Episode 206: What is Insurance?

Prices climbed, storms hit harder, and suddenly everyone is talking about homeowners insurance. We sit down with Megan Lacey from Alfa Insurance to make sense of it all—why premiums rose so fast, what’s actually covered, and how to protect a new build from day one without overspending. If you’re planning ground-up construction or a major remodel, this conversation is your roadmap.

We start with the shift from market value to replacement cost and why that distinction decides whether you can rebuild after a loss. Megan explains builder’s risk during construction—who should carry it, how it shields materials and partially completed work, and when a theft or storm claim makes financial sense given deductibles. We dig into rating factors that shape premiums, from location and roof type to insurance scores, and we share practical ways to keep costs in check, like selecting the right deductible and avoiding frequent small claims.

Then we map the policy anatomy: dwelling, personal property limits, loss of use that pays for temporary housing, and liability coverage that steps in when someone gets hurt or sues. We clear up common gaps—maintenance and wear and tear won’t be covered—and show how to schedule jewelry, electronics, and other high-value items. For anyone adding a bedroom or moving out during renovations, occupancy rules matter; you may need a remodel or builder’s risk policy to stay protected and satisfy lender requirements. We wrap with the underrated hero of risk management: the umbrella policy, a surprisingly affordable way to add millions in liability protection across home and auto.

If you’re building, remodeling, or just trying to right-size your coverage, this episode delivers clear next steps and real numbers you can use. Subscribe, leave a review, and share this with a friend who’s planning a project—what’s the one change you’ll make to your policy today?

Transcript

SPEAKER_01 0:05

Hey everybody, welcome back to Constructive Conversations. I'm Zach Daniel with Victorian Finance. And I'm Luke Barkstel with Viz3D Space. And today we have a special guest with us, Miss Megan Lacey with Alpha Insurance. Welcome, Megan.

SPEAKER_03 0:20

Hello. Thanks for having me.

SPEAKER_00 0:22

Yeah, so Megan, if you want to just kind of start out by telling us maybe a little bit about yourself, a little bit about what you do, just kind of overview of who you're with, profession, all that good stuff.

SPEAKER_03 0:32

Okay. Well, I'm Megan Lacey. I am an insurance agent at Alpha Insurance. I help the local community with homeowners, auto, life, commercial insurance. Um, so basically just helping individuals here protect their financial assets and financial stability through insurance.

unknown 0:52

Okay.

SPEAKER_01 0:53

So, Megan, being in the industry, I feel like I have heard more about insurance in the past like two to three years than I ever have before. Why is that?

SPEAKER_03 1:03

Well, I have to agree with you. That is absolutely a thing right now. In the last three to five years, we have seen dramatic increases in insurance due to the number of storms we've had, the higher rebuild costs. Um, we can blame COVID. Everything goes back to 2020, five years, five, six years ago now. Um, so when those rebuild costs really started to hit home, insurance companies had to keep up. So basically, the cost is transferred there in the premium, but in addition to those rebuild costs being higher than previously, we have had a record number of catastrophic events happen throughout our nation.

Insuring New Builds During Construction

SPEAKER_00 1:38

Yeah, that's crazy. So, you know, one of the things we focus on is a lot of this new build stuff. So, like when a homeowner is getting their insurance for new builds, talk to us a little bit about that, what that process looks like, kind of what it's doing for them, some of that.

SPEAKER_03 1:55

Okay. So, with the new build, it does depend on the type of contract they have and who will take out the insurance initially. It could be the builder that may take it out during the construction process. More um custom builds, oftentimes the homeowner themselves or the purchaser will take out that policy. So, what insurance does during the construction phase is protect you just like your normal homeowners' policy would. It protects you from theft, vandalism, storms, anything that could really derail that building process where you no longer maybe have the funds to build the home because suddenly everything you've built so far is gone, it protects you from financial run even during the real build, excuse me, during the building process.

SPEAKER_00 2:38

Okay. And so, like once this home reaches a mature state and it's built and you're getting insured, let's say one of these catastrophic events comes along, like, is that are y'all looking at like the market cost? Are you looking at like the the replacement cost of the build? Like, how's that value?

SPEAKER_03 2:58

So replacement cost. Market value is its own thing when it comes to insurance. We yes, we care about market value. Homeowners, purchasers, buyers absolutely do, but as far as insurance is concerned, you want it to be insured for the cost to rebuild. So market value doesn't really hold any weight there, but we want to make sure we have the right coverage there. If something happens to the home, we can rebuild it today just as it was yesterday. That's awesome.

What Drives Your Premium

SPEAKER_01 3:24

So let's uh talk a little bit about. I know we say insurance is more expensive, so that means that the bar the buyer is paying a premium usually annually, monthly. So how do you determine what those premiums are? Is it the same for everybody?

SPEAKER_03 3:43

No, definitely not the same for everyone. Um various pieces go into the premium. So your location, the home itself, the age, the condition, and then the homeowner's financial background goes into that equation as well.

SPEAKER_01 4:00

So it's a lot like a credit score if I'm looking at lending side, it's something similar.

SPEAKER_03 4:07

Something similar, absolutely. So we do not look directly at a credit score. We would never do a hard pull on credit, though there is a little bit of a ping that gives us an idea of their financial background, and each company, each insurance company has its own version of an insurance score that we use to rate the risk for a homeowner.

Deductibles And How They Work

SPEAKER_01 4:27

Okay, and so that kind of determines how much they would pay. Now, I know in every insurance, whether it's like homeowners, auto, health, there's always like deductibles. Explain what that is.

SPEAKER_03 4:43

The deductible, simply put, is the amount that you, the homeowner, would be responsible for before the insurance company steps in. So you agree to pay X amount before asking the insurance company to cover anything.

SPEAKER_01 4:55

Okay, and their monthly or annual premium does not go towards that, correct?

SPEAKER_03 5:00

No, absolutely not. No. Annual premium provides you the protection that you need in the event that something terrible happens, that deductible is basically kind of your good faith promise. I will pay this amount, and if something major happens, I'll need you to cover the rest. Um so no, it doesn't go towards it.

Are Prices Finally Stabilizing

SPEAKER_00 5:18

Okay. Alright, so you know, some of the points we got here. Do you see prices stabilizing or do you think they're gonna continue to go up?

SPEAKER_03 5:29

Um, prices are stabilizing to an extent compared to the increases that we had in 2020 in the last three to five years. The we've had a lot of storms in the last few years. We've had the rebuild costs triple, go up quite a bit. Um, however, that inflation is stabilizing somewhat, so that's helping the rebuild cost. Our storms seem to be slowing down a little bit. Um, so they are stabilizing to an extent. However, to keep up with the inflation trend that we see year after year, there will be minor increases, but overall we shouldn't see the same jumps that we saw five years ago.

SPEAKER_00 6:08

So it'll just kind of rise in tandem with you know inflation, living costs, things like that, but not necessarily big spikes.

SPEAKER_03 6:16

Right, unless something unavoidable, unexpected.

SPEAKER_00 6:21

So I guess one of the things we're trying to help people with is all right, if you're gonna start like a new build, start to finish, kind of through those planning phases, all the way to I'm in the house, right? So you're insuring it while it's being built, and then there's an insurance policy that's written after this thing's built. What should people plan for and like how does that transition along the way?

SPEAKER_03 6:47

So as far as building is concerned, they should absolutely plan to have coverage before they start the build. You don't want to pour the foundation, you don't want to take a single step in that build until you have some type of protection there on the property. And that is not only for you know materials that may disappear or things that could happen, but also for liability purposes. Protect your assets from day one. Um, and then as the build transitions, of course, that builder's risk policy will carry you through the completion of the build, and then day one, you close on the home as it is, you take occupancy or you get that COI. Um, you need a homeowner, a true homeowner's policy that covers it in completion.

SPEAKER_00 7:28

So, as a homeowner, you know, I'm getting the builder's risk policy. I got you know 10-12 months of a custom build. Do is that something that automatically happens, or do I have to re-engage my agent to get that policy written?

SPEAKER_03 7:41

Re-engage your agent. It does not automatically happen. However, a good agent will follow you along the way and will know when you're closer to completion and will follow up so that you have that that piece in place when the home is finished. Okay, okay.

SPEAKER_01 7:54

Awesome. So um another point is just maybe backstepping a little bit, but if um if you have an insurance policy, say you know you're living in the home and then your insurance goes up next year, well what would have been the reason for that kind of increase?

SPEAKER_03 8:13

Um, well, there are various reasons that your premium could go up from one year to the next. You if you had a severe claim, um, of course, inflation is one, you know, insurance companies have to keep up with the cost to rebuild. You and the cost to oh with a cost to rebuild. So you will see those pieces, you know, your dwelling coverage increase year over year, which product provides you more protection. Um if there are a lot of catastrophic events in your community or in your general area, you will see increases from that even if you didn't file a claim because insurance companies have to keep up with what's happening in the area.

SPEAKER_01 8:53

So is it safe to say that some areas are more expensive than others?

SPEAKER_03 8:58

Absolutely. Absolutely. Your coastal areas will always carry a much higher premium than your you know um areas that are farther away from the coast. Um storm-prone areas will have a higher premium as well.

SPEAKER_00 9:14

Okay. So how are things trending, I guess, in in that aspect locally, like in our local market, say like Huntsville, Arab, Gunnersville type areas?

SPEAKER_03 9:24

So in the last three to five years, we have seen a much higher number of catastrophic events than normal. Um so in the last few years, in addition to those rebuild costs, we have seen increases in premiums due to the number of wind and hail claims, our ice storms, those were we've had so many ice storms. Definitely unexpected year after year.

SPEAKER_02 9:46

Yeah.

SPEAKER_03 9:46

Um, so that has you know increased premium to an extent. Uh, fortunately, in the last 12 months, our compared to the last three to five years, we haven't had the same number of catastrophic events. We're still we're s we have still had them, but the damage from them hasn't been nearly as severe. So that's that's helping the consumers in our area.

What Home Policies Actually Cover

SPEAKER_00 10:08

Yeah, and that's you know, we've touched on the build cost stuff, everything's just higher right now, so that that makes plenty of sense. If if you do have one of these catastrophic events, you know, what is what are their policies actually covering?

SPEAKER_03 10:23

So, well, it covers all kinds of things. So the house itself, um, so of course we'll rebuild the home depending well it depends on the type of catastrophic event. We in our area we're generally thinking of wind and hail, tornadoes, and or ice storms now. So those are covered under your general homeowners policy. Flood, of course, is not, which depending where you live in North Alabama, that may or may not be a concern. Um, but it covers the rebuild of the home, it covers your personal property, things that you you know, your your items, your clothes, your furniture. It will cover liability costs if someone were hurt on your property somehow during that. And then also it will cover a place for you to stay. So your home is being rebuilt or damaged to a point where you can't live in it, your homeowner's policy will cover that. So while you're still on the hook for your mortgage, you're paying that to ensure you still own a home. Yeah, insurance will cover either a rental home or hotel, depending on the length of the stay.

SPEAKER_00 11:21

Yeah, I think that's a that's an important note there. Like if you do have a catastrophic event, your mortgage doesn't like pause all of a sudden, like you still have to make your payment as if that home exists, and then you guys are gonna come in and issue the funds to get the home built back. Yeah, yeah.

SPEAKER_01 11:39

So um, what does it not cover? What's some things that most people would probably assume insurance covers that is not covered?

SPEAKER_03 11:48

The number one call that I receive about what's not covered is maintenance issues. Maintenance. Um, and in the insurance world, it might be sometimes it's neglect, uh, but maintenance issues, your everyday use situations. Oh, my you know, my HVAC did this. Generally, your homeowner's policy does not cover wear and tear or maintenance. Yeah. Um, so that yeah, that although there are pieces, especially at Alpha, there we do have a product that we can build in, acts like a home warranty that will cover help with those issues. But maintenance is the number one thing I hear about.

SPEAKER_00 12:26

So on that note, okay, so if you got a uh a metal roof on a house that and we'll say corrugated that has the exposed fasteners, and there's a maintenance that comes with those. Like you're supposed to replace them every few, I think it's like every seven to ten years, something like that, you're supposed to replace those, get a rubber grommet. So if the homeowner doesn't maintenance that and experiences a leak in the home, but due to that, you guys are not covering that, right?

Personal Property Limits And Scheduling

SPEAKER_03 12:52

I'm not an adjuster. Sure, no, sure, sure, sure. First, we'll preface this answer with I'm not an adjuster, but generally no. Damage, it depends where the damage stems from, whether we cover something or not. So if it is a maintenance issue or maybe neglect, you know, you neglected for 10 years to shut your door and now you know, or to replace those fasteners. Um, generally, no. So coverage does stem from where the issue stem, you know, started. Yeah. Um, so generally no.

SPEAKER_00 13:23

Well, it's something me and Zach talked about recently is uh maybe even diving into a segment uh in the future episodes on maintenance of homes and what comes with that because you know people don't think about flushing your uh uh water heater, take care of that. Yeah, you know, I know there's electricians that'll come provide like electrical health checks on your home and then you know, check your your circuitry and all that. There's a lot of things that you can do to maintenance a house to avoid having to call you guys in the first place for that, but if you don't do that, what are the ramifications when it does come to you? You know, so we're we've been toying around with uh talking a little bit about that stuff, right?

Liability Limits And Umbrella Policies

SPEAKER_03 14:05

Yeah, but well, and in that situation too, homeowners insurance does cover water damage. Sure. So while certain issues should be addressed in advance to help prevent water issues, if your home is suddenly severely damaged from water, homeowners insurance generally does step in. However, uh we wouldn't step in at that point to come repair the roof when it's a maintenance issue.

SPEAKER_00 14:30

Right. But if there is suddenly a severe water issue throughout the home because of this you may cover like the water damage portion of that and then the maintenance issue, maybe the homeowner's responsibility. Gotcha. Okay. Yeah, I think there's a think there's a lot of confusion that it just anytime there's any damage to a home, period, you call your insurance company when it's like there's some things you should probably do to warrant against those kind of damages. Absolutely. There's some responsibilities that homeowners not move in and do nothing for 20 years.

SPEAKER_03 15:00

Right. Yeah, absolutely.

SPEAKER_01 15:02

So something that you touched on a little bit ago, like okay, let's say there is a whole bunch of water damage, and insurance can cover your personal property, like your clothes, your furniture. Is there a limit to that? Or is everything just covered?

Builder’s Risk: Who Carries It

SPEAKER_03 15:16

Oh, yes, there is a limit. Every every piece of a policy has a limit built in. So on your personal property, yes, there's a limit. It's generally based on most of the cover. So we start with the dwelling protection, the house itself, and then most every other type of protection is based on the percentage of that, which we can adjust to make sure that you have as much coverage as you need, or if you need a little bit less, we can adjust that you're not paying for something else.

SPEAKER_01 15:42

It's not just capped, like you can, I guess, pay for more and get more coverage. Yes.

SPEAKER_03 15:48

And then certain types of personal property have limits outside of that that big limit that covers everything. So your jewelry, fur, firearms, computers, those generally have their own special limits. So if you have a lot of like electronic equipment in your home, that's something that you want to look into, make sure you have the right coverage there. If you have a large jewelry collection, you'd want to check into that as well. Make sure you have the right coverage.

SPEAKER_01 16:15

Okay. And uh liability protection, uh, I know you talked to if someone gets hurt on your property. Is there limits to that, or what does that look like?

Theft On Site And Claim Tradeoffs

SPEAKER_03 16:27

So, yes, there are limits to liability protection. It depends on your policy, how much you have there. Uh, usually liability is one of the cheapest pieces of the policy, so you may as well max it out because if someone sues for something that happens on your property, they generally don't go small, they go big. We see all these billboards, there's a reason that those billboards are all over. Yeah, um, there's a reason that marketing campaign is so widespread. Um but absolutely so there is a cap there as well. A lot of people, you know, I talked through that piece on their homeowner's policy. We want to make sure there's ample coverage there, but then an umbrella policy also extends that coverage, and the homeowner wants to make sure that they have enough liability coverage to protect their assets in the event that someone takes legal action.

SPEAKER_01 17:16

So, what is an umbrella policy?

Skipping Builder’s Risk Is Costly

SPEAKER_03 17:18

So it is an extension of the liability protection on your homeowner's policy, your auto insurance policy, or any other type of property policy that you own. It basically extends that liability so that you have even more and it protects the consumer from, you know, say somebody does take legal action and wins some amount of money or they're responsible for paying for damages, the homeowner or I'm sorry, the umbrella policy will actually pay that and will cover legal fees.

SPEAKER_01 17:48

Oh. Well, that that seems like a no-brainer. I mean, if you can extend all your coverages, I mean, are those kind of policies expensive as an add-on?

SPEAKER_03 17:58

No, not really, not for the amount of coverage. It depends on your situation, the number of properties you have, number of vehicles, number of drivers, those things come into play. Um, however, I quoted a five million dollar umbrella policy yesterday for right under$1,200. So the amount of coverage you get is that's crazy.

Remodels, Additions, And Occupancy

SPEAKER_00 18:15

Right. Yeah, that's a lot of coverage.

SPEAKER_03 18:17

Absolutely.

SPEAKER_00 18:18

So going back to some of the building stuff, the the builder's risk that we talked about. Um tell us a little bit about like what that is, who's responsible for carrying it, that kind of stuff. Like who does that serve?

SPEAKER_03 18:33

So no, it depends on the contract.

SPEAKER_00 18:35

Sure.

SPEAKER_03 18:36

Who so it it could be the builder that needs to carry it, it could be the homeowner that needs to carry it.

SPEAKER_00 18:42

So that's a that's an independent conversation between the builder and the homeowner.

Coordinate Lender And Insurance Changes

SPEAKER_03 18:46

Generally, yes. If the builder owns the land, most likely the builder is going to carry that policy. If they own the land and say the buyer has no ownership in the property until they close, the builder will generally carry that policy. If the purchaser or the buyer owns the land, they'll usually carry it. It's their land, it's you know, it's they have the most liability there already. Um, and so that's usually that's kind of how that piece goes. Um and now it protects them, you know, as we touched on earlier, just from similarly to a homeowner's policy, so protects them throughout the build in those different areas.

SPEAKER_00 19:25

So somebody, you know, a lot of times with build sites, you like drop material on site. If somebody were to steal material, does it cover that?

SPEAKER_03 19:34

Yes. Now there are deductibles built into builders' risk policies also. So if somebody stops by and steals a$1,000 sink, just go buy a new sink. Um go buy a new sink, it's better for you in the long run. Right. However, if someone stops by steals every bit of shingle that you need for your your$30,000 to$40,000 roof, absolutely, builder's risk policy, that's what it's for.

SPEAKER_00 19:59

Okay, gotcha. So just a little bit of protection there for them, and then it covers the liability and stuff as well. Gotcha. Okay.

SPEAKER_01 20:06

So what happens if um let's go back to your example? Someone stole your sink and they decide they want to file that. And what does that look like for them? Does now their uh builder's risk go up?

Lightning Round Myths, Red Flags, Savings

SPEAKER_03 20:19

So no, the builder's risk premium will not go up during the policy period. However, well, they will still be responsible for the deductible. So whether that sink is paid out depends on that how much they're a thousand dollar deductible and then it's a wash, yeah. Um, but it will that policy will not go up during their their policy period or the premium won't go up. Um, but there is potential, you know, frequent claims raises your premium over time.

SPEAKER_01 20:48

So once they convert to their homeowners, they may have a hit there.

SPEAKER_03 20:52

Yeah, it it will show up as a claim.

SPEAKER_01 20:55

Okay. Um what happens if someone decides to build without getting builder's risk policy?

SPEAKER_03 21:02

That's a terrible idea. I agree. That is a terrible idea. Um basically they're they're putting every everything they've ever worked for and every asset that they have, they're putting that on the line because they don't want to take out a a builder's risk policy. Um, you know, if something happens on the property, if materials are stolen, catastrophic event tears down a home that's halfway finished, well, everything that they've put into it is gone. And that that's what the builder's risk is there for, to ensure they can complete that home and it doesn't adversely affect their financial situation in the meantime.

SPEAKER_00 21:41

Yeah. Is it a is it an option for people to not build it if the home's being financed? Or does the lender require you to have builder's risk?

SPEAKER_03 21:49

The ooh hey, does the lender let's let's ask the lender here.

SPEAKER_01 21:56

So yes, uh, you will be required to have builders. Risk if you're financing it. It's the same with homeowners insurance. You can't finance a property without having homeowner's insurance.

Closing And How To Get Help

SPEAKER_00 22:08

Right. So that you really only avoid it if you're being a cash buyer. And if you're a cash buyer, then you're putting up a lot to your point. There's a ton of risk for very low spend in the grand scheme of your build. Like it's a very small percentage of the build.

SPEAKER_03 22:23

Very small.

SPEAKER_00 22:23

Yeah. Very small. It's right up there with like renting the porta potties. Like it's you know, just do that.

SPEAKER_02 22:30

Please, please, do you know what I'm saying? Yeah, just do that.

SPEAKER_01 22:33

All right. Well, uh, what is one of the biggest mistakes people will make when they're trying to insure a new build?

SPEAKER_03 22:40

Ooh. Um let's see, one of the biggest mistakes. Well, really, if they're if they don't take insurance out in time, so that's one of the number one mistakes. However, if they're financing, it is required, so surely the lender.

SPEAKER_01 22:55

Or they close, they it would have to be in place.

SPEAKER_03 22:57

Yes, yes. But on some of those builds where maybe there isn't a lender involved or things are a little a little loose, then they wait, they wait to take out a builder's risk policy. That's one of the number one concerns there.

SPEAKER_01 23:12

I would say, you know, just and I've seen this from experience, and it's one of the reasons we decided to do this podcast in general. Um if I have someone who owns land and they want to they decide they want to start building a home, they're gonna finance it. But they jump the gun and decide that they want to start go ahead and getting some of the work prepped and done before the financing is complete, and then say something goes sideways and they're just they're out. You know, we had a guy that um he decided to uh go ahead and do utilities and dug a well and did a whole bunch of infrastructure to prep to build his house, and then you know, there were appraisal issues and the loan couldn't get done.

SPEAKER_00 23:59

So you know, he was out. He's out of everything that he's already spent up to that point. No, so one one question I had, so we were talking about this as far as just new buildings go, but does any of this change if it comes to like a remodel or an addition on a new like a like in a pre-existing home? Do you still need like builder's risk and stuff like that on that? Yes.

SPEAKER_03 24:24

Yes, you well now depends on the particular type of situation and the type of remodel or addition. Um, a lot of times, and it depends on the length of time too. If you purchase a home to remodel it, sell it, or and just if you purchase it to remodel it, you need a builder's risk policy in that moment. You do, it's not just going to be your standard homeowner's policy. Um now, different types of builder's risk policies will there are different types, some are from the ground up. If you pour a foundation, you can't get this type of policy anymore. Or if if there's any framing, anything. Now there are remodel policies, not that expensive either. Um so yes, it does vary.

SPEAKER_00 25:08

So that's that would be the remodel policy. Would that be like, okay, I've lived here for 15 years and I want to add another bedroom on. Got somebody coming to live with that's what that covers? That's what you get into.

SPEAKER_03 25:20

Yes, yes. And it depends on the amount of work and length also. There are times if you do a quick remodel and you're still living in the home, it's occupied, your homeowner's policy can potentially cover you there, as long as it's not a major renovation and you've moved out of the home.

SPEAKER_00 25:37

So if if if it's one of your clients and this is something they should sit down and strategize with you and say, hey, this is kind of my intention. You know, I'm gonna maybe I've got cash or maybe I'm financing it. You know, we're we see remodels a lot, especially because of the cost of building new homes right now. Seeing a lot of people go, okay, I can just do an addition or maybe you know, add on to something to the property, just blow out some walls, any of that stuff. That's something they really need to get with their insurance agent on and kind of develop a strategy on how to stay covered through that.

SPEAKER_03 26:11

Absolutely. Okay, absolutely. And occupancy holds major weight in that situation.

SPEAKER_00 26:16

Whether they're staying in it or not. Okay. How does that factor in?

SPEAKER_03 26:21

So your general homeowners policy usually does not cover unoccupied homes. Maybe up to 30 days if you're if you're selling and there's a small period of time where it's unoccupied, but if you move out of the home long term, your homeowner's policy does not cover, generally does not cover an unoccupied home, and you do need to swap to a different policy that has that listed in it.

SPEAKER_00 26:42

Okay, so if I if we quote somebody, hey, this is this remodel is gonna take six months and it's renovating major living spaces and they need to be out of it, they need to switch policies.

SPEAKER_03 26:54

Absolutely. They need to switch policies.

SPEAKER_00 26:56

How does that work if the home is still, and I I may be just kind of throwing a bunch of stuff at you at once, but how does that work if, say, like Zach still got this home financed, right? Like you still got it financed, they still got a mortgage a traditional mortgage on it, but maybe they had they've saved up$40,000 they want to spend on the inside, but they've got to move out for a little bit. How does that work between lender and insurance agent if you still gotta have well the lender is just gonna look at uh there's sufficient coverage on the replacement costs.

SPEAKER_01 27:29

So it won't matter if it's a remodeled coverage. And if they're paying an escrow, and then you know they could look at an escrow adjustment if it is not put back into place by the time escrow is paid out.

SPEAKER_00 27:41

Gotcha. So I I mean, hearing all this, I would say that making sure you're on the same page with your lender and your insurance agent before tackling products is and and projects is like a pretty high the same team thing we keep talking about. It's just open communication with the team that you set up initially.

SPEAKER_03 28:01

Absolutely. I agree.

SPEAKER_01 28:03

I would say I would say in that case, where if they're looking to pay something in cash, get with the insurance agent, look at the policy. Once you have the policy, contact your lender uh or whoever's servicing your loan at the time and update your policy and let them know why it's being updated.

SPEAKER_00 28:22

Yeah, I mean we get calls weekly about these kinds of projects. I think we've got probably 30 right now that we're we're working on designing. So I think this is gonna be a consistent thing that starts showing up, especially with high building costs.

SPEAKER_02 28:37

Absolutely.

SPEAKER_01 28:39

Alright, well, let's go through something fun, a little lightning round. We're just gonna ask some quick questions. And Megan, I want you to give us just like a very short answer to them. I'll work on that. I'll try. I won't try so hard. We've we've we won't uh we won't go into a lot of detail, but uh, so what are some of the biggest myths about insurance?

SPEAKER_03 29:04

Price is the only thing that matters.

SPEAKER_01 29:08

One thing, what's one thing every buyer should ask their insurance agent?

SPEAKER_03 29:14

Um, replacement cost or actual cash value. Very, very important details there on your dwelling and your personal property. Done.

SPEAKER_01 29:25

What is one red flag on a property that an inch for an insurance standpoint?

SPEAKER_03 29:31

Extremely old electrical wiring.

SPEAKER_00 29:34

So like cloth wiring or like glass fuses kind of stuff.

SPEAKER_03 29:37

Yes.

SPEAKER_01 29:38

Okay. And what is the best way to lower your premiums legally?

SPEAKER_03 29:44

Legally. Adjust your deductible. Um, that's that's the number one way. Yeah. Adjust your deductible.

SPEAKER_01 29:52

I've seen that and I've done that for people, especially when we run into like debt-to-income issues and trying to get someone qualified, we'll increase their deductible um and lower their monthly premium.

SPEAKER_03 30:03

And then they qualify.

SPEAKER_01 30:04

They don't like it. They're like, wait a minute, I just want to pay a thousand dollars on a deductible to five thousand dollars on a deductible, and it's like, well.

SPEAKER_03 30:13

In the long run, it protects them because if they have a some people, if especially if they're in a situation where their DTI is very touch and go, we're you know, we're counting pennies here to make this happen, a higher deductible will protect them from excess claims, which also protects their premium long term, keep helps keep it down long term. So it's kind of a built-in protection for them.

SPEAKER_01 30:35

I yeah, I agree. Well, Megan, thank you so much for being here with us today. It was it was so awesome and helping us really break down what insurance actually means and help it make sense.

SPEAKER_00 30:48

Um that's all I think that's all we got. If you guys got any questions about insurance and how it affects you and your projects, or maybe you got uc upcoming projects, uh you can reach out to us, we can get you in contact with Megan and uh she can help you out. Thanks for joining us today, and uh we'll see you next time.

SPEAKER_03 31:06

All right, well thanks guys.

SPEAKER_00 31:09

Awesome, cool cool.

SPEAKER_03 31:11

I'll brush my hair next time.