Why Maintaining a Relationship with Your Insurance Agent is Vital

The Importance of Maintaining a Relationship with Your Insurance Agent

Similar to other real estate investing relationships like lenders, contractors, and more, maintaining a relationship with your insurance agent is vital for a successful business. While most investors will agree that insurance is necessary, they don’t realize how they can customize their policy based on their investment strategy.

Today, Scott Kroening, NREIG’s Program Managing Director, is sharing why it’s important to maintain a relationship with your insurance agent and other tips for success in insurance.

Finding the Right Insurance Agent

The first thing is the agent’s willingness to educate and provide explanations to the client. As agents, we want to educate our clients, but in order to do that we have to be educated first. There’s a lot to know about insurance, and policies have a lot of information in them. One thing about NREIG is we really take the time to educate our team, especially when industry and policies change. This way we are able to better serve our clients.

Another thing is just having the resources to find answers and options. We have a team of 25 agents and are growing. Within that team, there are different backgrounds and levels of experience. A team with claims, underwriting, and other experiences is a valuable resource.

One thing that’s a little unique to us is finding someone who understands the unique risks associated with real estate investing. Insuring rental properties is different from owner-occupied properties, especially when it comes to occupancy status. When your property changes occupancy status, the risks change, and it is important to properly insure those risks. An agent that understands that and makes it easy to navigate is vital.

Lastly, find an agent that will learn your portfolio and business strategy. Someone who will want to grow with you. We’ve had clients start with one or two properties and then over the course of a few years grow to ten to twelve properties and so on. It allows you and your agent to build your relationship. When you get an insurance policy, you’re not just paying for the coverage, you are also paying for expert advice. Utilize it.

Maintaining the Relationship

As agents learn your goals, it allows for more personalized service and better support. They can offer catered strategies and find you places to save. We like to say, “one size fits none.” And that means that we know everybody’s strategy is different.

We have some clients who inherited a property and fell into being an investor. We can help them better understand their needs. Conversely, we can also help those seasoned investors with further understanding insurance.

Building a Long-Term Relationship

Communication probably jumps out to me the most. Insurance is not everybody’s favorite topic, especially with someone who has a lot of assets in real estate and is probably pretty busy. It’s not something they really want to think a lot about until there is a loss. Filing claims can run a lot smoother when you’re properly insured and proper communication assists with that. When there is a change in your property, like maybe you sell it or turn a long-term rental into an Airbnb, you have to communicate with your agent.

We know communication is a two-way street. So, we will also reach out, if we haven’t spoken in a while. Yearly, we’ll do a review of your portfolio and make sure we are on top of everything.

Annual Policy Reviews

There’s a lot of nuances with this. First, make sure everyone is listed correctly on the policy. For example, maybe your lender changed. If there is a loss and your policy information isn’t correct, chances are payments won’t be correct.

Again, I’ve mentioned this a couple of times, but the occupancy status needs to be checked. Let’s say you have fifty properties and they’re all in different stages. Maybe a new construction is now sold, or maybe you bought a property to flip and it is now tenant-occupied. Those things change over the course of a year. And if we’re not correct in how we have that set up in the event of a claim, you may not be paid correctly or at all.

We’ll also look at if your risk tolerance has changed. As you gain more properties, you may be willing to self-insure more and want to increase deductible amounts, which would decrease your premiums. Or maybe it’s the opposite and you are more concerned about a loss and want to decrease your deductible.

Another thing is looking at which forms your properties are on, basic or special, and if you are still comfortable with the losses they may cover. If your property is in a safe area and you don’t believe theft to be a risk, then you may want to have basic form and save some money there.

Ancillary products are another item to review. Are there gaps in your policy that you may want to fill, such as Flood coverage? There are also products for Terrorism, Earth Movement, and more.

Overall, I would say it’s a good time to think through your current situation and consider if a loss happens, how you would like your insurance policy to react.

Last-Minute Advice

I touched on so many different things, but the bottom line is, you’re paying a premium, and that comes with expert advice. We have a team of experts that is simply a phone call away. It’s so frustrating to call and get a machine. So, when I think of how to put the client first, I always think about how clients should be able to speak to a person when they want to and receive that expert advice.