your checklists are a safety net for you & your clients
I was on an amazing Realtor property tour yesterday that included a 1-hour CE credit ... we were schooled on insurance throughout the tour, compliments of Paul Guerrero Insurance Agency. I've been in the real estate biz 25 years and this was great content & the best Realtor property tour I've ever been on (oh, & mimosas)! Here are a few things every Realtor needs to add to their seller or buyer checklists.
1 - Insurance Vacancy Endorsement (listing checklist)
If your listing is vacant or is going to be vacant or is staged & is going to be destaged, send this email to the seller:
I want to make sure you reach out to your insurance provider & discuss with them their requirements for what is called a vacancy endorsement. My understanding is that when it is staged they consider that "not vacant" (I believe they have a differentiation between occupied, vacant, & not vacant). These policies can vary from provider to provider ... it's best to check to make sure you are covered and to make sure you understand if the coverage could change if / when staging is removed. Need to make sure your coverage is solid, always best to check.
This helps protect your seller (if they actually make they call ... THEY NEED TO MAKE THE CALL) and it protects you. If that house has damage while it is vacant, the seller could have serious problems on their hands if they have not addressed this with their carrier. Best practice would be for the seller to have AN EMAIL to their carrier (documentation) that they requested the information.
2 - Prior Insurance Claims? (listing checklist)
When you're sitting at the kitchen table with the sellers preparing to go on market, you're following your great big checklist of things to ask, right? Make sure one of the questions you address is asking the seller about prior insurance claims / claims history on the property. Why do I want to know this? I want to have an idea if the eventual buyer for the property may possibly run in to an issue getting a decent insurance policy on the house. Good to know these things ahead of time.
3 - CLUE Report Day 1 of Contract (buyer contract checklist)
This may vary a bit from state to state as far as buyers doing due-diligence on a property, but understanding the claims history on a property (the owner has to request it - only the owner, insurer, or lender of a property can access its CLUE report) will help protect your buyer. We do this on DAY 1 of the contract as we need this info early during the option period (option, that's a TX thing ... otherwise known as an inspection period). One thing this will do is help identify if the seller has disclosed properly (does the CLUE report align properly with how the seller filled out the sellers disclosure?) and will help the buyer get accurate home insurance quotes right away.
What the buyer needs is what is called a "pre-qualified insurance quote" vs just comparing rates online ... there's a difference! The pre-qualified quote actually pulls the prior claims on the property and in today's challenging insurance environment, this is critical. What if a buyer has budgeted $3,000 / year for insurance but all they can find is a $5,000 policy? Is that a deal-breaker for that buyer?
4 - Roof age (buyer contract checklist)
Any insurance quote is going to want to know the age of the roof. And guess what ... not all sellers know the age of the roof. Insurance carriers have started utilizing drones to get a full view of a roof before they quote or issue a policy. Some carriers will write the policy then 30 days later send a notice that they are going to cancel the policy unless the new owner puts on a new roof in 30 days. Yes, that is happening.
Paul did offer some advice on potential roof claims (storms, hail). He says don't call the insurance first, call the roofer for an assessment. Because if you call your carrier first or use their app to inquire, you risk non-renewal even if there is no damage. He did say you can typically talk to your agent, but not the company; depends on the company. I think the carrier is required by law to keep it in their records (even if there was no damage) for something like 5 years. I'm no expert ... you can call Paul.
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