How to Prepare for Hurricane Season: Insurance

In this interview, Brian Spitz and Kevin Price chat with Haitham Foty about being prepared for hurricane season. How can we prepare, what are our insurance options and what is Haitham’s advice.

Outline

  • Introduction 0:00
  • Benchmark Insurance and Haitham Foty intro 1:31
  • Haitham talks about Benchmark Insurance and their specialty 1:55
  • Do you work primarily with residential or business? 2:50
  • When it comes to hurricane season, what types of policies should people be looking at? 3:05
  • What is the turn around for inquiries at Benchmark? 4:20
  • What other types of policies do you recommend? 4:32
  • What is the cost of insurance, what are the benefits and what happens when your assets aren’t covered? 5:00
  • What else should people do to make sure they are prepared for hurricane season? 6:20
  • Conclusion 7:30

Kevin Price

Welcome back as we continue with the Monday edition of The Price of Business. I am your host Kevin Price, talking to you about you and your business.

Introduction: Big State Home Buyers

You know, over the weekend an NBC affiliate here did a big workshop about hurricanes and hurricane preparedness. It really is that time of the year, and in recent years we’ve been reminded of how powerful those hurricanes can be. We’ve got Brian Spitz on—he’s on every week—talking about what’s happening out there on the investment real estate front, and he’s giving a lot of great advice to people in a lot of different areas when it comes to home ownership, and he’s got a guest for us today, but Brian, before you introduce your guest, why don’t you tell us more bigstatehomebuyers.com.

Brian Spitz

Sure, Kevin. Big State Home Buyers is a company that offers seamless real estate transaction services for both buyers and investors and sellers. What we do is we reach out to people who want to sell their house with no hassle. They don’t want to list it or have listed it, you know, have inherited it—for a myriad of reasons people come to us and we provide just a seamless transaction. We contract it. Then we pay cash. We close fast and let our sellers move on with their lives. We also provide investment property to various investors throughout the Houston and Texas area, and we provide discounted properties for people who want to renovate them, keep them as rentals, or sell them off as flips.

Kevin Price: Very good. Introduce your guest today.

Guest: Benchmark Insurance

Brian Spitz: Today I brought an insurance agent that I actually use myself with Benchmark Insurance, Haitham Foty, and what I wanted to talk about a little bit today is—you know with hurricane season coming, how important it is to buy flood insurance policies, both as sellers and investors, and I also wanted to hear a little bit about his company and what kind of policies he would recommend people buy.

Haitham Foty: Brian, Kevin, thank you for having me. My name is Haitham. I’m with Benchmark Insurance Group. We’re a specialty agency. We specialize in home, auto, life, health, commercial—the works, and what we do is we really try to conquer all the needs of an insured—of a seller or a buyer—and make sure we maximize on their savings. We have a staff of over 15, 20 agents, so the turn over time is less than a day, and—claims consulting. The biggest thing about our agency is that we assist our clients on claims. Where most agents they hand you a 1-800 number and basically tell you good luck, we’re a bit more hands on. We go through the assessments. The loss assessments and make sure that you’re properly taken care of in that claim.

Kevin: Yeah, that’s great. Tell us a little bit—do you work primarily with residential situations or businesses as well? Kind of tell us how your business is divvied up.

Haitham: We geared towards more for residential. We do have a lot of commercial as well, but mostly residential—I would say 70-30.

Kevin: Yeah. And when it comes to the hurricane season what do you think people should be looking at in terms of buying—types of policies they should be looking at?

Insurance Policies For Hurricane Preparedness

Haitham: Basically, you know there are 3 types of policies to look for. HOA—I don’t know if anyone’s familiar, but you need to run for the hills. It basically covers 7 to 10 different risks: fire, water, wind and hail, lightening. What your agent won’t tell you is that it does not cover consequential loss. So he’s like, “Yeah, you’re covered for fire and water,” but if both were to happen at the same time—because if you have a fire obviously the fire station is coming out to spray your house down—you’re only covered for one of those damages, so consequential loss is not covered on HOAs.

Also, they’re only covered at actual cash value, which is a depreciated value, so if you have a total loss, you know they’re depreciating 2 percent for each year that your roof was installed. So if your roof is 20 years old that’s 40 percent depreciated you’re only getting 6,000 on the average of a $10,000 roof, which means you’re coming out of pocket to repair.

Kevin: Yeah. Go ahead.

Haitham: There’s also aid—oh, I’m sorry.

Kevin: Brian, your next question? 

Brian: Sure. Well, you know I buy insurance. Lately I’ve bought it from Benchmark for some of the investment properties that I own—one for a tenant-occupied property and one for a property that we’re currently renovating, and I just wanted to point out that yeah they do have next-to-immediate turnaround. I’ve gotten 4, 5, 6 different options. They answer all my questions quickly. I’m really pleased with working with your insurance company. So other than those kind of hurricane insurance policies, what other kind of policies do you think people should be looking at?

Other Policies To Investigate

Kevin: I would suggest going with an HOB or an HO3. These are replacement cost policies. Basically there’s not a depreciated value. It covers consequential loss. It covers the primary cause and the secondary cause of loss, and the company is not listing what they’re not going to cover.

They’re only listing the exclusions, which is really good. It really protects the client in the claims process, and if there’s a faulty claims process then it really helps you in litigation, so HO3 is by far one of the best policies out there—all risk—something to look for when purchasing or selling a home as well.

Kevin: Yeah, I want to make sure we get your website in. can you share that for us real quick?

Haitham: Yes. I’m at www.insuretxonline.com.

Kevin: Great. Go ahead there, Brian.

Brian: Yeah I mean my exp—insurance is a tricky business. It’s hard really for the layperson to know what they’re really covered for and what they’re not, and one of the things that I’m not sure people realize is that insurance is one of the largest costs you have in your life between homeowner’s insurance, health insurance, life insurance, water insurance—anything.

You always paying for something that you hope never happens.

In my business, I run into a lot of sellers who didn’t have insurance during a natural disaster. During Hurricane Ike, many people experienced total losses without insurance. Other people purchased insurance and pocketed the money from the insurance claims. Then they sold the property off as-is. So make sure you cover your assets. I’ve seen a lot of results of what happens when people don’t cover themselves.

Other Hurricane Preparedness Tips

Kevin: Yeah. No question about it. So beyond making sure that you have the right policies, what other things do you suggest people do in terms of preparing for the hurricane season?

Haitham: Make sure that your agent is experienced. Some of the newer agents—I mean we’re getting 40,000 new agents a year. A lot of things can slip through the cracks—something that they haven’t experienced, so finding a seasoned agent would definitely help. Prior to a hurricane, some of the things that I would suggest is—boarding up your windows is imperative, tarping your roof maybe depending on the category of the hurricane itself, sandbags if need be. Trimming all your trees, shrubs is huge. This prevents a lot of roof damage, a lot of siding damage. During a hurricane there’s a lot of debris flying and falling objects—just some of the things that—also take an inventory of everything in your house.

Kevin: All right. I need to wrap it up. Great topic though. This is really, I think, crucial. I want to encourage you to check out, again, our guest’s web site. Haitham, again, give that web site out for people.

Haitham: That’s www.insuretxonline.com.

Kevin: And of course we always want to encourage you to check out bigstatehomebuyers.com. While there you might also want to check the investment page and see what kind of inventory they have, and thanks to both of you. I think it’s very timely. Obviously it’s that time of the year.

Haitham: Thank you so much.

Brian: Thank you.

Kevin: I hope we experience a relatively mild hurricane season, but, by all means, prepare.

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