5 Things EVERYONE GETS WRONG ABOUT HOME INSURANCE

Wow, does it feel good to be back out here. The water is actually colder than I expected. I dipped my feet in there a little bit while I'm walking along the beach here. But nothing like California of course. I haven't seen the ocean in over a month so it's really nice to be back here. And today I want to go over some problems with insurance that people are seeing and basically mistakes that people make when they get insurance. And I also want to go over later in this video what's going on with the rental market because it's something we haven't talked about in a long time. But anybody who saw that video that I did with Sean Kling who is an insurance adjuster here in Florida, he pointed out a ton of useful information regarding insurance and he sent me over this story that I wanted to go over with you guys that can really help people a little bit further and give some tips. Because there's a few things that people pretty much get wrong about their homeowner's insurance policy and they're common mistakes that people make more than you think. So if you can just avoid some of these problems when you're signing up for homeowner's insurance, you can actually save yourself a lot of headaches and probably money in the meantime. So the first one is that homeowners typically assume that their policy covers every single type of disaster when it doesn't. And they say this is the most commonly misunderstood aspect of homeowner's property and casualty insurance. Standard policies don't cover blood damage obviously, which I've talked about many times here on the channel, but not so obviously there's other things that it doesn't cover either. Not only is it important for you to read the fine print when you're signing up for a homeowner's insurance policy, but you need to discuss this with your insurance agent and make sure that all of the boxes are checked. Like look at the most common things that happen in your area when it comes to natural disasters. In California, it's fire and earthquake insurance, right? Here in Florida, it's flooding and wind damage, hurricane insurance, other areas they have mudslides or tornadoes, different things like that. So make sure that these things are covered in your homeowner's insurance policy where you're living because otherwise you could be paying a ton of money for years if not decades for a policy that you think covers you and then when you actually need it, you don't get it. This is like the worst case scenario and a lot of these insurance companies are doing all kinds of things to get out of paying claims, guys. We've already talked about that with Shawn, the different tactics that they'll use, but the latest one that I went over with you guys, even with flood insurance, is that if your property floods and you have like a three and a half inch step down in your house, they'll consider that a basement and they won't give you the payout. There's all kinds of issues that can arise when it comes to insurance that you might not understand until it's too late. Now the second big mistake that people make when it comes to homeowner's insurance is they assume they don't need flood insurance since they are not in a flood zone. Now I recommend that if you live in Florida, no matter where you live, if you live in a house, a single family house where your front door touches the ground, you should probably have flood insurance. The only exception I would say for people is if you live in a house that's raised up. You know, you saw a lot of houses during the last hurricane that didn't get flooded and those are the ones that are on stilts or raised up in some fashion so that way only the garage level is flush with the ground. But if that's not your house and you have a house in Florida, even if you're not required to, it might be smart to have flood insurance. Although make sure you don't have a three and a half inch step down in your living room. But this goes nationwide as well and they say about 22 million homes nationwide are situated in areas vulnerable to coastal storms like hurricanes. They don't have flood insurance. Only 22 percent of homeowners even believe that they're at risk of a flood and 78 percent of those people have flood insurance. So people grossly underestimate their flooding risk of their properties it seems like. Let's see if I can find the last beach video I did out here before I left for the summer. But man, the beach erosion out here is insane guys. It always happens in the same spots too. You'll see as I'm walking down the beach over here how narrow and thin it gets pretty soon. And they just filled all this in like a year ago. Maybe a little bit more than a year ago but it's all gone. But one thing that was proven during the last round of hurricanes is that floods can happen in areas that you least expect it. Just look at what happened up in North Carolina where they got all this massive flooding in Tennessee too in areas where they typically never really see this happen and it's because of the sheer amount of rainfall that was dumped in such a short period of time. And that's something that just can't really be predicted. I'm not saying that everybody should have flood insurance just in case you know a once-in-a-lifetime event like this happens but just be aware that you might not be covered if something like this does happen to you. The internet has made it so that almost no part of our lives is private anymore and a lot of that's voluntary. But it doesn't have to be that way and that's why today's video is sponsored by Delete.me. Delete.me is a hands-free subscription service that will remove your personal information that's being sold online and Delete.me's privacy experts remove you from hundreds of data brokers all year long. Data brokers are all of these companies that collect your information with or without your permission. Sometimes when you click those little boxes online saying yes I agree to this I agree to that that also gives a lot of these companies rights to use your information and sell your information and this is a way to start reclaiming some of that privacy back and getting your information out of the hands of all these data brokers that will sell all kinds of personal information like your phone number your address information about your family members things that you probably don't want giant corporations having. So if you want to get some of your privacy back in this crazy online world make sure you sign up for Delete.me and get 20% off your subscription by joining today using my link down below at joindelete.me.com slash board and arrow or use the qr code on the screen. The next thing is that homeowners aren't aware they have to pay their deductible before insurance kicks in. A deductible is the amount of money a homeowner has to pay before insurance pays out. Typically deductibles are between a thousand and five thousand dollars but I've seen you guys write me with deductibles that are much higher than that for different policies you know up to ten fifteen twenty thousand dollars or more for deductibles depending on what type of coverage we're talking about. And the other tactic that a lot of these insurance companies are using to make sure that they don't have to pay out a claim for you is they'll collect your premiums but they keep raising deductibles on these different types of damage so that say you know you do have wind damage right and you got a twenty thousand dollar deductible well that first twenty thousand dollars in repairs is on you and say you only have thirty thousand dollars worth of damage most of that you're going to be paying for out of pocket insurance is only going to be picking up a third of that cost. In fact a recent survey of homeowners found that fifteen percent of them said that they would need to go into debt if they had to pay their deductible and thirteen percent wasn't even sure what their deductible was. People are just clueless they buy homeowners insurance because you have to when you get a mortgage but most people don't look at anything of what they're buying they just look for the cheapest policy and go with that. Take a look at this guys that's the beach that's it that's all they got here ocean's right behind me it happens every time in the same spot the beach erosion is like clockwork it always happens in the same places and it's much worse in some spots than others no matter how many times they refill it with sand and try to fix it it always comes back nature always wins. This is the next big one which is something I didn't even know up until I started making a lot of these insurance videos because I've had to research and read about this a lot but it's that homeowners don't understand the difference between actual and replacement value okay so about sixty percent of homeowners face significant out-of-pocket expenses following disaster many paying five thousand dollars or more to repair their homes. They say this typically happens because people fail to understand the difference between replacement cash value and actual cash value so replacement cash value means that your insurance covers the cost of repairing the damage to your home but it often doesn't cover the items lost inside your home and actual cash value is the value of your home minus the depreciation in value it's incurred over time. So the easiest way to think about this is like say you have a house that's worth half a million dollars and it gets completely obliterated by some sort of natural disaster some sort of event right the house is gone the insurance even if they were to cover the entire disaster they're only going to give you the money that it would cost to rebuild the house at best you know that's best case scenario which probably almost nobody gets the full replacement value in a situation like this but let's say you did for a minute and let's say the replacement value of the house is two hundred fifty thousand dollars so even though your house is worth half a million you're only going to get 250 grand to rebuild it people are often just shocked when they only get 50 percent of the replacement value and they'll understand that that's what they're actually insured for not insured for the actual value just the replacement value and then the last mistake that a lot of people make with insurance is that they don't realize they should review their policy once a year and obviously the fine print changes year over year so it's worth looking at and i have to be honest guys i'm guilty of this too but i have a condo so i don't really have much insurance anyways so the way i look at it is i'm basically teeter-tottering on self-insuring right now i have the lowest amount of insurance i can possibly get on my place and just planning on if i ever do need to make significant repairs to my place i'm going to pay for it you know sure i'll make an insurance claim and take whatever i can get but i'm not going to be waiting around for those bozos to give me a paycheck but also the reason to check your policy annually is to give your insurance agent a chance to shop around and see if there's a better deal out there because there's always insurance companies coming and going offering different types of policies and adding or taking away coverage in different areas so you never know what could be available for you the next year that's another problem that we have here in florida at least i have this problem i was forced to go on citizens insurance because no one else would insure me so i'm one of those floridians that's in that situation and of course it will make sense to check i'm going to be up for renewal soon so i will be checking to see if there's anything else available but the likelihood of anything coming up that's better or cheaper is probably slim to none but if you don't live oceanfront right here and susceptible to hurricanes and all of that you're probably going to have better luck than somebody like me i want to talk for a minute about real estate prices because this is pretty much the number one mistake that home sellers also make when it comes to selling their home and we just went over all the insurance mistakes but sellers typically may always make the same mistake and i've seen this happen a lot when i was selling houses and that number one mistake is that people tend to overprice the house and in a market like this where things are rapidly changing inventory is spiking in many areas homes are sitting on the market longer homes are sitting with price cuts you're not in the position as a home seller to overprice a house unless you are in an area where inventory is still short and houses are still selling over asking price then you can i found this interesting story about this person that wanted to sell their house and their realtor gave them a range that varied by about fifty thousand dollars so a fifty thousand dollar range say we can list it anywhere between 250 and 300 just making up a number and of course the seller always usually decides to go for the highest price the higher end of that price point because they think that their house is always worth more than their neighbor's house even if the comps prove otherwise so of course this person decides to go with the high end of the range and list the property high and it's crickets no buyers come through on top of that the house is in an HOA just like we talked about the other day and the HOA fees are $330 a month which is a lot for a house guys most HOA communities with houses are usually substantially less than that so you know that's a big turnoff for a buyer who's looking at buying a single family home because if you are going to buy an HOA there's a high probability you can find one for a better price than that you know most of them are like maybe 80 bucks a month or less depending on the amount of amenities they offer that's a huge turnoff for buyers then they said the market started to suddenly slow down as soon as they put the house on market for sale that's bad timing and they even tried to point out to the buyers like hey look even though the HOA fee is high it covers things like water trash and snow removal but people didn't care and this also harkens back to a point i made in my video the other day with my buddy Vincent anybody who saw that is HOA's are being created left and right to ensure that these type of burdens get passed on to the homeowners and guess what they still got to pay full property taxes and you got to pay this ridiculous HOA fee to have water to have your trash picked up it's crazy as soon as that listing goes live anytime you want to sell any type of property the first week that's the most crucial time of that listing that's when it's going to see the most exposure that's when all the real estate websites are going to push your listing and show it to the most potential buyers as possible and if you are not priced properly you are not going to get the attention that you're hoping for so what happened to this person they ended up dropping the price 25 grand after a couple weeks sitting on the market and they didn't have to sit for too long they sold the house in about a month but they still had to go through that price reduction and they would have saved some money by not having to make an additional mortgage payment pay more utilities and more HOA dues if they would have just listed the house properly the first time and who knows if you list it aggressively enough you could actually get multiple offers and get more than you even thought that you might but when you overprice a property not only is it a turnoff to potential buyers but it also eliminates certain buyers right like a lot of people filter through listings based on a certain price point so if you have somebody looking for houses say up to 315,000 right but your house is 330,000 but it should be 315 all those buyers in that range are not going to see that listing so it's definitely something to consider when you're listing a house for sale in this ever-changing real estate landscape now let's talk about rentals for a little bit because this is something we haven't talked about in a while and it turns out that more and more of a bunch of these empty rentals across the country are slowly but surely starting to fill up they say that the demand for apartments has actually increased to its highest level since 2021 we've had 1.2 million new apartments built over the last two years and the demand for these places is finally slowly creeping up and they say if it keeps going in this direction then we may even see rent prices go up slightly in 2025 i don't know if you guys notice this or not but i certainly do usually in the past when i would do these beach videos i would be like huffing and puffing by now and really be out of breath but because of all of the hikes i was doing in california like getting into amazing physical condition from doing that which is obviously a lot harder than walking on the beach not out of breath it's pretty incredible quick side note people ask you know why do i go to california it's like well i'm escaping the crazy miami heat and i get into great physical condition there because i'm able to do things i just can't do here there's no mountains to climb in florida guys and where better to climb mountains than in a place when it's like in the 70s every day but so far the rents are still remaining relatively flat nationwide you're not seeing a big increase in the amount of rent that tenants are paying which i'll get to in a little bit like if it did go up it's just a very slight increase all the price increases when it comes to real estate for the most part whether you're looking at buying or renting are pretty much over you know we've kind of reached the peak of what can be asked for rents or selling prices and people just can't really pay more than what the current prices are according to some lease renewal data say that the average tenant was paying about a three and a half percent rent increase from august of 2023 to august of 2024 and they think the demand for rents is likely to go up the most in places where you're seeing a lot of return to the office mandates which makes a lot of sense and typically this is going to be mostly in coastal cities across the u.s so pretty much in the places where everyone tries to flock to these days miami including everybody comes to places like this everybody wants to live here and other places like it people come for the jobs they come for the lifestyle and honestly guys like i get it because i like it here too but at the same time if they're spending so much time away from here i've really come to appreciate different lifestyles and different ways of living that i may want to adopt myself in the future sure it has its perks living in places like this but the cost of living is not one of them so according to redfin the median us asking rent pretty much only went up 0.2 percent year over year and it's kind of stuck it's sitting right around 1600 a month right now 1619 per month to be exact and rents actually went down on a month over month basis 0.6 so it kind of fluctuates depending on the market and demand we still have a lot of units that haven't been built yet they say that we're still going to see another half a million units delivered you know over the next six months or so that aren't even completed so that's going to increase supply which tends to bring prices down for rents so i wouldn't be surprised if we see rents remain relatively flat for quite some time and of course here in florida there are places where supply is starting to outweigh demand like in tampa and jacksonville and even orlando those are the top three where the rents are coming down the most right now you have rents in tampa down eight and a half percent year over year jacksonville is down 8.4 percent year over year and orlando's down 4.4 percent year over year both of these places are above the national average except for jacksonville so when you look at it from that perspective jacksonville is the best bang for your buck by far in florida these days if you're a renter this shouldn't come as a shocker but the rent prices continue to go up in places like the midwest and the east coast because there's just less construction in these areas and the rents are going up pretty substantially in some of these areas in fact virginia beach virginia saw the largest rent increase of the 50 most populous metros in the country and it went up 11.7 percent year over year to about 16.50 a month but still even though it's a substantial increase it's in line with what the national average is so not insane you got other places like washington dc rents are up 11.1 percent year over year cleveland ohio's up 9.8 percent chicago's up 8.8 percent baltimore maryland's up eight and a half percent those are the biggest increases but you're also seeing big decreases in some places too raleigh north carolina for example they're down 8.8 percent year over year tampa which we already talked about is down eight and a half percent year over year austin texas is at 8.2 percent down and even san diego california is down six and a half percent year over another thing to note here is that rent prices per square foot have been falling for 18 consecutive months now so it's actually a really good time to be a renter right now and not the greatest time to be a buyer if you're looking for a new place to live because basically what this means is you're starting to be able to get a bigger and bigger place for a better value you're getting more square footage for the money these days compared to a couple of years ago when rents were spiking and there were shortages and this is all due to the amount of supply guys like this like we said earlier we had 1.2 million new units built over the past couple of years and some of them are still under construction they're not delivered yet you know about half a million of them are still yet to be on the market for rent so it's still a very good time to be a renter but of course they're predicting that these rental buildings are going to see a slowdown in building due to all the new supply that we got of course the pendulum can swing the other way eventually where we're in a shortage again and you see that rents start going back up because there's just not enough places for people to live one other thing i want to mention here is i saw this report from the national association of realtors about membership basically talking about how many real estate agents there are who are members of the nar okay and they said that as of today memberships sitting at about one and a half million as of the end of october which is very close to its all-time highs still so despite this major commission changes that we've seen happen in the industry we haven't seen nearly as many people drop out and leave the industry as we were thinking but actually the reason for this makes a lot of sense the nar says this is happening because inventories are rising and more real estate agents are busy putting up signs and preparing for a sale which is actually true the inventory numbers have been increasing pretty substantially almost everywhere and now that more and more people are getting realistic about the fact that home prices are going to be kind of stuck where they're at or even going down in most places and waiting for interest rates to come down is a loser's game right now you might as well just sell or you have other people that need to sell because they can't afford their hoa dues they can't afford their insurance or taxes anymore whatever situation they may be in they also note here which is kind of a temporary blip i would say that pending contracts went up 7.4 percent in september but we did see interest rates come down pretty much a whole percentage point over the past couple of months until the first fed rate cut when it spiked back up to where it was before so when interest rates got down to about six percent for a 30-year mortgage for a good credit borrower that's probably the uptick in contract signings that we saw right there but interestingly enough the nar still predicts that they're going to see an eight percent decline in real estate agents in 2025 bringing them down from one and a half million down to 1.4 million members but one thing i will say as somebody who's seen all different walks of life in this business is that just because membership hasn't gone down doesn't mean people aren't quitting guys because all you have to really pay to remain a real estate agent or a member of the nar is to pay your yearly dues and depending on where you live and which association you belong to that can be a different amount like here in miami it's quite expensive you know all in all i think i showed you guys what it was in 2024 it was probably like 750 close to 800 but that's it that keeps me part of the national association of realtors even though i don't personally sell houses anymore so i'm actually part of this statistic so technically i have quit and i'm not working as an agent anymore but i'm still on the books as if i am you know and that's what they look at and a lot of people do this part-time they have gig work they have other jobs they have husbands or spouses that pay all the bills and whatever they make is just gravy so but i will say that once we really fall on some tougher economic times you'll probably see these numbers continue to drop mainly because a lot of those people will no longer be able to afford to pay those dues at least that's my guess so i hope you guys enjoyed being back out on the beach i know i sure am happy to be out here and if you enjoyed this video make sure you subscribe to the channel and if you don't want to wait for my next video to come out check out this one on the screen right over here and i'll see you in the next one