Bryan Vogt: Welcome back to Ready Set Sold. I’m your host, Bryan Vogt. We’ll be talking insurance today. Quite frankly, I’ve been doing real estate for a very long time, but it’s always great to talk to a real professional that has been doing this for some time because I can always learn some things myself and hopefully I know the listeners are doing well with it also.
In the second segment we talked about the importance of trust when choosing an insurance agent. The segment just before this one, we talked about the need to start shopping for insurance. It’s always a great idea with, after you’ve sold your home or even right before you’re selling your home to just double check to make sure that the insurance you have, it not only covers you in your new house, but you’re not missing anything that you might need in a new house.
Again, social media, things have changed as far as coverage goes in today’s market. And maybe it’s only been three years, but it might be time to shop out your insurance. With that part of it done, what I want to really get into is kind of a piggy back on that is don’t wait until the last minute to get your house insurance. And I can kind of give you some of my insights to that.
We’ve been at closings and 24 hours before that, the home buyer has not gotten insurance and hasn’t even started the process. Now, I know they’re supposed to by the agreement that they signed, get it within the first 7 to 10 days, but it doesn’t always work out that way. And that creates serious problems, not only for the buyers of course, but also if you’re the selling side that’s a problem, but as you sell your house and you’re sitting at the closing table it can have the same effect on both sides and that is a delayed closing.
Our closing gets pushed back as much as a week. We’ve seen actually some go a little bit longer, but it was just some concerns on the insurance and what exactly they needed. It was just not something you want to do. And, Joe, what is a good timeline? I’m speaking with Joe Harnist, the president of Harnist Insurance Company. Just a friendly reminder that what is important timeline that sellers should know, buyers should know when it comes to insurance?
Joe Harnist: Well Bryan, I think a good rule of thumb is three to four weeks in advance of a closing date. That way you have the time to review to coverages. We can get the estimated premium to the title company so that they can figure it in for the closing cost if you’re going to pay your premium at closing.
It gives us the time to really look at the property and make sure that there’s no issues. You don’t want to run into situations where there’s been prior water damage or sewer backup in the home that you’re buying. The company that you’re going to may say “Well, we see in a claims report that you’ve had water damage or that house has had water damage. We may need some proof that that’s all been taken care of and remediated and everything else.” So, that could push the timeline back too.
So, I always like to be out as far in front of a closing date in putting a homeowner’s proposal together and getting premiums together as possible, so that you don’t run into those problems and you don’t get down to the last minute. And it just creates a lot of problems for everybody all the way around, the realtor, thetitle company, the bank.
Bryan Vogt: Sure. Yeah, I love what you said there, and I think, again, in the agreement it mentions that. In the agreement it actually gives you 10 days to acquire it. So, that three week window is a good window to shoot for when you’re looking for insurance. It does give you plenty of time. One thing I do want to point out though because sometimes people will talk to me and they say “Well, this is going to happen to me or not going to happen to me.”
Look, 99% of the time insurance is going to work out just fine. You’re not going to have those issues that Joe described, but boy when you do, that can create some serious problems and some headaches that you really don’t want to go through. So, really what Joe’s talking about is getting ahead of it. Just knowing the information that you need to have so you can make decisions accordingly. 90-95% if the time there’s not going to be any serious problems with the house.
All is good, but that three to four to maybe five percent of the time, that’s what we’re really talking about here and that’s why getting ahead of the game can be so critical. The other thing, I like what you said too Joe is the in depth-ness that you guys do of really taking the time to make sure that what the home seller is, well this case the buyer who sold their home now and they’re buying a home, make sure that they really, that you both have a great understanding of what exactly they’re purchasing and the insurance they’re going to need.
Joe Harnist: Yeah, Bryan. I mean, we like to put all the options on the table and then we can discuss each of the options and then it’s up to you as the client, as the insured, to pick what you want. If you don’t want a particular coverage, we can take that out of there, but we like to show you all available options and explain to you what they provide and how they protect you going forward. And then it’s your choice and, obviously, picking things like whether you want earthquake or whether you want mine subsidence or flood insurance.
You know, those are all different things that are options that you can or cannot take. And, obviously, if you don’t take them it’s going to save you money. If you do, it’d going to cost you a little bit more, but we like to lay it all out on the table and let you decide after you understand the importance of each of those types of coverage.
Bryan Vogt: Yeah. And that’s so true. I just had a buyer complaining about exactly what you said. Now, these were local agents. So, I want to stress this. This wasn’t an online company. There were both local agents and what it amounted to was is they sent out a bug proposal and the buyer looked at it and the numbers were off. They had no idea what they were looking at.
They didn’t know the coverage, they didn’t understand why the prices were different, and it was just pick and choose. And it was very frustrating for them. And they didn’t really know what direction to go and that’s when we’re talking about the importance of sitting down, talking with somebody, having a conversation. It could be a 10 minute conversation. It doesn’t have to be necessarily drawn out. Right Joe?
I mean, it just might be a situation of something very simple, but easily explained.
Joe Harnist: Right, right.
Joe Harnist: There are things that are basic in a policy, but it’s the ones that aren’t basic and aren’t included that you have to look at and understand in the process.
Bryan Vogt: Awesome. Awesome. Hey, thanks so much for spending some time with us Joe. I really do appreciate it. I know the listeners will too. Again, I’ve been talking with Joe Harnist, the president of Harnist Insurance Company. And we’re going to be going to our last segment. We’re going to have a special announcement about a fundraising even that I would love everyone to get involved with.
Ready Set Sold with Bryan Vogt #24-04: Joe Harnist of Harnist Insurance and Pat Vecchio of The Violence Prevention Center of Southwestern Illinois: Why buyers need to get insurance sooner rather than later
November 4, 2017