SW Florida Realtor, Billee Silva, interviews Monica Frier from Nash Insurance and Associates who discusses the recent changes to Flood and Property Insurance.
To learn more about Billee Silva:
www.SW-FloridaRealtor.com
Jones & Co Realty
(239) 247-2490
SW Florida Realtor, Billee Silva, interviews Monica Frier from Nash Insurance and Associates who discusses the recent changes to Flood and Property Insurance.
To learn more about Billee Silva:
www.SW-FloridaRealtor.com
Jones & Co Realty
(239) 247-2490
Speaker Intro:
Welcome to the Southwest Florida Realty show with Billee Silva and here’s your host Billee Silva!
Billee Silva:
Good morning, this is Billee Silva with the SW Florida Realty show and today we are going to discuss some of the recent changes in property and flood insurance. Whether you are purchasing a new home or thinking about changing your current insurance carrier and just shopping rates, understanding, and navigating the insurance process can be overwhelming. I always try to get insurance quotes for my buyers, so I’m doing it pretty frequently, but it seems I consistently have questions, so I have invited a local insurance expert, Ms. Monica Frier from Nash Insurance to not only explain the process, but hopefully dispel some myths I frequently hear from home buyers regarding insurance. Thank you so much for joining us today, Monica. First, can you tell us a little about Nash Insurance and how you got into the insurance business?
Monica:
Hi Billee, happy Friday and thank you for having me. Yes, I sure can. I am a sales agent, new business agent, at Nash Insurance and Associates located in Ft. Myers. Brandon Nash is the owner, he started, he’s actually a third-generation insurance agent thee in Lee County. He started Nash Insurance Associates about fourteen years ago. His father, Brad Nash was an agent as well and then he ended up joining Brandon at the agency about three years after Brandon started the agency. One thing that sets us apart from other agents, or agencies is we have a service department that handles the calls and also endorsements which are very knowledgeable but we also have what’s called a remarket department and nobody likes to get increases on their insurance, I know I don’t on my home, auto, sow what our remarket department does is when they get your renewal they, if there has been a significant increase in your premium, they are on it. They are remarketing it to different carriers to get you the best rate. Sometimes where you are is the best rate, but we really try to make sure you’re getting the best rate possible, and they can discuss that with you too. We really try to make sure you’re getting the best rate possible either on the new business side or also your renewal side as well. As far as myself, I have been in this industry a little over twenty years. I started working in this industry with a friend of mine that had an agency I started off as a receptionist and then I worked my way into getting my license and then my agent license and then twenty years later here we are, and I really do enjoy this industry. Some days are hectic, but I really, really enjoy working here at Nash and the industry as well.
Billee:
And I can tell you really enjoy the industry because you have such a passion and you’re always so helpful and I honestly truly feel you have the customer’s best interest at heart whenever I call you. You’re my go to girl.
Monica:
That’s sweet, thank you.
Billee:
Living in SW Florida, regardless of the flood zone designation, I always encourage my buyers to get flood insurance, but I don’t know if our listeners are aware of the changes that went into effect regarding Flood Insurance as of October 1st last year, can you talk a little bit about that?
Monica:
I sure can. Well, first of all I would like to say it would be very irresponsible for me as an agent to tell you that your property is not in a flood zone. We live in Florida; we are virtually surrounded by water. All of Florida is a flood zone, you just have certain areas that are lower risk, and some are higher risk. Prior to October 1st of 2021 FEMA was rating as an area but starting October 1st of 2021 they had a new rating change of how they were rating properties and they started rating them from individual property not the area. I’ll give you an example of my home. My home was built in 1956 and is very flat, the home next door to me is brand new and was very raised so our premiums are going to be quite different because my home not being elevated and their home next door being very elevated. So that’s what they started doing was rating individual properties now which have significantly impacted the rates. One thing I can tell you for your buyers if they are looking at a property, I strongly encourage them to see if the seller has a current flood declaration on the property and if they can get a copy of it. What we do as agents we are able to use that, as not to get too technical on it, but we are able to use it as proof of prior coverage on that property to get them a much, at least hopefully, a much lower rate. For example, I just had a gentleman purchasing a property down in Naples and he was not sure if the seller had the flood declaration, so I went ahead and quoted him without it and his rate came in at 2900. Honestly, that is not a bad rate, but he was able to get a copy of the seller’s declaration and I was able to use that as proof of prior and his premium went from 2900 down to 599 dollars. Absolutely made his day that day. He was really happy. It doesn’t always work out that way, but I strongly encourage that the buyer tries to get the sellers declaration if they have it. If they don’t have one and sometimes people do not carry flood, they may not be required to by their mortgage company, it’s strictly up to them. We can still quote them with FEMA, but if their rate is too high, we can also go to Private Market Flood Companies. Sometimes they are less in premiums, sometimes they are not, but at least we have that option to do that. And also, sometimes the mortgage companies, from what I know, a lot of the mortgage companies are accepting the Private Market Floods but some of them are not, and I really feel it is based on what kind of loan you’re getting. Some are definitely requiring it is backed by FEMA.
Billee:
Very interesting and kind of scary. When I’m speaking with home buyers, I think there is often a misconception that flood coverage is included in their homeowner’s policy because I can’t tell you how often I hear comments like, I don’t need flood insurance because I have hurricane insurance and that will cover any water damage I might get. Can you explain the difference between the two, because I know hurricane insurance is a foreign concept to a lot of folks who are relocating to the area, especially like from the Midwest?
Monica:
I sure can. Flood insurance is this, it is caused by rising water from the outside. If you’re standing in your doorway, this is just a perfect example, if you’re standing in your doorway and your street is flooded and now your driveway is flooding and now your sidewalk is flooding and now your feet are in water because it’s coming to your front door, that is rising water, that is where your flood policy would come in. Rising water from the outside that is always a separate policy from your homeowners. Now your homeowner’s policy for water damage, that is for your pipes, yes hurricane damage. I really don’t get much into the claims part because that is not what we do, that is not our expertise that is definitely an adjuster’s job, so we do not get too much into that. The difference between the homeowners which would be your water damage, your pipes, toilets overflowing, that type of thing. Flood coverage is rising water from the outside. It could be from the street, if could be if you live on a lake, a pond, anything that is coming towards your house from rising water that is where your flood would come in.
Billee:
And I do think that’ another misconception people think that you have to live near water, near the river, on a lake in order to get flooded, but it can be rising water…
Monica:
Well, I would tell you an example and we’ve all learned this with hurricane Irma. I live pretty much coastal, near the coast here in Ft. Myers and when Irma came through, I was in the red section. I was like in the flood section, and I was like, oh my gosh, I was prepared to watch my car go floating down the street. I mean that’s just something you mentally prepare for. Lehigh, as you know, is the highest area, as I understand in Lee County. So, the thought of flooding out there was kind of unheard of, but the way hurricane Irma came into our area, I’m guessing the backside came in through Lehigh, they had major flooding out in Lehigh which was just crazy. So, a lot of people out there in Lehigh, thinking they were safe, we are the highest point in Lee County, they were flooded, and a lot of those people did not have flood insurance. So, I strongly encourage, as I said earlier, it would be very irresponsible for me to say you are not in a flood zone. All of Florida is in a flood zone and I strongly encourage anybody to get a flood policy because Mother Nature can be very unpredictable, and we don’t know what can happen. And a lot of people were flooded, and they had no insurance to cover that catastrophic disaster.
Billee:
And if you’re not in a designated flood zone it’s minimal so it’s just peace of mind, it would be foolish not to.
Monica:
It is peace of mind. I mean the rating for what they used to call X zones, the rating has changed, starting October 1st, the rates can be significantly lower, but you hit the nail right there on the head, it’s peace of mind and I can guarantee you probably a lot of those people out in Lehigh now probably have flood insurance because of what they went through during hurricane Irma.
Billee: I’m sure they do. Now, this is a question I think I always ask you when I call you for a quote, when do you need a 4-pointe inspection and a wind mitigation report?
Monica:
Ok, very good. Yes, that’s a big question, and I am sorry if you just heard my email go off. I like to say as far as a wind mitigation inspection, 20002 and newer. The homes typically get automatic credits because of the building code so if you have a 1990 home, but you had a new roof in, I don’t know, 2019, we definitely want to see a wind mitigation inspection because the wind mitigation inspection is optional but is what will give you credit towards the premium. So that is something that I encourage people to get and when you call me for a quote or call your agent for a quote, they will let you know when they will need the wind mitigation inspection. As far as the four-pointe inspection, we have saved a lot of clients heart ache I would say by requesting what I like to do is getting a four pointe on a home that is at least twenty years and older. Some of the carriers require them at 30 or 40 years but I like to see them at 20 years or older because we want to make sure when we’re looking at this four point and what a four-pointe is, it is an inspection that touches on four points only and that’s the roof, the plumbing, AC and heating and the electrical and that’s all an underwriter wants to see. If I sent them a 70-page inspection which I’m not telling you not to get one, definitely get your home inspection, an underwriter doesn’t want to see the 70 pages, they just want to see these four points. I ca look at it, or any agent can look at it, and say ok I see an issue here. There’s going to be an issue with one of my carriers or all of my carriers and this you definitely want to get fixed as soon as possible. So, I like to see a four point on homes that are 20 years and older. Wind mitigation is subject, we just have to see how old the home is and when a new roof was put on.
Billee:
Now, if it’s a condo and the homeowners association cover the insurance on the exterior of the building, do you still need that?
We don’t necessarily need the four-pointe inspection, but I will tell you this, we do need the wind mitigation inspection. The condo association will get the wind mitigation inspection to help on the premium for their master policies and they also know the unit owners can use that wind mitigation inspection to help them with credit on their HO6 policy for the condo, for the unit inside so I definitely advise that they get that wind mitigation from the condo associations or the property management company. Here’s a little kicker to it though, 2012, the state of Florida changed the form that was the last time they did that, so all wind mitigation reports need to be on the new 2012 form that’s the only one the carriers are accepting. Some of the condo associations still have the old 2007, 2010 form and the reason they have that is because they haven’t been made to get a new one yet. We can’t make the condo associations do that. That’s not a law, they don’t have to do it, so in that case sometimes a unit owner if they want to get credit may have to get their own wind mitigation inspection on their unit.
Billee:
Gotcha. Now, you mentioned something about HO6, can you explain what HO6 insurance is?
Monica:
An HO6 policy is for a condo unit owner when you purchase a condo. Typically, the condo association will insure the outer structure, the concrete outer shell structure, and the roof. The unit owner is responsible, and you really need to read your condo docs, we don’t do that because they can be different, but an HO6 policy would cover the interior wall coverings in, the interior of the unit. So sometimes people will say, well I’m paying 200 thousand for the condo and we may only insure the condo dwelling for 80 thousand, the reason for that is we’re only insuring the interior of the condo, not the outer building as well. So that’s the difference between when a person buys a condo. They’re wanting the HO6 unit owners policy.
Billee:
Gotcha. Lately, I’ve been experiencing difficulties with getting homes with older roofs insured. It used to be, if a shingle roof was nearing the 20-year age mark, that you might have trouble getting insurance, but then we would close and the new buyers would have like 30 days to get a new roof put on. That doesn’t seem to be the case anymore, what has changed?
Monica:
No, that’s definitely not the case anymore. The carriers have really tightened their belts on the shingle roof and even the architectural shingle roof. You know, as a rule of thumb it used to be that the carriers would go up to 5 years on a composition shingle roof, that’s your kind of lower end shingle roof, they would go up to 20 years on the architectural which is a little bit better shingle roof and then if you had a tile roof and a metal roof, you were pretty much golden. They would go up to 25, 30, 40 years on those type of roofs. Yes, things have changed, the carriers are really now tightening their belts on the shingle roofs. Even architectural where they are wanting them 10 years and newer. We do have very few carriers that will go up to 20 years still on a shingle roof. They even tightened their belt on the tile roof, they’re only maybe going 20 and 25 years. Metal roofs are still kind of golden in regards that they may go up to maybe the 30 or 40 years on those but ya, they really tightened their belts on the shingle and architectural shingle roofs. And I really feel bad when that happens because nobody wants to replace a roof at 10 years but unfortunately, we do have to abide by the guidelines of the carriers and if that is what they say that is what we have to go by.
Billee:
And the days where they can wait until after closing to get insurance for the new roof, that’s not in affect anymore?
Monica:
Well, it was never really a rule, it’s really up to the carrier and if you can talk to an underwriter that is what we really try to do. We definitely go to back for our clients and its easier to get the 30 day extension for a new roof after closing if we’re not in hurricane season so sometimes if I go to say right now in January/February if I go to my underwriter and say they want to bind this policy they are getting a new roof within 30 days they have the contract with the roofer, they have a paid receipt, is this something you’re willing to take a look at and if I provide you with this documentation would you give us a 30 day extension on the roof and usually they’ll look at it . It’s not always 100%, but I have had them come back and say yes. You can go ahead and bind the policy with the older roof with the understanding that we must receive documentation in 30 days that the new roof has to be placed on the home.
Billee:
Ok. Another stumbling block I’ve been experiencing is the age of the water heater.
Monica:
Oh yes!
Billee:
Is a buyer going to have difficulty getting insurance if the water heater is old and what’s the magic cut off age?
Monica:
Water heaters, it’s been crazy because its something that has been new the past 2 to 3 years and they want the majority, one of my carriers particularly, yest they want the water heater 14 years or newer. And I pretty much say that across the board with all my carriers, yes 14 years or newer is the magic number. They’ve experienced water losses with the water heaters leaking in the middle of the night. Most of them, yes are in the garage, but for them to say who’s in the garage, who’s no, who’s in the bathroom, who’s in a close in the bathroom, they can’t differentiate that all the time, so they just had to put one golden rule out there so it’s 14 years and newer. What will happen usually is when I try to quote a policy, I do ask, that is on of the questions I do ask. Do you know how old the water heater is? Some will say, ya it was just replaced two years ago, great! If some will say , well it’s probably 14, 15 years old I let the client know I will indicate that it is 14 years old but when the Carrier does the inspection and they find that it is either that age or older they are going to let us agents know and what they are going to do is usually first they are going to request that the water heater is replaced and then we have a certain amount of time to send in that documentation that the water heater has been replaced. If it is not replaced in the time frame the Carrier has given us they will cancel the policy they will set it up for cancellation so I always, that is one of the main questions, it seems random out there when I ask a client, so what age is the water heater and they’re probably thinking well that’s random but that’s the reason we do ask that because it can cancel a policy if its older and not replaced.
Billee:
Wow, so that’ petty serious.
Monica:
It is serious, yes.
Billee:
Nothing to mess around with because I’ve had clients say well, we’ll just tell them that it’s new and I’m like well, you’ve got a 20-year water heater, you’re bound to get caught.
Monica:
Well, the Carriers now where they’ve gotten smart not is some of them will ask for the four-pointe, so we actually send in the four-pointe and one thing I want to mention about a four-pointe, if a carrier does not do their own inspection but they ask for a four-pointe inspection that four-pointe inspection has to be a year old or less. It cannot be a three-year-old four-pointe inspection. That’s one thing I wanted to make known, and it just popped into my head. It has to be at least one year old or less, the four-pointe inspection. So, either they’re going to ask for the four-pointe inspection and they’re going to see it on there, how old the water heater is, or they’re going to go and do their own four-pointe inspection. They’ll actually make an appointment with the client and go out to the home to do that. So that’s again, why I like to, I can’t speak for all agents out there, but for my self I like to ask for the four-pointe inspection on homes 20 years and older so I can see what’s going on and hopefully ward off any problems, you know, after we bind the policy.
Billee:
Good to know, good to know. As a realtor, we always hold our breath when we discover a Challenger or Federal Pacific Electrical panel, or polybutylene plumbing because we know it’s going to be difficult for our buyers to get property insurance, yet we often hear from the sellers, I’ve lived in this house for 30 years and never had any issues, I have insurance, I’m not fixing it. What does this mean to a buyer who is looking at purchasing a home with a Challenger or Federal Pacific Electrical panel or maybe polybutylene plumbing, will they be able to get insurance? Is it again like the water heater and the roof?
Monica:
Well, it’s actually much more than that. It is and it is not. In some cases, I have Carriers that won’t even quote it or even let us bind it if it has. The four that we have on the list are Challenger, this is for the electric panel boxes, Challenger, Federal Pacific, Zinsco, that’s ZINSCO and Sylvania. Those are the four major ones. I know our Carriers will not accept and sometime like I said they will not even quote or write a policy with those. If it slides by and say we have a home that is five years old, well I’m certainly not asking for a four pointe on a 5-year-old home. If for whatever reason this 5-year-old house has a Challenger, Fed Pacific and it slides by because we didn’t know when the Carrier goes out for the inspection, they will at that point say this is an unacceptable panel box, it needs to be replaced right away or we will cancel the policy. So that’s again, why we definitely try to see what it has. If we see Square D, that’s like winning the lottery. Square D is like the one you want to have. So Square D, we’re good. As far as the plumbing. Yes, the cast iron, polybutylene is a no no. I think I have one carrier, maybe two, that will take polybutylene but that’s very few and far between. What the deal is with polybutylene is, I guess back in the 70’s, 80’s and 90’s, it was used. It was inexpensive so it kept costs down and it lasted for awhile and then it started to leak and one of the major aside from catastrophes like a hurricane or tornado, or anything like that, one of the major losses that can get expensive real quick is a water damage claim because it is so much more than water damage. It’s water damage to the flooring, the cabinets, carpet, drywall, and then of course we all know what happens when drywall gets wet, mold sets in. So that is why they have had to put the kibosh on the polybutylene. Some pex plumbing, cast iron and there are also some pipes that are flex, and I wasn’t really sure what that was until I delved more into it, and I’ve seen it under sinks. It looks like a flexible plastic pipe and while it looks ok, you know how flex can be, it can flex and then it wears a hole in it and now we have a water leak. So those are some things the Carriers will not accept on the plumbing.
Billee:
Wow! So ok, last question, I have found that buyers typically think they need to insure their home for the purchase price or market value, and you talked a little bit about that with the condos but, can you explain the difference between insuring your home for its replacement cost vs market value?
Monica:
Yes, that’s a very good question actually. Replacement cost is what it would cost to replace the home in today’s market. Most of our Carriers have what is called a replacement cost estimator and so we plug in, and it kind of calculates it on the back end. It knows the area, it knows the construction type, mainstream vs frame, square footage is a big factor. So, there’s a lot of factors that go into getting that replacement cost. So, you may be paying let’s just say $600,000 for the home, you may b paying that as a market value, but we may be only insuring the home for 450,000 or 500 and the reason for that is you are also paying in that $600,000 for location and you’re paying for the property. We don’t insure the property, the actual land. The lands not going to go anywhere, hopefully. So, we are not insuring the land, we are insuring the structure of the home so that is sometimes where you see the difference from what a client is sometimes paying for the property of the home and what we are insuring it for.
Billee:
Oh my gosh Monica, I cannot thank you enough for taking time out of your busy day to share your wealth of knowledge.
Monica:
Oh, you’re very welcome. I’ve been very happy to do it.
Billee:
How can our listeners get in touch with you?
Monica:
Well, I’m at Nash Insurance and Associates. Our address is 8801 College Parkway, Suite 5 in Ft. Myers. My direct number, you can call me directly is 239-690-4840 and my email is my first name, Monica, at NashFl.com that’s Na s as in Sam FlL.com monica@nashfl.com.
Billee:
Thanks, friends, for listening today, remember to share my podcast with your family and friends. I’d love to hear what topics you’d like to hear more about, or guests you would like to have appear on the show, so please do not hesitate to reach out to me. Until next time, stay well and make it a great day!
Speaker’s closing remarks:
Thank you for listening to the Southwest Florida Realty Show with Billee Silva. To learn more about Billee Silva go to www.sw-floridarealtor.com. That’s www.sw-floridarealtor.com. Or call 239-247-2490.