be. I'm just using rough, crazy math below that to rent works would be a admin fee of x insert, you know, normal reasonable admin fee charging, you know, a $50 admin fee. On top of that, it's probably going to get you in trouble, but something within reason, I don't think you're going to have any problem with that. And then it makes a lot of sense because there's a cost to do that on the accounting side. Right. So I see that as a huge opportunity. Another again, you guys got to talk more about the referral fees and how that works and set up the pages. I mean, this is really where you've got to ask or answer the question. If I ask you, how do we do this? Take it from there at them, go.

ADAM: Yeah. So, you know, we, we provide all the tools that you need to drive interested owners to us, right? So when I say tech savvy and tech first, that the tools that we've built, it's, we have everything from no code workflows to full APIs that you can that you can leverage and use. So as far as the tools that we offer, we can offer a landing page and you can be up and running and have a page on your website that is is driving interested folks to us to to get some information. We can have that up and running in a matter of minutes with co-branded with your logo. And then once they get engaged with us, we can provide the quote. When you're set up a master policy, it's very straightforward. You know, the the getting in touch with us and then getting up and going, as Dave had mentioned earlier, very quick and easy. But we provide all the tools with the right on your website with a button to click, and it's a seamless process.

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DATHA: I was just going to say one other thing that may be of interest to property managers is the property manager dashboard that we can provide. So if they want a central place that they can log in and they can see all of the properties that are currently certificate holders. Under that master policy, there's a section where they can notify us to remove a property or add an additional property that's been added, see the bills that are due, that sort of thing, just so that everything's in one place that's available as well.

BRAD: Yeah, the dashboard is a big deal because obviously you're going to add and lose properties almost on a monthly basis. Most property managers are dealing with that where somebody sells or they move back in or they change property management companies or whatever. And then of course you should be adding properties to backfill those. So you're adding and subtracting on a regular basis, making that easy on your team and or you yourself. That's a big key because I mean, the benefits are starting to stack up here as we have this conversation. It's easy to implement. You're getting paid a marketing referral fee and then it's easy to work with on the basis of a monthly type scenario where you're adding and subtracting properties and then making that payment. So a question on that, how it works. Let's say you bring in, I don't know, for fun, a dollar. You charge the owner a dollar of revenue to cover the policy. Are you billing us the $0.50 or whatever it's going to be, the dollar it's going to be based on? I'm trying to get at on booking. And the question is, are you billing us directly or is the owner being billed in a certain scenario? I mean, I'm trying to understand the billing process a bit better because that's where that's where people are going to have questions, I'm sure. Go ahead.

DATHA: Sure you can you can go either approach. So if it's a property manager's preference that your landlords come in, they get insured under your master policy and we just build them directly, then that's what will happen. So we reach out to the customer, we get them enrolled in recurring EFT so that the bill just gets paid for their properties every single month. If you want to go a step further and say I'm I'm going to collect the funds from the landlord as the master policyholder, I'm just going to come in once a month and I'm going to pay all of the properties that are currently insured under my master policy. You can take that approach as well. I would think from a landlords perspective there might be some ease of use to be able to hand over that burden and not worry about those extra fees, those payments coming out every month, making sure they're on top of things and just being able to hand it over to the property manager and say, take it out of what I owe you and make sure this gets paid every month. And so then you just cut one check for the entire master policy.

BRAD: Yeah, because it does make for a nice pretty monthly invoice and then a very nice, pretty annual compilation invoice to show exactly what's being paid for in the insurance. All those tax benefits. Right. Because they've got to go to their accountants and say this is the cost of running this home. I paid this for insurance and here's the monthly fee or here's the annual compilation of it. So I can see that being from one perspective. That's really good stuff, by the way, because at the end of the day, we want to make it easy for the landlords and that's what we do. We provide good service and this is part of how this ties into it. What are the other things that I'm forgetting to ask you about at this point? You know, the whole question of like you give somebody a sly smile and you say what else? Like, you know, what they're supposed to be saying, right? I remember Brian Hughes. He used to work for me, guys. He got this story. Brian Hughes, right. He runs a biz dev mastermind. He was working for us as a dev mastermind. So biz dev manager, right? So he's doing all the business kind of like what Adam what you're doing for steadily. And we had a phone call one afternoon and I was barbecuing outside and it was like 5:00 and I'm like, What else? Brian And I must have said it six times, and he kept giving me new answers, and I could just hear his voice tremble and he's like, thinking that he forgot something. And after six iterations of what else, I'm like, Brian, I'm just messing with you, man. You're doing a great job. Keep going. So. All right, Adam with a sly smile. What else?

ADAM: Question mark. Yeah, so I think we probably at the very opening, we should have led with this. But one of the biggest questions that came two weeks ago, I think it was when we were at broker owner was what is landlord insurance? And so there's obviously some still some awareness and education happening in the industry of what exactly landlord insurance is because a lot of PMS haven't been involved at all on the insurance side for their owners. And so I think it's important to just kind of set the set the groundwork of there's homeowners insurance policies which protect the dwelling and liability. That's for owners of a home that are living in the home. A landlord insurance policy is very similar to homeowners that it's protecting the dwelling and liability and some coverages that you can have in there. But that's specifically for if you own the home, but not living in it and renting it to someone else. Right. So two distinct differences there that is important for everybody to know. And then on the renters side, obviously, I think most of the industry is aware, but there's renters insurance and then there's tenant liability. And renters insurance covers accidental damage calls to the property, but then it importantly covers the resident's belongings. Whereas the tenant legal liability is just accidental, damage to the property doesn't cover belongings. And so those are kind of the four general policies that everybody is aware of. And so I just kind of want to give that that that foundation for everybody that is maybe sitting there thinking, what is landlord insurance?

BRAD: Let's take that. Let's take that a step deeper real quick, too, because on the landlord insurance, it's not necessarily 100% required if they own the home outright with no lean against the home, with no lender tying into that home, they don't have to get insurance unless there are certain state provisions that are beyond our control. They don't have to have that. However, if they have any sort of lean or lender involved with that home, they're going to 100% have to have that. And there's typically some minimum coverages in there and you guys are well versed in those. And so you're providing the adequate minimum coverages to that particular landlord that own the homeowner to meet the basic requirements of what lenders are going to want to require. So maybe talk a little bit about that just to kind of throw us out there, some numbers of aggregates and minimums and all this other stuff that make me want to cry. Go ahead.

DATHA: I can jump here and share a little bit about it and just kind of to double down on what Adam said about the difference between landlord and homeowners insurance. The biggest problem that you're going to find is that you if you go into it, if you could potentially purchase the homeowner's policy and it doesn't mean that they won't sell you one, what it means is that at time of the claim, when they find out that there's somebody living in the property and that it's not you either one most likely the policy is going to get canceled or not renewed, and they may have grounds to deny the claim if there's an exclusion within that policy that says you couldn't rent it out to people. So just because you were able to find somebody to sell you a homeowner's policy doesn't mean that that was actually the insurance that you need. The other thing I would say is about about that liability piece, because we do talk to landlords who say, I self insure this property I don't need, I don't plan to rebuild it if it burns down. I've got X amount invested in it and I really just want I want what I've invested in and I'll go I'll go find something else.

DATHA: And so the approach we take with that is, okay, if you, if you don't care to insure the dwelling, then we can select a very low limit on that property where you understand that if it takes 250,000 to rebuild this property, you're insuring it for much less than that. So what you get if that property burns down is not going to be enough to build that. You're fine with it. And so of course that's going to come with a much lower premium, but we're going to get you that liability because I guarantee most landlords don't want to find themselves in a situation where they're being sued for $1,000,000 over some tragic event that occurred on their property. And they they don't want to pay that out of pocket. It's one thing to cover 100,000 property out of pocket. It's quite another to have to foot $1,000,000 liability bill. So we can accommodate that. When we have those customers who do take that approach to their investment to get them a liability heavy policy instead of paying for dwelling coverage that they may not want or need.

BRAD: Yeah, that's great stuff because you're helping us set up our owners and our landlords for success, and you're doing that by providing them the correct coverage to one cover the property management company, in case there is a major claim and to to provide them a really good service in their insurance needs. And those may differ, of course, but the policies and the levels and aggregates and all that stuff kind of talk me through that because that's going to be, you know, where the property manager is going to get some pushback. You know, you're going to come in and say you have this amount of coverage and they're going to say, well, my state farmer over there says they have this amount of coverage or USAA or farmers or whatever, GEICO or whomever they they do this type of coverage. You know, that's how insurance folks, they sell their products is. They say that they have different levels of that, different levels of this. It's confusing as heck, gang. I'll be real honest with you. Maybe you can shed some light on this to help me out.

DATHA: Yeah. So since this is insurance specific, I'll answer this one, too. You're right. And the the problem is across the insurance industry that you never really know what the value of something is until there's a loss and you have to rebuild it. So everything with any insurance company, master policy, standard policy, state farm farmers, anybody, it's it's a guessing game. You're giving it your best estimate to try to determine what you believe is going to be the total cost to rebuild this property at time of loss. With the matter policy, we have quite a bit of flexibility because we can really assign any value that on the on the dwelling for the valuation that the customer wants as long as they're making an informed purchasing decision. So what that conversation would probably look like if somebody came in and they said, okay, how much do you want to insure this for? Well, I don't know how much. Well, State Farm has it for 250,000, we can set it for 250,000 to match what State Farm has, or we can just run an independent valuation on it, which we have the tools to do and we'll see what it says. And so we can present that side side by side and say, hey, the independent valuation actually values this property at 2.75.

DATHA: That's what it's estimating it will cost to rebuild this from the ground up if there's a total loss. So a lot of it is just kind of talking through figuring out what what the landlord is comfortable with. Or they might say, no, you know, I have my own contractors. If this house burns down, you know, 250,000 is going to be plenty to rebuild this. Okay. Let's take that approach. The policy does have what's called an insurance to value provision. So hopefully people's eyes aren't glazing over with these insurance terms. But basically what it means is at time of loss, we want to make sure that that property is insured at at least 80% of its value in order to be able to collect on it. So if if you're making a choice to like in the example I was talking. Where the landlord is saying, I don't care if this property burns down, I'm not going to build it. I have 75,000 invested. That's what I want back out. Then we could ensure a much lower value. It would just mean if half of the building burns down, there's going to be a decrease in what they get because it wasn't insured to value. So hopefully that wasn't to insurance.

BRAD: That was me snoring and waking up. Och no, I'm just kidding. It's very important stuff and I don't mean to make fun of it because it's hugely important. And as property managers, one thing you got to understand is they're not going to be asking you to explain all this. They're not going to be asking anybody to sell insurance. All they're doing is you're putting a resource in front of your landlords existing and or new landlords and saying this is a good idea and then leave it at that because you're driving them to a web page. You're referring them to this company steadily, and they're going to handle the sales portion of it. You're just basically putting it in front of landlords, you know, existing and or new. And that's all you have to understand is like, hey, it's a pretty good deal. You should check it out and make your own decision. We'd love to have you just jump onto our master policy, and that could be a real simple way, to paraphrase it. So explain to me you guys are talking about before you have a landing page, right? So you can add this to your website. And so when we direct landlords to that landing page, what are they seeing? What are their next steps? I mean, kind of how does that work at them? So we kind of understand that.

ADAM: Yeah, you know, the the benefit of working with us steadily is that we're flexible to partner with you, the property manager on whatever workflow is best for you, right? Meaning if you want to just sign them up and add them in, you know, minimal questions about the policy and the coverage from your owners and provide a one pager that we can help build for you that that answers all the frequently asked questions. We can do that if you want to have somewhere a web page that you direct them to. Again, co-branded on your website right there within your ecosystem. That click of a button puts them in touch with us so that they can ask all the questions. And then we can present the master policy program that we have built with you and partnership. We can do that so it can be where you're driving them to us. It can be where you're taking all the steps. Just sign them up with minimal questions. It's really, you know, however you'd like to set it up is, is what we can support.

BRAD: Excellent. So, Data, do you have anything out of that?

DATHA: I think if the only thing I would add is if you if you want to have on that widget. So you ask what does it look like when you sign up? You've got that widget. We're asking for the property address we're asking for. We're asking them to validate certain limits as far as the valuation they they get to see a premium. We say, okay, this is going to be 100 bucks for the year. How does that sound to you? Do you like it? They will have the option. If they want to just go ahead and purchase it, they can do so. Or if they say, Hey, I have questions, I want to talk to somebody, then we can get in touch with them. But we try to make it low touch. If there are someone like us who doesn't want to talk on the phone, I'm saying like us personally. I don't want to talk on the phone. Just send me what I need to know. We we can facilitate that approach as well.

BRAD: Yeah, it is amazing nowadays how people don't want to talk over the phone. It's almost baffling, especially, you know, for example, if you're trying to buy a car at this point, it's so imperative that you get on the phone or actually show up to a dealership to see if the actual if they have the actual product. But for any of us looking to do that, it's like, I don't want to I just want to know if the stuff I'm looking at online or if a text message is easy to find out if it's there. The chat feature is a big phenomenon and everyone has a chat feature. A lot of times people just don't want to talk to anybody over the phone any longer. I mean, think of all the things you can do without ever communicating over the phone. You can you can book a VRBO or an Airbnb without ever from your phone, without ever, talk to anybody you can order food without ever talking to anybody. I mean, it's just that's the phenomenon we're in. And it's interesting and hopefully that this is going to be along those same lines. And again, the easy button for property managers is going to be a key, because that's where I envision the huge benefit for us and for the landlords that come in under this policy are going to be. So I thought this has been a really cool conversation between the three of us about this new offering. And I want you to explain to people what's the next step or how is the best way to reach you and talk more about it?

ADAM: Yeah. And thanks again for having us. This has been this has been very, as expected, a very great conversation with you. Brad always enjoyed catching up. So to find out more about the program, we do have a website set up where you can go and learn all the important details. It's steadily. Dot com forward slash partners for PM. So we've set up that page to answer all your questions and it has the opportunity to reach out and find out more. And in closing, one thing I'd say about steadily, right, we talked about insurance, how confusing it can be. The important thing is, is knowing that it's steadily our function, our core focus is landlord insurance. That's what we do. When you work with a lot of other insurance carriers, they may do home, auto, all kinds of different stuff, like we do landlord insurance and we're going to do it better than anybody else. Right. So when it comes to having questions as folks in property management, in real estate and investing, you're going to want to talk to people that get it and understand it. And that's who we are. Right. And like I said, we're going to make sure that you get the most competitive rates that meet your risk tolerance and what you're looking for. And that's that's what we do.

BRAD: And a paraphrase, too, you have two ways to make money as a property manager in this regard. You have potentially small admin fees per month and you have a pretty good referral fee program, if I recall. I don't I don't know how to explain all the specifics of that. You can go over that with each one of the prospective property management companies that you might work with. But there's your opportunity too, right there, providing a good service and getting paid to do that with a little bit more revenue generation. I think it's a win and everybody should look more further into it. Nathan Any closing comments?

DATHA: We appreciate it. Like Adam said, we were we were built by landlords. For landlords. We're a tech company, but we also have heavy, heavy insurance background. And we're we're solving what we felt like was a gap. We didn't just come up with a good idea because we thought it would sell. It was because we had a personal pain point. We saw a gap in the marketplace and we jumped in to fill it.

BRAD: Great conversation, gang. I really hope to see you guys at the Property Management Mastermind Conference coming up in May of 2022 at the Red Rock Resort there in Las Vegas. There's plenty of time to still get in there and go sign up and see you there. So be sure to get a booth and set up for that event. Thanks again for coming on the show today, gang. I appreciate it. And we will stay in touch and see you soon.

ADAM: Thanks, guys.

BRAD: Everybody, this is Brad Larson. I want to talk to you about a new podcast out there that I would highly recommend called 300 to 3000 How to Grow Your Property Management Company to Scale. One of the hosts is Matthew Whitaker. He's a good friend of mine. I've visited their operation and I really, truly respect what GK Houses has done and they are still doing. They're an experts at growing at a fast scale into a large scale business. So expect to hear the real world truth about all the mistakes the company has made growing into it and all the good things are doing. Again, go to 302 3000. That's your website and catch them on iTunes, Spotify and or Stitcher. Look forward to hearing from good things from those guys. Take care

ANNCR: This has been a podcast episode by Property Management Productions. Be sure to subscribe to our podcast, leave us feedback and come back for our next episode.

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About The Host

The Host of this Podcast is Brad Larsen from San Antonio, Texas. Brad is the founder and owner of RentWerx, one of the fastest growing residential Property Management companies in Texas that currently manages over 700 single family homes.