B2B: The Premium on Insurance Premiums


Stacy: Is this thing on?

Erin: Yes. Hi, I’m Erin Spencer.

Stacy: And I’m Stacy Smith.

Erin: And this is between two brokers a podcast about real estate, business and life.

Stacy: Hello, everyone, and welcome to another episode of between two brokers. Today we have insurance guru Mandy Davis with Anderson insurance here to tell us all about what the heck, all the Deco’s is happening in the insurance. And I’m sorry, if you haven’t looked at your bill, but mine went up 30% or something like that this year? Mandate tell us what is happening. Why?

Mandy: Well, the good news is, it’s happening to everyone. So you’re not alone. Everyday, I get a phone call from somebody who has opened their bill or got a notice from the bank that their escrow has changed and want to know what’s happening. So really, worldwide, but nationwide. For US insurance rates have gone up for everyone. And it’s due to just catastrophic loss. When you think about the last six or seven years insurance companies are not here to lose money. So when they’re paying out major claims. There’s the freeze in Texas, California burned all the storms in Florida and Texas and the Gulf. We’ve had several here that weren’t major hurricanes, but there was a lot of major flooding issues we’ve had, there’s been a lot of homes that are just underinsured, that drastic cost of construction that occurred through COVID, where, you know, builders were at $300 a square foot and now they’re at $800 a square foot, there’s a lot of homes that were underinsured, then they suffered a loss and the insurance companies had to pay the cost to rebuild the house. And so it’s just that everybody filed, all the insurance companies filed for a higher rate, they can’t just make up a price, they have to file a rate get it approved. And everybody nationwide, all the companies either filed for a higher rate or just got out of the market, they just won’t write coastal exposure that that seems like a really terrible idea.

Stacy: Two questions, what are the big companies that aren’t writing in Charleston that maybe used to or coastal areas, and then the other thing that you just mentioned was? Okay, so when you get insurance, this is something that comes up all the time we have and sometimes insurance agents, maybe that are newer or something are asking us about what replacement costs is okay? Can you explain replacement cost, and then you just said, so let’s say you have a replacement cost of like $300 a square foot just for the sake of an example. But to rebuild is $800 a square foot, you’re telling me the insurance company pays the whole $800 a square foot to rebuild?

Mandy: Maybe not quite all the way up. But there’s indoor, well, if you have a good insurance policy, there are endorsements that sort of create a little bit of a buffer one’s called extended replacement costs, which is an additional 25% of the stated dwelling amount that they would pay out to build your house back the way it was. So if you’re at 300, then you get another 25%. And then if there’s building codes that like you now have to have impact glass or your railings have to be tighter, or your doors have to be wider, that’s new building code, there’s another 10% they’d have to pay out to meet building code. So you know, you you have the stated value, which might be low, but they’re paying out on these other things, which they didn’t really intend to. And so they’re, they’re not necessarily… some policies have a 50% extended replacement cost. So you’re getting 50%. So you get another 150 plus the 10. So they’re out a lot of money. And then there’s the loss of use coverage, which would pay for you to stay somewhere else. Well, if you live in, you know, middle America, or even Columbia or Greenville, you can probably rent an apartment for five or $600. A bedroom. Where’s Charleston, it’s $1,200 are fit. I mean, just the cost of all of it, in Charleston, in particular, is high. And so they paid out a lot more money than they intended to.

Stacy: So how do you determine replacement cost when I send you a client?

Mandy: There’s a couple ways and of course, mortgage lenders also were like, we need the replacement cost estimator. I’m not an appraiser. I’m not a builder. I don’t buy a building  and so I’m like why are y’all asking insurance agents but in general on an insurance policy, we’re not insuring the land, we’re insuring the home. And the idea is what would it cost to rebuild that house. So if it’s a new build, we have a really great idea. If it’s an older home, but you’ve got an appraisal, sometimes on that second or third page, there’s like an Excel spreadsheet-looking section that talks about cost to build. That guy was in the house, he looked at the crown, he looked at the finishes, he took those things, or she took those into account. So that can sometimes be, you know, a guide. And then there’s software that is used as a replacement cost estimator, but they’re based on national numbers, and they’re really manipulative. So you can kind of I was like, I can make this thing, say, I can say, this kitchen’s builder grade, and it’s not to get the number down. And so, you know, we’re but again, it’s not going to match your purchase price, because your purchase price includes the land and the location and the amenities in the area. So it’s what would it cost to rebuild the house? And in some of it’s a guessing game? I mean, we try to use the pieces and we try to have conversations. I mean, we talked to builders on Kiawah, Sullivan’s Island and say, What are y’all seeing, like, you know, and they’re like, I’m not even gonna start a house for under 1000 square feet. When you don’t want to find it, I had a client who had a huge loss, total loss, fire loss. And they were not with us at the time they are now but the current policy they had, they were totally underinsured, and they couldn’t afford to build the house back. So and then cost to build was so high, they just had to buy a whole different house, instead of rebuilding where they were. Because costs were so high, and they were so underinsured. And that was sort of the company’s fault, because they were grossly under insured, and nobody told them.

Stacy: So I am certain that I’m under-insured, and I’m gonna have you take a look at my policy ASAP.

Erin: So when someone buys a house for a million dollars, inflated market, whatever, how are are you valuing it?

Mandy: We typically do it by square feet. So I mean, you can pay a million dollars for a teeny tiny house on Sullivans or, you can pay a million dollars for a mansion in Ravenel.. So it’s, again, back to what are the builders in that area, charging $400 a square foot times the square footage of the home, sometimes, you know, you do that math, and you go Wait, that’s like almost the whole purchase price. But land is cheap in Ravenel land is not cheap on Sullivans Island. And sometimes people even in a new build you go, you sort of overbuilt, I mean, the finishes you’ve put in there. So it’s almost the whole purchase price, even though the land is so valuable because you paid $1,200 a square to build. So we’d kind of have a conversation with the purchaser as well. And then you can kind of look at county record, like what are what are lots selling for? I mean, we tried to do some comparison, the software does some of that. And then really realtors and other people in the industry have a feel for what those numbers sort of look like?

Erin: And is replacement cost the biggest factor in the premium? 

Mandy: Yes, it’s what’s driving it for the most part. Other structures, which again, is property, like if you have a pool house, that’s a piece of it, contents to a lesser extent. And then sometimes people go well, liability is on here, and it’s at $500,000. What if we make it $300,000 and it will save you $8? Like that’s not driving your premium. And then different companies rate deductibles. So people will say what if I get a higher deductible, which means you’re self insuring more you’re willing to pay out $5,000 before insurance gives you any money. How much does that buy the rate down. And for some companies, it can be significant, you know, maybe six or $700. For some companies, it’s like $85, I’m like, well, that’s stupid to double your out of pocket to save $85 a year. That math just doesn’t work. And then coastal properties all for the most part now. We had a couple of fluky companies, which we are super excited about that did a flat deductible where your deductible was what it was regardless of what caused the damage, whether it was wind or a fire or pipes in your house. But now almost every company’s back to a separate wind deductible. So if wind causes the damage, you pay this higher deductible. And they’re sort of some tears to different wind deductibles, but jacking those up again can bring the premium down because the more you’re willing to pay out of pocket and self insure if you’re going to pay the first $50,000 yourself the insurance company saying okay, well. We’ll collect a little less premium.

Erin: Other things that bring your premium down, like you know if somebody’s going to replace their roof, do they need to like reach out and say, hey Mandy, we replaced that 20 year old roof you know, can we rebrand my insurance policy?

Mandy: Absolutely. Any improvements that you do to the house can get the rate down it can also open you up to other ooptions becayse, you know, we may have had to pick a company that would allow a roof over 15 years because that’s what you had. But now you have a new roof. So we can go back to a larger range of companies, because if you have a new roof, like everybody loves a new roof. And the idea is that it’s the envelope of the house, if the roof goes, so does everything inside pretty much all your contents, all your interior, so they care a lot. There’s a company that writes a lot in Charleston County, and they really care about the water heater. I mean, I get it if it’s old, and it’s in your attic. And it busts that, you know, but it could be in your garage. And what’s it flooding, nothing, but they still care about the water heater. So for real estate agents, I feel like we quiz y’all down a lot about well, what about this? And what about this? What about this, and we’re trying to get their rate down. And there’s things called Wind mitigation forms, that can be really important, because it’ll tell us that there’s hurricane impact glass, or that their shutters are opening protection on all the windows. Or that the water heater is new, or the roof is new. And all these add on features that you have a whole house generator. Because you get credits for all those things. And so it’s always important to let your agent know big things. Oh, I added a pool, because you have a whole different liability issue. Or that I replaced the roof or made other upgrades.

Erin: Let’s talk about pools. All right. What does that do to an insurance policy? Because I’m especially the more people that move here with money. I’m saying like pools are a big thing. Yeah, I didn’t grow up with pools. You know, like we were all broke back in the 80s. So people to have like a private pool is a big was a big deal right now. It’s like if you don’t have any pool? 

Mandy:Yeah, yeah. Strangely, you pay a little bit more in I mean, every company varies, but not maybe $100 more for the liability piece. I mean, you have a slip and fall exposure, they call it an attractive nuisance, like a trampoline. I mean, everybody in the neighbor want to get in it or come over or you look like fun. So now people you didn’t even want to talk to you are now in your backyard. 

Stacy: Can you even install a diving board anymore? 

Mandy: I don’t think so. I mean  companies will do it, they’ll build you a rock flooring, jump off the top, if you want to but insurance companies don’t like it. And then they want it to be fenced, you know, again, so that the neighbor’s kid doesn’t just end up in your pool, and nobody knew it. So they really want it to be fenced. And a lot of the pool companies offered these, you know, the automatic close, and you have to have a code to make it open. And those are great. I mean, I think, but it’s based on the homeowner to remember to close it which in my house doesn’t happen, you know, because it looks better open who wants to look out at that plastic covered pool. And so in short, I think pool people will say, Oh, this meets the requirement, but for most insurance companies, it doesn’t, because it’s user error. So it only works when it’s closed.

Erin: $100 That’s it?

 Mandy:The liability piece and then you add the other structures coverage, because right now, if you just have a fence in your yard, your other structures coverage might be $5,000. But now you need $80,000 more for the pool, or anything in your yard not permanently attached to your house. So if you do a pool house or a pergola or anything, a hardscape all that would be added to the other structures covered so the premium goes up for that reason, but there’s no big financial punishment premium.

Erin: Another thing I’ve noticed when I’m filling out insurance forms is they ask about your dogs.

Mandy:Yes.Either they bite or I don’t know what but everyone who has those dogs says it’s all a lie. But yeah, there are, you know, the dog pitbulls, maybe German Shepherds, Dobermans, Rottweilers, again, the people have this dogs like they’re way nicer than my neighbors’ chihuahua that bites everybody. And then some of it I think might be more not even just the bite thing, but that if that Rottweiler like jumps on you, and I fall down the steps, your homeowners policy is paying, you’re liable for the damage that occurred on your premises, and that insurance companies pay out for that. So yeah, dogs, trampolines, railings –  we have these things all the time. For example, those three steps into your house and you don’t have a railing. Well, it meets code. The builder didn’t have to put it on there and the house got signed off on but the insurance company cares. Well the insurance company doesn’t care about your code. They just don’t want the old person to fall into the bushes and they gotta pay out because there’s a big liability piece people don’t realize to insure it. But even if your kid goes down the street and throws rocks in the neighbor’s window, your homeowner’s policy will pay to repair those people’s window. Because you’re a household member that is liable for the damage you caused. 

Stacy: So are you looking at photos and MLS and MLS listings? You get a lot of this information?

Mandy:Yes. Zillow, and all those things online have been super help because they can see the inside of a house. Again, I don’t know what materials specifically cost. But I can tell the difference from builder grade, and custom. And that’s a different price point. And then you look at the purchase price. And then you can look at the county record and see what I mean. Of course, everybody tries to get their, their taxes as low as possible. So they’re like, yeah, the county thinks my house is worth more dollars. And it’s not. But the land piece, I think, can be pretty accurate. Sometimes the house piece I’ll like what they value your house at. But.

Stacy: I’m curious people that are moving here that are buying luxury properties? What are the top questions that you get from them? Because they you know, they’ve never bought a property in Charleston before? I’m sure you get it. I would assume you get different questions.

Mandy:Yes, well, they panic because they’ve never seen a premium that high and their whole life because they have a huge house, inland somewhere. And you know, they pay $3,000. And now I want 30 because it’s on the beach. Or they go well, I’ve always been with cholov or AIG, or pure, what we call high net worth carriers. And I want to stay with them. And I’m like, Well, you should probably call their headquarters because they’re not they’re either not riding on the coast or your home doesn’t meet their underwriting guidelines, some of its values, some of its upgrades. And so they’re like, Well, I’ve always been with them. And they, it’s the coast and it’s different. And then a lot of people say well, I’ve never even heard of the company proposed. Because the companies that everyone sees ads for or their they’ve always had travelers heart for Safe Co, Liberty Mutual all the ones all the characters, most of them will not write on the coast, or their underwriting guidelines. You know, the older homes don’t meet or the values too high, if it’s old, they don’t want it. If it’s super expensive, they don’t want it. If it’s near the beach, they don’t want it. If it’s on one Milan, where we have no fire suppression when we have no city water, we have no fire hydrant, they don’t want it. So you end up quoting a different company that people have never heard of this. And you want to say, well, it’s your only choice, we’ll come to this now. Paradise is extensive and weird. And here we are. So that I think is the most shocking part or you know, the USAA people are super loyal, which I get, but they’re out writing. And we’re an independent agent. So we represent a lot of companies. What we don’t represent our agent are companies that are called captive where they kind of only sell their own products. So State Farm, Farm Bureau, Allstate, USAA, GEICO that you can just buy online and call 800 number and get in the queue and and I don’t think GEICO right coastal property either. I never like come across something good. And so I think that’s the I think the premium is shocking, the separate wind deductible that we talked about can be shocking, because I’ve never seen that before. I mean, even in, you know, the upstate of South Carolina, you just pay 500 or $5,000 or $2,500. No matter what happens to your house down here, we want 2500. And then if it’s wind, it’s a percent. So if you’re in a million dollar house at 2% of a $20,000 deductible. So I think they’re shocked. 

Erin: So if you’re looking at like an aerial map of Charleston —  Is it like a rule where it’s just, you know, like so many feet off the coast is this zone or is it really have they like studied it and drawn specific lines? 

 Mandy:Yeah, right. Yeah. Some of it is ZIP Code driven. You know? 29451, which is the Beaches- So proximity to the ocean makes a big difference just for obvious reasons. The wind, the waves, the whole the harsh conditions, the whole thing. And when you look at there’s wind zone maps And it it delineates wind zone one which is pretty much the beaches, the actual coasts, so you know, go down like Isle of Palms, Sullivan’s, then you get Mount Pleasant. And then you get really the old village. I mean, it’s in the harbor, then you get the peninsula of Charleston and then you get Folly and Kiawah, and Seabrook and Edisto. So that’s kind of when zone one. And then back from the actual barrier island is when zone two, which is better in Mount Pleasant, it’s going north, the right side of 17. So like ion and all is not in a wind zone,

Stacy: the cheap side where I live, 

Mandy:yeah, yep, side, Daniel Island is inland, even though it’s on the water, it’s on inland water. And it’s Berkeley County, it’s not Charleston County, well, a lot of it. So that can be helpful. The rating is just different. Their statistical last and last, and Berkeley County is different than Charleston County. I mean, there was nothing really in Berkeley County, there was a value when you go here, so there’s no huge statistical loss, like driving the algorithms or whatever they do on the backside. And then people get irritated. This is a side note. But like, why do you need my birthday? Why do you need my social? And there’s internal rating on that? I mean, an erroneous, thrown in a million dollar house, their daddy bottom is a terrible idea. Yeah, I mean, liability wise, right? And do they even know what a leaking sink creating huge wood rot is? Or do they wait till they fall to the floor? So age, I mean, the older you are, can be an advantage, partly because you made it to 55. And you don’t have a huge loss on your record, which says you’ve kind of got it together, like you seem like a good risk. And then social security, we don’t see any kind of like credit score or anything like that. But it internally can change the tiers. And for some companies, it’s a bigger driver than for others. So sometimes I you know, we’ll get a rate back. Oh, my gosh, that seems crazy high. And I’ll say do you happen to like, know, your credit score? And they’ll either they’ll say yes, and tell me or they’ll say, uh, yeah. And then you like, I’m like, Okay, let me try a different company that might not be so credit score driven. Again, they feel like if you can remember to pay your bill, you can remember to call Terminix. You know, kind of thing that you’re, you got it a little more together. 

Stacy: And if you filed a claim as they look for that, I mean, when you plug in the social is that something that comes up to

 Mandy:It will that is more liability driven, like because you personally were liable for off your social, but the address will pull any property claims. And we can tell whether it was something weather related, which is totally well beyond your control. Or it’ll say like, you know, $18,000 water loss, and then I would ask you like, what happened? And they’ll say, Oh, my water heater exploded or?

Stacy: Okay, so that was a misconception I had, I thought that. So it’s claims that are related to the real estate, not past claims of the individual. Like if I filed an insurance claim and lived in another house, when my insurance of 

Mandy:If there was a property claim like you had a lightning strike here, and then you move somewhere else, sometimes it will show up and you’ll be like, Oh, that was my old house and said that’s not going to affect necessarily the rate on the new house. liability would if you got sued at your old house because everyone fell through the deck, then then that would carry forward but just like if you were buying a house that had had claims three years ago, I can say to the underwriter that was the previous owner that filed all those claims, because some people think it’s maintenance plan, right? They’re like, what about $1,000 deductible? I mean, how about know if it’s, if you have 1000 $1,100 pays your money, your showers leaking? Just fix. That’s the burden of homeownership. Yeah. Because you get into a claims frequency issue. I mean, again, the insurance company isn’t here to fix your maintenance problem. And so,

Erin: I had that situation in my neighborhood where I represented the sellers and they were frugal people. And anytime there was an issue, they filed a homeowner’s claim and I don’t think they thought about it again and then I’ve stayed in touch with the buyers because they’re my neighbors and they were like, they fucked us you know like getting quotes because they filed you know, three different times for these minor issues that they could have just picked them out of pocket and paid for and now our insurance is ridiculous and because like, Is there is there a expiration on that like

Mandy:Usually three to five years and being new owners I mean, that agent could public out. I mean, as much as everybody like wants to like plug it in online and get this like data entry answer a, a lot of times I just have to call an under and be like, wait a minute, these are not these are the old buyer, you know, the old owners. It’s not and all the repairs have been done. And these people have now done a ton of other repair, you know, upgrades or repairs or whatever, and sort of just hash it out when you can? Because it does it affects and the same with like auto claims, you know, you see that more like, Oh, my child bumped into somebody, should I file it? I’m like, you certainly can. I mean, you have insurance, you have the right to file it, but they’re a young driver, and how many other things are they bumping, so maybe, maybe wait, maybe save that and run. But there are some companies, I feel like I see it more with like captives, because you’re calling a one 800 number or just like, and the or you call, you know, like a State Farm, they have to log it in that you called in. So sometimes people are really doing an inquiry, like, should I file this claim, and now they’ve logged it, and then you’ll see it three years later, they’re still zero payout. And like you should be able to call and ask a question, but I see it a lot for like this captives. Because I think whoever answers the phone isn’t really the agent. And they’re logging the call. And I’m like, they’re like, we never even did anything. Like we fixed it. We didn’t follow through with the claim amount. Well, it’s sitting out there open. And then you got to get a letter that it’s closed. And it should be like for major stuff.

Erin: So since South Carolina switched to an all due diligence contract, I’ve really been having all of my buyers get their insurance quotes before due diligence is up. So when we send you somebody, and we’re like, we’re under contract, how long? How many days does it take for you to get them like a pretty accurate quote on what their policy is going to run them?

Mandy:So our goal is within two days, I mean, if it’s something like their due diligence is running out, like we need to answer it, I can push it to the top of the pile, and we have an advantage in our office, we have a whole new business department. So it’s not just me sitting there, and I can’t, you know, get it out. Flood is pretty quick. It’s cut and dry. Homeowners, their turnaround time has gotten longer, depending on specially if it’s a home over a million and a half or 2 million, because it does get a different tier of company. They really underwrite it, and it’s a lot of back and forth. And well, what’s this claim? And why did they live there? And do they still have this car? And then because they can see, it’s amazing. Like, sometimes he’s like, I don’t wanna give him my birthday, my Social, I’m like, well, and like seven minutes, I could probably find it. So I don’t know what you know, like, I’m worried about my security, like, I am a nobody, and I can find it. So yeah, you shouldn’t be worried about it. But you’re not really you’re all you’re doing is slow in the train to help you. Help me help you. Um, and so that’s our goal. But of course, I mean, I have agents who like, like, Well, I gotta know, holy cow, they didn’t do it. And this contracts about to explode, help me or do something. And then rates are so high and people’s, you know, I hear it from lenders, their numbers are so tight. It’s like, what can we do? And what they want me to do is strip the coverage out, and then add it later to get the premium down, which I don’t like doing. Because one, those people never add it back. And then when there’s a loss on the jerk, you know, who didn’t tell them? And I’m like, well, there’s 74 emails back and forth, where I basically said, I did it right. You made me undo it here. It is undone. Have a nice day. But yeah. Yeah, so we see that a lot.

Erin: Okay. So I want everybody to stay tuned for part two of our time with Mandy, which we’re going to talk about flood and earthquake and other natural disasters. But you said something when you came to our office once you were explaining how an umbrella policy works, so can you tell the people about that and why they’re important. 

Mandy:Yeah. So ideally, if you have assets of any value, which if you own a home, you have an asset of value, you may want to get an umbrella policy. And the idea is literally that it sits on top of your underlying policies, but it’s for liability only. So most homeowners policies have 500,000 liability. If your debt collapses with 17 people on it and we all go to the hospital 500,000 might not cut it because when my child is paralyzed, I’m coming after you. And so the umbrella would sit on top of that the homeowners would pay out 500,000 Then the umbrella would pay out another million or another 2 million or another 3 million. You buy what you can afford and you buy what covers your assets. If you are in a $6 million house, a $1 million umbrella is not enough. A lawyer is not going to sue somebody who has like owns nothing rides their bicycle what like what are you going to get there’s no reason to see but if you have a nice house and some cars and another house and a boat like I’m coming and so you want the umbrella to protect that. It also sits over all your other underlying policies. So if you were an auto wreck, your auto policy would pay out its limit, and then the umbrella would sit on top. State minimum limits are so low that they’re scary. It’s 25,000. I mean, you could just hit the mailbox and a Tesla and have 25, though, you know, I mean, one air one, you know, a relevant tried could be $20,000. Like, I don’t know, anyway, they let you get away with that. So mostly, we’ll have higher limits, we only write higher limits. Because everything costs more than $25,000. And so, but the umbrella would then sit on top of that, too, if you hit a minivan with a bunch of kids in it, or a school bus or any of those things. Same, it would sit on top of your boat, it would sit on top of your golf cart policy, which, you know, we see a lot of, you know, people let their eight year old drive their golf cart on a public street. Good luck. I mean, it’s a disaster waiting to happen. And so yeah, so it sits on top of it just gives you an added layer. And it’s inexpensive. In reality, for a million dollars in coverage, it might be three or $400, which, you know, is nice when you need it. And people need it in weird ways. 

Erin: I’ve had a lot of clients in the last like year or two, especially that want to buy a big renovation and do their own design. And we’ve come across polybutylene plumbing. Yep. And you’ll talk to some contractors who are like, they make such a big stink about it. It’s not a big deal. It’s been there for 30 years, if it was going to fail, it would have happened already. And then some people were like, oh, no, you can’t get insurance policies on it, it has to be replaced. Do you you have an opinion on this? 

Mandy:Yeah, a lot of companies have a huge issue with it part. And they was when it was installed in a certain time period. And I can’t remember the years and it’s not the actual pipe, it’s the fitting, the fittings exploded, which flooded the whole house. So I mean, if I was an insurance company, I’d like thank, you know, just get it out and get it replaced. Some people will replace the fittings. And then there’s like people on one law who because they’re on a well, it eats just any fitting and they’re replacing their fittings every you know, eight or 10 years for the same reason. We saw it in Edisto. I can’t remember which storm it was. But though, the whole water system on the Edisto got shut down, and then when they turned it back on it busted all the fittings. So I get that some contractors like those stuffs been fine. Well, asbestos was fine also till it wasn’t. So I mean, most insurance companies will not take it.

Erin: But if they replace the fitting instead of all of the pipes, 

Mandy:I mean, ideally, they want it all reno and it’s you know, 30 year old plumbing at this point, it’s probably if you’re doing a big reno do it. And then also, if you do a really big reno, like a gut down to the studs, replace everything that plumbing, the electrical, all of that we a lot of companies will allow us to establish the year built as 2023 instead of 1985. If you can prove that you replaced all of it, which, you know, a lot of people are doing that mean they’re doing it in the Old Village, they’re doing it downtown. They’re they’re mean they’re doing it. So if you have the documentation, it changes the rate because now you’re getting a new home rate with new building code, everything. The only catch on the peninsula is the VAR will not let you replace the original historic windows. So they’ve got it, they’ve redone everything, but the windows are not new, and the companies will just stand on it. They’re like, Oh, you can’t make it. 2023 because the windows.

Stacy: Well, speaking of downtown, one last thing I remember when you came to our office tell us the craziest premium increase that you have seen in the past year.

Mandy:I mean, I’ve seen a lot of this historic homes, you know, historically they were, they were paying a lot because the value is a lot, but they were paying 9000 Then they were paying 12 And then they were paying 18. And then they were sort of in the 20s. And now they’re in the 80s

Stacy: Oh my gosh.

Mandy:So you’ve got a family home that you’ve been in forever, but you’re 65 and you know, you got to make a choice. Can you come up with 80,000? I mean, maybe I don’t know, if you’ve been living in the free house you got for 50 years, maybe come up with 80,000 or you want to come up with 80,000. But there’s it’s the first time I’ve ever seen people start to make this decision of backing the wind coverage out because it’s the wind piece that’s expensive. That’s the exposure. We’re on the coast, you’re in an older home, you’re on the battery, you’re on the front of Sullivans. That’s what’s driving their premium so you you basically could buy what’s called a fire policy, you know, it covers fire and pipes in the house and all those things, you know, for I’m just spitballing but you know, maybe $18,000. It’s the wind piece that’s costing you 50. And so they’ll say, Well, I guess I’ll just self insure the wind exposure, which to me, I feel like my house is gonna blow away before it catches on fire. But it’s just a financial choice you have to make and if you don’t have a mortgage, you can make it. If you have a mortgage, you can self insure the whole thing. You know, people go, I’m just I’m just ridiculous. I’m just gonna pay my house off. I’m like, okay. Okay, you should have paid it off on the front end. Anyway, cuz now if there’s damage to it, it’s on you don’t. There’s nobody to call so. Can you not only pay your mortgage off? But can you come up with another million and a half just to get a new house?

Stacy: Yes. Which supports my theory that people are just nuts.

Mandy:Yeah, they are nuts. The only piece about self insuring that really makes me nervous is I think everyone should buy at least a liability policy. You might have 6 million in the bank and can rebuild your house, but my child gets injured or dies at your house in your pool. You have no idea how much I’m coming after you for like you might not have that much.

Stacy: Hope you’re scared, everyone. And if you are, call Mandy Davis with Anderson Insurance, Mandy, tell everybody where they can find you. 

Mandy:yeah, so my email is and then my office number is 843-725-6798.

Stacy: And she’s excellent. Let me tell you she has taken such good care of my clients since I started working with her recently. 

Mandy:Hopefully, if you understand what the policy covers paying the premium feels a little better.

 Stacy: Yeah, I have no idea what my policy covers. I’m sending it to you ASAP. Thank you so much for tuning in. Guys. Don’t forget to rate review and subscribe. Tell everyone you know all of the things that you learned and tell them to subscribe to the podcast too. You can find this @betweentwobrokers and @SmithSpencerrealestate on Instagram and we will see you next time.


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