Latest / Open The Gate / Ep. 18: Wes Finkemeier - Unlocking the Secrets of California's Insurance

Transcript

Ep. 18: Wes Finkemeier - Unlocking the Secrets of California's Insurance · Open The Gate

• 0:20
  Speaker 1: Good morning Dan.
• 0:20
  Speaker 1: Hey buddy, how are you?
• 0:21
  Speaker 1: I know how you are, Tell everybody else.
• 0:25
  Speaker 2: I'm sore.
• 0:25
  Speaker 2: I feel like this is what 60 might feel like, but I'm here and I'm bright-eyed and bushy-tailed and I feel great about it.
• 0:35
  Speaker 1: You look like it's Friday.
• 0:35
  Speaker 1: So Dan and I played a little basketball last night, a little kind of Thursday game.
• 0:40
  Speaker 1: I played with some dudes and it was a beautiful night, super fun outdoors.
• 0:45
  Speaker 1: But I gotta be honest, I was.
• 0:46
  Speaker 1: I was hobbling to bed and I had some interesting noises coming down the stairs this morning.
• 0:51
  Speaker 2: So yeah, my two takeaways from last night.
• 0:53
  Speaker 2: One, the confirmation of your competitive nature is validated.
• 0:56
  Speaker 2: And, uh, you and I have another thing in common we uh we can't shoot three pointers.
• 1:02
  Speaker 2: No, you made a couple Um, but uh, you and I actually have probably too small a feet for the size of our frames, exactly Right, and what's?
• 1:13
  Speaker 1: I shoot you, or I'm 11 as well.
• 1:15
  Speaker 1: Yeah, I'm 11 and a half.
• 1:16
  Speaker 1: And what are you?
• 1:17
  Speaker 1: Six, three, yeah, yeah.
• 1:18
  Speaker 1: So I feel like we don't have a good enough platform to really stand on there.
• 1:22
  Speaker 2: That's why my balance is so in question at all times.
• 1:24
  Speaker 1: For those of you who don't know, though, dan was a pretty good baseball player, but I gotta be honest, I was a little surprised out there.
• 1:29
  Speaker 1: You were pretty good Hooper, took it to the hole a few times, played the post well.
• 1:33
  Speaker 2: You know I did the benefits of growing up in a small town.
• 1:36
  Speaker 1: Yeah, I was.
• 1:37
  Speaker 2: I was certainly not the greatest of athletes, but I was a pretty decent athlete.
• 1:41
  Speaker 2: So in a small town, when my high school had 800 people on campus the year I graduated not my graduating class on campus Um, so yeah, football, baseball, basketball the expectation was, if you were an athlete, you play them all yeah and Dan cheered a little bit too, actually, so yeah, he was a stunt guy.
• 1:57
  Speaker 2: That was just an excuse to wear the spandex.
• 1:59
  Speaker 1: Yeah, I love it.
• 2:00
  Speaker 1: Well, I'm excited for today's episode.
• 2:02
  Speaker 1: A lot of times we get to kind of BS on here about a bunch of random stuff and have some cool guests on, but today we're going to be talking about A, one of our good friends, and then B about insurance and the state of California.
• 2:15
  Speaker 2: Such a hot topic right now and we're hoping to pull back some of the layers of the onion and really let Wes expose some of the things layers of the onion and uh, and really let, uh, let Wes expose some of the things and hopefully there'll be some takeaways where where people can talk with with their um, with their insurance provider, or reach out to Wes and um and get some questions answered and make sure that they've got the best fit for what for their needs are.
• 2:36
  Speaker 1: I think so too, because, uh, you know, even just pre show, here we're talking about a few things that are just not true, about what's going on in the insurance world, and if you're yawning right now being like, yeah, I don't want to hear about this, you know, a, go away, but B.
• 2:48
  Speaker 1: We actually did something kind of cool this week too, as Dan had posed on our Instagram question format where you could send in your questions, and we had some realtors quite a few actually send in some questions we're going to get answered.
• 2:58
  Speaker 1: So we're going to be going over all that, but before we do, we should bring out our guest.
• 3:04
  Speaker 1: So tell me a little bit about him, Dane.
• 3:06
  Speaker 2: So Finkmeyer Insurance Services, I think actually the time when you and I met Wes was at a real estate event and then we ended up getting out and playing around a golf and he kicked our asses.
• 3:17
  Speaker 1: Yeah, he kicked my butt for sure, but anybody can do that.
• 3:21
  Speaker 1: Well, let's bring him out here.
• 3:23
  Speaker 1: He's got one of the coolest intro songs there is by one of the greatest fans that exists.
• 3:27
  Speaker 2: So when we rank this thing out, his his intro song is going to rank high.
• 3:31
  Speaker 1: It's right on my list, for sure that never gets old dude I'm sitting here watching Blake with the volume controls and he wants to fade it out.
• 4:10
  Speaker 2: But, like no man, it's his banger, like we got to let that thing ride and you know, I mean I've been an ACDC fan since I was seven years old, going back to the mid-'80s.
• 4:21
  Speaker 1: It's awesome, they're great.
• 4:22
  Speaker 1: In fact, actually one of my proud, uh parenting moments is my daughter got to choose a walk-up song this year for softball.
• 4:28
  Speaker 1: All on her own she picked thunderstruck and I was like you know I messed up a lot of things as a dad, but I've done one thing right, so west welcome to the show dude.
• 4:36
  Speaker 3: Well, thank you for having me.
• 4:37
  Speaker 1: It's a, it's an honor to be here, yeah podcast virgin, just like many of ours right so welcome dude.
• 4:43
  Speaker 3: Yeah, I'm happy.
• 4:44
  Speaker 3: Like I said, I'm happy to be here.
• 4:46
  Speaker 3: I picked that song because one my dad has many phases in life.
• 4:52
  Speaker 3: One of them was boating, and so he would just be blaring that over the lake back in black.
• 4:59
  Speaker 3: And then, for some reason, I have this desire now that I'm 30 years old, but wishing that I could be coming out of like one of those posters, like in the basketball gym or football field when it's like duh, like the little hat.
• 5:12
  Speaker 3: And then you run through when the guitar comes in.
• 5:15
  Speaker 1: Yeah, I got the fog.
• 5:16
  Speaker 1: Flames and the fog.
• 5:17
  Speaker 3: Yeah, I was never good enough to do anything like that.
• 5:19
  Speaker 3: Uh play for high school sports but I did play golf.
• 5:22
  Speaker 3: That play for high school sports but I did play golf.
• 5:23
  Speaker 1: But they would not have allowed that on the golf course.
• 5:24
  Speaker 1: Yeah Well, we're going to find a real estate event where we can bring you out to answer some questions, like Ryan Lundquist, live golf tour man.
• 5:30
  Speaker 1: They're all about it.
• 5:30
  Speaker 2: You can even get to wear shorts over there.
• 5:32
  Speaker 2: I mean, I'm leaning in a little bit more lately, so so Wes, you are an insurance broker.
• 5:39
  Speaker 1: We're going to probably both butcher a lot of things today, so clean up our misconceptions.
• 5:45
  Speaker 1: Tell us a little bit about your role and what you do.
• 5:46
  Speaker 1: Finkmeyer Insurance Services.
• 5:48
  Speaker 3: Yeah, so I am what's called an independent agent.
• 5:52
  Speaker 3: So I partner with multiple companies, not a specific one like a captive agency, like a farmer's or state farm.
• 5:59
  Speaker 3: They can only write with those companies.
• 6:01
  Speaker 3: We write with dozens.
• 6:04
  Speaker 3: In this current marketplace, the options are more limited, but we do have options and are able to point people in the right direction and help them out in the best way we can.
• 6:14
  Speaker 1: So if somebody calls you, yeah, yeah, a broker, Some brokers charge fees.
• 6:18
  Speaker 3: We don't do any fees or anything like that, okay.
• 6:21
  Speaker 1: Awesome.
• 6:21
  Speaker 1: So yeah, I would just kind of like in the lending world too, right, you got your retail, uh, movement, mortgage or fairway no there's anything wrong with that, but you're basically shopping the one thing that they have, versus a broker model where you are basically out there searching for the best option for their specific situation and their specific property and then, especially right now, they're just a specificity of like what's happening month to month on certain properties.
• 6:46
  Speaker 1: We talked about that a little bit before the show.
• 6:47
  Speaker 1: So give us a 30,000 foot view of California insurance right now and do it in 20 seconds, going on for years, but I think the campfire really set it off.
• 7:03
  Speaker 3: Just companies are losing billions of dollars and the insurance commissioner in the state, or just the state, has made it really hard to keep up with the rates, the correct rates to charge, and they just can't keep up with the cost to rebuild and the risk that it is.
• 7:20
  Speaker 1: So let me ask you a little bit about that, because a lot of people don't know and, quite frankly, if I wasn't in the real estate industry I wouldn't know.
• 7:24
  Speaker 1: So what is the California State Insurance Commissioner?
• 7:27
  Speaker 1: Who is that and what is that role?
• 7:30
  Speaker 3: It's an elected position, it's a regulatory like they basically decide the rate approvals of all these companies can request rates.
• 7:41
  Speaker 3: They can't arbitrarily just increase your rates just on a whim.
• 7:45
  Speaker 3: They have to go through the state to get approval for that and provide the reasons why they need to increase their rates.
• 7:52
  Speaker 3: So it's just been he's been slow to increase them and that's one of the reasons why some of these companies have slowed down new business or stopped issuing new policies.
• 8:03
  Speaker 1: Because we hear about that all the time.
• 8:04
  Speaker 1: Right now, right Like our biggest audience here is realtors, and right now it's like, oh, it used to be, can we get the loan through, can we get them approved?
• 8:10
  Speaker 1: And now it's like can we even get insurance on the property?
• 8:12
  Speaker 1: So what is the incentive for them to, as an insurance commissioner, to slow that down?
• 8:17
  Speaker 1: Is that consumer protection, in a sense of not allowing companies to just hike rates a ton?
• 8:23
  Speaker 3: That's the I think that's the mindset of it.
• 8:26
  Speaker 3: It was always like, even on the auto insurance side, like he, the insurance commissioner, stopped increasing any company to increase rates for three years because of COVID was the excuse given just for consumer protection.
• 8:42
  Speaker 3: But it's also an elected position, so he's trying to keep his spot, I guess.
• 8:48
  Speaker 1: Yeah Well, I mean, if you knew anything about used cars during that time, you could buy a car and sell it six months later for five grand more.
• 8:55
  Speaker 1: So the prices of automobiles went up and then I would imagine the amount of accidents didn't go down.
• 8:59
  Speaker 1: So now does that mean the replacement costs went up?
• 9:03
  Speaker 3: Oh yeah, go down.
• 9:05
  Speaker 3: So now there is that mean like the replacement cost went up and oh yeah, so I on the auto side, yeah, before 2020, uh, they all would increase rates 6.9 around and then they stopped in 2020 and then, because of covid, they weren't allowed to and for the last three years they've had to charge the same rates, essentially since 2019 or beginning of 2020, but everything else has gone up tremendously.
• 9:25
  Speaker 3: So with that compounding we're like 25% behind, where we kind of were Exactly that's what insurance companies are increasing their rates 25 to 40% and it's I think it's the straw that's breaking the camel's back on a lot of people's budgets, because these rates are going up.
• 9:39
  Speaker 2: $200, $100 a month Well, yeah, and when you, when you add that on, add that in with, with, with the real estate world and and you know the insurance piece is such a big part of that, like Blake indicated.
• 9:51
  Speaker 2: But it's like man I mean we were dealing with.
• 9:52
  Speaker 2: You know interest rates that are at, you know, 10 year highs and, um, you know affordability and especially in our market, um, the cost of homes has, has has continued continued to climb.
• 10:02
  Speaker 2: There's just so many factors.
• 10:04
  Speaker 2: It's like man, so like when you really break this thing down and try and get granular.
• 10:09
  Speaker 2: Your hourly wages have gone up, your cost of goods, your cost of replacement material have gone up.
• 10:14
  Speaker 2: We've seen in our industry when lumber went crazy during COVID for a little while, we saw, you know fuel prices is one of our biggest line items, so it's wild.
• 10:23
  Speaker 2: You know it's funny because I was so glad when we got you to come on, because I mean I know I've sent you a couple tough texts.
• 10:29
  Speaker 2: I'm like dude, what is going on with my rates?
• 10:31
  Speaker 2: We've done nothing and they're just going crazy.
• 10:35
  Speaker 2: Now I will say shout out.
• 10:37
  Speaker 2: We did get a little decrease in our home.
• 10:39
  Speaker 1: Yeah, look at that people.
• 10:41
  Speaker 2: So not here to just we're not just here to beat you up all day west, but, um, but can you talk about some of that?
• 10:48
  Speaker 2: I mean because you know.
• 10:49
  Speaker 2: I mean I'm actually my car is in the shop right now getting the window replaced as we speak.
• 10:52
  Speaker 2: The windshield is like 1500, yes, and I've got a 500 deductible.
• 10:57
  Speaker 2: And my wife was like can you please?
• 10:59
  Speaker 2: And I'm like I'm so cheap, I just don't want to spend the 500 bucks.
• 11:01
  Speaker 2: It doesn't bother me that much, but I feel like that's it in a microcosm.
• 11:05
  Speaker 2: That glass itself is super expensive.
• 11:08
  Speaker 2: The calibration the shop has got to pay their hourly employees a super competitive wage to keep them around because there's so many factors that are pulling people away and trades people away.
• 11:18
  Speaker 2: Is that really it?
• 11:21
  Speaker 3: Yeah, is that really it.
• 11:22
  Speaker 3: Yeah, the auto side, any sort of even scratch on a bumper could be thousands of dollars to replace, repair.
• 11:29
  Speaker 3: Everybody's trying to get paid right.
• 11:31
  Speaker 3: So even on the construction, especially when they know insurance is paying, they're going to try to get as much money as possible, especially on water claims, for example, on home insurance.
• 11:47
  Speaker 3: I have yet to see a water claim less than $20,000, and it could be for a small area.
• 11:50
  Speaker 3: They have mold remediation specialists, leak detection.
• 11:52
  Speaker 3: They have to repair and reconstruct everything, and so everybody's trying to get as much money as possible if insurance is paying.
• 12:01
  Speaker 1: Yeah, well, that's, and it's just an expensive time in life right now.
• 12:05
  Speaker 1: I didn't, you know a couple of two dads sitting across from me here, man, it's just everything has gone up.
• 12:08
  Speaker 1: And so when you say the straw that broke the camel's back, it's like we, we went into this season where you know, if you're you've didn't, you own a business.
• 12:25
  Speaker 1: The costs to do business have gone up significantly, like dan said, and wages fuels, another big one for us just trying to, just trying to kind of stay afloat, and then at a certain point, you know again, once we come back to insurance, is you have to take care of your clients too, right, it's like you can't just pass on all of that to your clientele, otherwise then you're, you're looking at like losing there as well, even though everybody across the industry seems to be doing that.
• 12:46
  Speaker 2: Well then, factor in the.
• 12:47
  Speaker 2: Then factor in like um, like supply and demand um, and like the, the manipulation of that Right I, I I've said since since the onset of COVID, one of the biggest lessons that was learned by successful companies was stop overproducing.
• 13:00
  Speaker 2: That was learned by successful companies was stop overproducing.
• 13:03
  Speaker 2: Right, keep the demand high on your product.
• 13:07
  Speaker 2: You know, it's like everybody runs out of their product nowadays.
• 13:11
  Speaker 2: You're like, hold on a second, like there's a, there's a, what was it?
• 13:12
  Speaker 2: Prime energy drinks, for a little while Impossible to get and the kids just had to have them.
• 13:17
  Speaker 2: And I'm like this is a $5 fricking coconut water or $7 coconut water.
• 13:21
  Speaker 2: It tastes terrible.
• 13:21
  Speaker 2: My kids can't.
• 13:24
  Speaker 2: Like I mean, my son would not stop begging for like weeks.
• 13:26
  Speaker 2: Can we just go to target and get these?
• 13:27
  Speaker 2: And I'm like this is crazy.
• 13:28
  Speaker 2: And then you get there and they're sold out and you're like Gatorade has never sold out, you know.
• 13:33
  Speaker 2: But it's like some of these companies that have seemingly prescribed to that, keeping the demand high and doing a really great job of marketing their product now good, bad, ugly, indifferent.
• 13:43
  Speaker 2: Great job of marketing their product.
• 13:44
  Speaker 2: Now good, bad, ugly, indifferent, but it is kind of what it is.
• 13:47
  Speaker 3: Yeah, I will say there's um, even in the insurance market it's.
• 13:52
  Speaker 3: It's been harder because there's all these companies.
• 13:55
  Speaker 3: We used to have so many companies as as, as they leave the state, they non-renew all their policies in the state or state farm announced that they're non all those people have to go somewhere, and so the other insurance.
• 14:12
  Speaker 2: 70,000 people out there looking for a policy.
• 14:16
  Speaker 1: And that's not really optional right.
• 14:17
  Speaker 1: They have to have it, especially if they have a loan.
• 14:19
  Speaker 1: Exactly.
• 14:21
  Speaker 3: All the other insurance companies.
• 14:22
  Speaker 3: Their guidelines are trying to be very strict because they want to accept good business, and so some of these people have not maintained their houses, and so it's just like all these people are being funneled to the few that are riding, and it's they're not necessarily always good business, so it's just hard for people to find it when they need it.
• 14:42
  Speaker 1: Yeah, I mean, I remember my brother-in-law's insurance as well and we talked about like he's a farmer and he's like we're still riding.
• 14:48
  Speaker 1: I said, well, that's awesome man, like well, that's awesome man, like you're the, it's like a Forrest Gump when the hurricane comes and he's got the only shrimp boat in town.
• 14:54
  Speaker 1: Except for the fact that, like you just said, is all that business to service it and do a good job.
• 14:59
  Speaker 1: And you know, taking on 70,000 new clients at a time is even if all the business is great.
• 15:03
  Speaker 1: That'd be one thing, but you're talking about business.
• 15:05
  Speaker 1: That's not necessarily great.
• 15:07
  Speaker 1: Yeah, it's an avalanche and you're sifting through, and maybe because you're one of the only options you're having to, um, I'm sure people are getting shopped around more than they ever have to.
• 15:15
  Speaker 1: Yep, yeah.
• 15:16
  Speaker 1: So I would say, though, one of the questions used to be, like hey to a lender, or you know, probably just even two years ago I talked to my borrowers hey, get you know, get us an insurance quote that's bound from and you can shop around in this and that.
• 15:28
  Speaker 1: And now it's like just find one, let's, let's get a quote.
• 15:32
  Speaker 1: And honestly, like you and I have had a lot of discussions, one of the things I like about working with you is that we can ping you and say, hey, can you check out this property?
• 15:38
  Speaker 1: Like, because, especially some of the other changes that happen in real estate too, in terms of you know these new buyer, broker, compensation agreements and how things are going all of a sudden, you're looking at people that may have an issue qualifying, where, like, their income isn't poor, the house payment is kind of okay, but, uh, interest rates going up, and then the fact that man insurance can be the backbreaker.
• 15:59
  Speaker 1: I used to just use a hundred bucks, like it used to be the easiest part of my calculation.
• 16:03
  Speaker 1: I'm throwing a hundred bucks and we're good, and if it's super fancy maybe we'll put in one 50.
• 16:07
  Speaker 1: Well, that is not the case anymore.
• 16:10
  Speaker 1: And then the other thing I've noticed is that from a consumer standpoint maybe you can talk to this a little bit is it's really easy to be like, well, my house is in the neighborhood, like what the heck is up with that?
• 16:19
  Speaker 1: I don't live up in Tahoe, or you know, I'm not backed up to a big forest.
• 16:22
  Speaker 1: Um, so it's hard as a consumer, I think, to understand.
• 16:26
  Speaker 1: Why am I or like the whole town of Loomis, like why the heck, when I have fire hydrant right down the street and everybody has a manicured lawn, why are my insurance rates going up a ton?
• 16:35
  Speaker 1: Can you speak to that a little bit?
• 16:38
  Speaker 3: Yeah, most of it is a zip code by zip code situation where insurance companies just deem it as a potential brush fire risk.
• 16:56
  Speaker 3: Loomis, like parts of Granite Bay, like basically Douglas and Folsom, auburn, I think, north and east of that by the lake and Los Lagos.
• 17:00
  Speaker 3: That's all fair plan essentially.
• 17:02
  Speaker 3: Yeah, it's brutal.
• 17:04
  Speaker 3: You could totally think that it's acceptable.
• 17:07
  Speaker 3: I have people that buy up in Penn Valley or Grass Valley and they buy cash and then all of a sudden they're like needing insurance and they can't.
• 17:15
  Speaker 3: They can't believe that the premiums are so high.
• 17:18
  Speaker 3: I'm like did your?
• 17:18
  Speaker 3: Realtor like notice, notify you like about what's going on here and and that's huge.
• 17:22
  Speaker 1: I mean, we talk about that, you know, about professionalism on the show a lot and now more than ever, especially with some of the changes in real estate, like having a realtor is a pretty important thing.
• 17:32
  Speaker 1: So this would be another good reason that if they're doing their job, they're helping you do your due diligence and if, at the very least, they're asking you, hey, let me check in with my insurance guy, or why don't you call and let's check before we offer on this property, cause that can be your due diligence on the back end and really, if you're listing a home, you should probably have that information ready right before the show.
• 17:51
  Speaker 1: I told you guys I've got a buddy in Washington buying a second home in an area that would be kind of relatively like Tahoe, kind of arid, dry, seasonal.
• 17:58
  Speaker 1: Um, got a decent deal and got into contract and then called 17 different insurance carriers and found out that the sellers got non-renewed and he cannot find any coverage.
• 18:09
  Speaker 1: He found some coverage.
• 18:10
  Speaker 1: That was for, I think the home was like 600,000 and he was able to get coverage partially up for like the rebuild to the cost of rebuild, which was 265, which that's just not possible.
• 18:22
  Speaker 1: So really, you know kind of scary time if you're looking at that.
• 18:23
  Speaker 1: And I think one of the things you talked about even Penn Valley or Grass Valley, something like that places where sometimes a first time home buyer might just move out a little ways and say, hey, this is something that we can afford, it's a little bit better up in cool, or somewhere like that.
• 18:40
  Speaker 1: Well, all of a sudden, now what was lower for the purchase price, which historically, with rates being kind of more decent, the, the monthly expense, was mainly what people focus on, now this insurance that's two or three times more expensive than it has been in the past.
• 18:51
  Speaker 1: That can really sink the ship.
• 18:53
  Speaker 3: Yes.
• 18:54
  Speaker 1: Yeah.
• 18:55
  Speaker 2: So I had heard, um, I had a buddy who I grew up with in high school and had his own farmer's um agency and he had told me maybe I shouldn't have said farmer, sorry, but he told me, um, basically, farmers had like 98% of their coverage.
• 19:09
  Speaker 2: So if, like, if a hundred percent of their claims cashed in all at once, they could cover 98 percent of them.
• 19:15
  Speaker 2: Is that like a?
• 19:16
  Speaker 2: Is that a true thing?
• 19:17
  Speaker 2: Is that like a standard?
• 19:18
  Speaker 2: Was it just a?
• 19:19
  Speaker 1: sales.
• 19:19
  Speaker 2: That's better than banks I mean that's a lot of cash, right?
• 19:22
  Speaker 2: Yeah?
• 19:23
  Speaker 3: I don't know how that all specifically works.
• 19:27
  Speaker 3: The longer that I've been in insurance, the more that I realize there are.
• 19:30
  Speaker 3: It's very complicated and there's a lot of layers.
• 19:34
  Speaker 3: These insurance companies they have money to pay out claims, but in the event of a large loss they have insurance on their insurance called reinsurance, so it's that they can use to pay out claims and those costs have gone up.
• 19:49
  Speaker 3: The reinsurance costs in California have gone up tremendously.
• 19:52
  Speaker 3: That's why a lot of these insurance companies are actually leaving, because it's no longer profitable.
• 19:57
  Speaker 2: Well, yeah, I mean, it's like if you bought your house in the late seventies, that house probably cost you maybe a hundred grand.
• 20:03
  Speaker 2: That house today is worth probably, you know, let's just call it 500 grand, so it's, it's five X in price, and if it were to burn to the ground it would probably cost $300,000 to rebuild.
• 20:16
  Speaker 2: So, you know, and that $100,000 house was probably built for, you know, $40,000 to $60,000 at the onset, which is wild, you know.
• 20:26
  Speaker 2: And it sounds like the insurance industry hasn't really been allowed to scale their pricing model based off of inflation or accelerated cost of goods.
• 20:37
  Speaker 3: They haven't yeah, they haven't been allowed to even include the reinsurance cost that they pay into the rates.
• 20:43
  Speaker 3: I think that's something that they're working on or they have done, and everything with insurance is delayed years, so especially with any sort of approval but I know that's something that they want to do is include the reinsurance cost into the premiums, because that's just one of their major expenses that they're not allowed to include.
• 21:00
  Speaker 2: That's interesting.
• 21:00
  Speaker 2: So you so?
• 21:01
  Speaker 2: So, as a, as a, as a, as a policy, as a purchaser, as a client.
• 21:04
  Speaker 2: Well, hold on, I'm going to buy my insurance, oh, and then I'm going to have to pay towards the insurance to insure my insurance as well yeah.
• 21:12
  Speaker 1: Yeah, that's a tough pill to swallow, but at the end of the day it's it's also like you know, you kind of have to have it right 100.
• 21:18
  Speaker 2: Well, you absolutely have to.
• 21:20
  Speaker 1: Not having it's obviously even more catastrophic, yeah, so I mean, obviously those companies paid out a ton of money, you know, obviously on top of the regular insurance claims that happen, right.
• 21:32
  Speaker 1: But you go into a season where we had massive wildfire, catastrophic loss, and the state can't or correct me if I'm wrong the state can't make an insurer offer a product here, correct?
• 21:44
  Speaker 1: No?
• 21:45
  Speaker 1: So as a business or as a client, I have to get insurance.
• 21:50
  Speaker 1: So what are my options or is there a guarantee that I can get insurance?
• 21:54
  Speaker 3: there's always a guarantee.
• 21:55
  Speaker 3: Well, if the property's in reasonable condition, okay, it's not dilapidated and falling apart but yes, and excluding affordability, right.
• 22:03
  Speaker 2: Yes, because I mean sure you can get anything as long as you can afford it.
• 22:06
  Speaker 3: Yeah so there's really two options if you're in a potential brush fire fire risk area Loomis and above by that I mean Auburn, east of yeah, north yeah.
• 22:20
  Speaker 3: There's a what's the fair plan, and so the fair plan covers fire, wind, hail, lightning, vandalism.
• 22:28
  Speaker 3: A lot of people think the fair plan just covers fire insurance.
• 22:31
  Speaker 3: There's very specific items that it does cover and then you'd have a supplemental policy.
• 22:35
  Speaker 3: Some people call it the DIC.
• 22:36
  Speaker 3: A lot of people think the fair plan just covers fire insurance.
• 22:38
  Speaker 3: There's very specific items that it does cover and then you'd have a supplemental policy.
• 22:40
  Speaker 3: Some people call it the DIC, the D-I-C, yep Difference in Conditions Policy.
• 22:42
  Speaker 3: That's what Blake calls it and that covers.
• 22:43
  Speaker 3: The main things it covers is water, liability and theft, but there's some more ancillary coverages.
• 22:50
  Speaker 3: The two combine to form a normal home insurance policy or a typical home insurance policy.
• 22:55
  Speaker 3: That's how I like to explain it.
• 22:56
  Speaker 3: But so, besides the fair plan, there's also what's called surplus lines carriers.
• 23:02
  Speaker 3: So these carriers are companies you probably haven't heard of or maybe have Lloyd's of London, kw, specialty, like Bridgewater.
• 23:11
  Speaker 1: Uncle Mike's House of Insurance, exactly.
• 23:13
  Speaker 3: So these companies are not admitted carriers.
• 23:17
  Speaker 3: So not admitted carriers.
• 23:18
  Speaker 3: They're not held to California's regulations of insurance or insurance protection fund and not held to their regulations Usually they're.
• 23:30
  Speaker 3: Sometimes their premiums are better than what the fair plan is, but most of the time the fair plan is a better deal and so some people think that the fair plan is.
• 23:39
  Speaker 3: Their rates are crazy, they are Um, but there are.
• 23:43
  Speaker 2: they get trashed pretty regularly in real estate.
• 23:45
  Speaker 1: Yeah, in our, in our you know industry, really it's like okay, gosh, it has to go, fair plan, it has to go fair plan.
• 23:51
  Speaker 1: But you just quoted we're moving, we're looking at House and Loomis you wrote it up both ways and actually the fair plan with that wraparound coverage or am I saying that right was significantly less expensive.
• 24:03
  Speaker 1: It's still more than I would like to pay, but it is less expensive, by a ways, than it would have been to have one of those other carriers.
• 24:09
  Speaker 3: Yes, so the surplus lines carriers, they're they're probably allowed to charge the appropriate rate that they can calculate to what the risk would be.
• 24:16
  Speaker 3: Um, the fair plan is um, so that's why they they offer that, but usually it's that's when you see those premiums that are like tens 15, $40,000 a year.
• 24:27
  Speaker 3: But the fair plan usually is much more affordable in quotes.
• 24:32
  Speaker 1: Well, that's scary too right.
• 24:34
  Speaker 1: Like you know, that's one of the things that we you go back to like 08, 09, and where people got in really trouble was with adjustable rate mortgages.
• 24:41
  Speaker 1: There's a lot of things going on, but with an adjustable rate mortgage, where people didn't understand that that index was not fixed and then things reset and all of a sudden their monthly payment which again is really what most of us look at in terms of our monthly budgets or affordability that changes significantly.
• 25:00
  Speaker 1: Well, heck, if you bought a house in Loomis five years ago and you had a 30-year fixed mortgage and you're like hey, a, you got a great interest rate at that time, but B, you're like man, I'm kind of squeezing through, we can make this happen.
• 25:08
  Speaker 1: This is what we want to do.
• 25:09
  Speaker 1: I don't really anticipate any big raises or any big changes in life.
• 25:13
  Speaker 1: And then life has gotten more expensive.
• 25:15
  Speaker 1: But all of a sudden your insurance went from, I don't know, $1,500 a year to now $7,000, $8,000 a year for a plan.
• 25:24
  Speaker 3: So pretty crazy If your rates did go up to $7,000 or $8,000, you can give me a call, yeah.
• 25:30
  Speaker 3: Normally I would see, like I, when people ask for like a random quotes depending, I usually say with combined with the wraparound policy, it should be between 2,500 to maybe 5,000, depending on the size and value of the house.
• 25:46
  Speaker 1: But we're going to, we're going to plug you West, because I think one of the great things about working with you, too, is has been you're extremely responsive.
• 25:53
  Speaker 1: I don't feel like we're working with a gigantic company when I have to run things by, either personally or for clients, and you come back with a pretty good you know.
• 26:01
  Speaker 1: A the rates have been better than what I've found elsewhere.
• 26:03
  Speaker 1: And then B, it's also just been nice to know like if I was a realtor, I would definitely have somebody like you on speed dial, even as a lender.
• 26:10
  Speaker 1: It's a huge help to be like hey, let me dig into this a little bit and get a ballpark idea of where we're at, because if we're way off base and I've got clients who's debt to income ratios like we're right there, we can't afford a $400 a month insurance policy and I just have to tell them like we can do whatever we want with the rate.
• 26:25
  Speaker 1: You can ask for a seller credit, you can do all sorts of things, but this is just just not a house that's going to work out in this current market.
• 26:32
  Speaker 3: Yeah.
• 26:32
  Speaker 1: Yeah.
• 26:33
  Speaker 1: Do you see any changes on the horizon?
• 26:35
  Speaker 1: They said insurance commissioners up for reelection.
• 26:40
  Speaker 1: Or should people in places like Loomis and Penrith and parts of Granite Bay and going up up in the foothills like just expect to continue to see significant increases?
• 26:46
  Speaker 1: And is that normal in other places outside of California?
• 26:50
  Speaker 3: The whole insurance industry on the national front is is pretty tough.
• 26:56
  Speaker 3: I know that um florida is getting.
• 26:58
  Speaker 3: They have their own issues of hurricanes and other states have tornadoes.
• 27:02
  Speaker 1: Uh but florida's got a lot of issues.
• 27:04
  Speaker 1: In general they don't have much yeah well, which is the florida man.
• 27:09
  Speaker 2: I'm glad that florida came up, because obviously there's such a contrast between you know, we don't talk a lot of politics but red and blue states.
• 27:15
  Speaker 2: It's not necessarily a red and blue issue.
• 27:20
  Speaker 2: I mean, florida's got their problems, as does California, so I think that it's funny because it is you mentioned.
• 27:28
  Speaker 2: It's a publicly elected position.
• 27:31
  Speaker 1: It's more of a West Coast, East Coast kind of thing.
• 27:33
  Speaker 3: We're going back to it's Biggie elected position.
• 27:34
  Speaker 3: It's more of a West Coast East Coast kind of thing.
• 27:35
  Speaker 3: We're going back to it's.
• 27:36
  Speaker 1: Biggie and Tupac.
• 27:36
  Speaker 1: Yep, exactly that's what it is.
• 27:37
  Speaker 3: But yeah, it's Well.
• 27:38
  Speaker 3: He just Ricardo Lara just got.
• 27:41
  Speaker 3: He's the commissioner.
• 27:42
  Speaker 3: He just got reelected in this last election, so that's.
• 27:46
  Speaker 2: In California or in Florida?
• 27:47
  Speaker 2: In California, okay.
• 27:48
  Speaker 3: Yeah, you would say.
• 27:57
  Speaker 3: I would say the approvals could have gone in before then, but I think to get reelected.
• 28:05
  Speaker 3: If he wanted to get reelected, he pushed them off so people weren't complaining about their rates going up and being like oh, we need to change this guy, Gotcha.
• 28:14
  Speaker 1: And you know what, as a consumer, my first thought, as rates kind of got more expensive, was, like you know, f the insurance carriers, insurance.
• 28:21
  Speaker 1: They've been making money for years and billions of dollars.
• 28:24
  Speaker 1: And then, as a business owner, it's like okay, if I'm taking my brother-in-law kind of explained it this way to me, he's like you're a company and every new client that you bring on costs you money.
• 28:34
  Speaker 1: Like you, that's the very basics of business.
• 28:37
  Speaker 1: Like you can't do that right and it's not like overnight, it's like a loss leader.
• 28:40
  Speaker 1: We're.
• 28:40
  Speaker 1: We're going to get on the cost of acquisitions, you know a couple hundred bucks, and then we're gonna it's a three-year plan and we start to make our money back.
• 28:47
  Speaker 1: It doesn't look like there's any hope for that.
• 28:49
  Speaker 1: So as a company, I can understand why these insurance carriers are like some actuary.
• 28:54
  Speaker 1: Doesn't take a big brain to be like that doesn't work, yeah yeah, more business is not good.
• 28:58
  Speaker 3: Yes, yes, that is very true, I think it's.
• 29:01
  Speaker 3: You asked how long is this going to be?
• 29:03
  Speaker 3: Once these insurance companies get their rates and they're able to prove or not prove, but able to show that these rates are affecting their bottom line, they will start loosening up and it will start down the hill, loomis.
• 29:23
  Speaker 3: It will start with Lewis, like grass Valley and Auburn and everything.
• 29:25
  Speaker 3: That's going to be longer Cause that's just farther up the hill, but I think it's a.
• 29:31
  Speaker 3: I just lost my train of thought, so it's all good.
• 29:35
  Speaker 1: Well, let me ask you this question on that Are there anything, anything that a individual homework could do Like?
• 29:41
  Speaker 1: Is creating defensible space a issue to maybe get that relooked at or reexamined?
• 29:46
  Speaker 1: Or, in the event of like, to use the parallel of, like a good driving record in the automobile industry?
• 29:53
  Speaker 1: Is there anything in insurance where, like, I didn't file a lot of claims or I have a higher deductible, like what could I do if I'm like man, I really just need to lower this.
• 30:01
  Speaker 1: However, I can and still have coverage.
• 30:03
  Speaker 3: The fair plan or they are offering discounts for defensible space.
• 30:09
  Speaker 3: I will say they are very, very hard to meet, um most people do not, or you'll have to pay lots of money to do it.
• 30:18
  Speaker 1: Um, so that's that's a juice might not be worth the squeeze.
• 30:20
  Speaker 3: Yes, and then a uh, you can raise the deductible.
• 30:24
  Speaker 3: Uh, that would help.
• 30:26
  Speaker 1: It doesn't make a huge difference.
• 30:27
  Speaker 1: So I mean, you and I kind of just talked through that a little bit and for what I would kind of look at as like man, that's going to be a lot out of pocket.
• 30:34
  Speaker 1: If I ended up doing something, my savings, when you kind of broke it down for me, weren't as significant as I would have guessed yeah, and then there are the fair plan has some hardening discounts.
• 30:45
  Speaker 3: Those are also hard to meet because the main one being that most people can't meet our enclosed eaves or soffits on your, on the exterior of your house, um, so that with especially a lot of older homes that are, those are hard to meet.
• 30:57
  Speaker 3: But as for like the, so the insurance, prefers the enclosed eave.
• 31:02
  Speaker 3: You get like a 10% discount if you meet certain hardening like type of roof, type of siding, type of but most people can't meet that enclosed eave, gotcha, and that's so the embers aren't going into like a bird blocking or something and ripping the roof off pretty much Okay.
• 31:17
  Speaker 1: So time for concrete homes, maybe.
• 31:18
  Speaker 1: Maybe it's time for home builders to get a little smarter.
• 31:20
  Speaker 2: Here of like well, we have that small, that small little problem of earthquakes here in California reinforced masonry.
• 31:27
  Speaker 1: Come on straw and hay.
• 31:29
  Speaker 1: Well, that doesn't sound super helpful either man.
• 31:31
  Speaker 2: You see the videos online of these um 3d 3d drawings of homes and um I mean, they're building them out of concrete.
• 31:38
  Speaker 2: It's pretty wild.
• 31:40
  Speaker 1: Oh yeah, like the 3D-printed kind of homes.
• 31:41
  Speaker 2: Yeah, that's crazy.
• 31:43
  Speaker 1: It comes out looking like soft serve and it just goes back and forth, isn't it wild.
• 31:46
  Speaker 1: Yeah, I mean, on that note, not to divert completely, but these are the kind of things that I think create opportunities for innovation, though, because we have a housing shortage, homes are expensive to build.
• 31:58
  Speaker 1: There's a lot of people that would rather have a home that's kind of generic.
• 32:02
  Speaker 1: I mean, you look at all the track housing going out now and even how some of that is so close to each other.
• 32:06
  Speaker 1: If you go out by Natomas or Rio Linda out there, like along the freeway there, they're really cranking them in there.
• 32:15
  Speaker 1: But I think, yeah, maybe there's a way to build a more fire-resistant house and maybe have it be a more affordable option to down the road and maybe have it be a more affordable option too, down the road.
• 32:20
  Speaker 2: Well, and I think, even to piggyback on what you were saying, aside from the narrative, we live in an area that people are actually moving into.
• 32:28
  Speaker 2: People want to move here.
• 32:29
  Speaker 2: So, obviously dealing with these affordability issues and obviously, Sacramento area being the capital city of the state of California, that stuff's going on right here in our front yard.
• 32:42
  Speaker 2: The government is right there.
• 32:45
  Speaker 2: Sacramento has seemingly, over the last 10 years, really moved into becoming one of these more progressive areas and trying to invite more revenue and more people to come here.
• 33:03
  Speaker 1: I just found all of these sounds again on this board.
• 33:05
  Speaker 3: So.
• 33:05
  Speaker 1: I don't know what any of them are.
• 33:06
  Speaker 1: When I press a random button, we're just getting random sounds so it piggybacks.
• 33:11
  Speaker 2: It's actually.
• 33:12
  Speaker 2: I want to jump ahead because we have one of our questions that came in is are you?
• 33:19
  Speaker 2: And it leads right to this.
• 33:20
  Speaker 2: So do you see or are you hearing sounds of any potential disruption?
• 33:24
  Speaker 2: Because obviously, when an industry is in with my air quotes crisis mode, which is fair to say yeah, absolutely, I don't think anybody's said that's a secret.
• 33:35
  Speaker 2: I mean, the affordability and the availability is an absolute problem.
• 33:39
  Speaker 2: So have you heard of, you know of or are there any current disruptors out there that are looking to tackle the affordability and the insurance issue and grab up some market share or build a business off of it?
• 33:52
  Speaker 3: I think it's because you did ask that question or send me that question.
• 33:57
  Speaker 3: I've been thinking about it.
• 33:58
  Speaker 3: The insurance industry is heavily regulated, like I said, through the state, and so it's hard for any company to like just come in and offer insurance.
• 34:07
  Speaker 3: I do know before, uh, probably within the last few years.
• 34:11
  Speaker 3: There's companies like hippo or uh uh bamboo is kind of one, but kind of these like tech based online.
• 34:19
  Speaker 2: There's one super modern super modern.
• 34:21
  Speaker 3: They look all cool, but they have come in.
• 34:24
  Speaker 1: they offer super low rates.
• 34:25
  Speaker 3: Yeah, they offer rocket mortgage and and they come in and then they're either non-renewing policies or they are.
• 34:34
  Speaker 3: Their rates have gone up thousands of dollars over the last few years.
• 34:39
  Speaker 3: So that's that's when I, when I first heard of like the idea of disruptions, those are usually the what comes to mind.
• 34:45
  Speaker 3: But they've not done as well, but a couple of claims in their belly up, that's the.
• 34:52
  Speaker 3: That's the idea of like I first, when I saw these companies offering low rates, I'm like I got to get a partnered with them and my uncle has been a broker.
• 34:59
  Speaker 3: He's like just be wary of that, because that's very common that people come in and offer low rates and then in a few years they're back where everybody else is.
• 35:06
  Speaker 1: It's like the Wolf of wall street.
• 35:07
  Speaker 1: I've got a limited time offer for you.
• 35:10
  Speaker 1: You can get insurance for pennies on the dollar?
• 35:14
  Speaker 3: Um, there's, I do know, like an idea of disruption that I do have, which is another question is are more people dropping insurance or more companies?
• 35:31
  Speaker 3: These companies are using these flyover companies that go over portions of the US like every month or a couple times a year to find trees overhanging debris in your backyard, different colored tiles of your roof, anything that shows potential wear and tear, and just non-renewing, just based on proactive maintenance.
• 35:51
  Speaker 2: Which sucks right, Because that's a flyover.
• 35:53
  Speaker 2: You can just get lumped into this bad area and maybe not even have any.
• 36:00
  Speaker 3: Well, they're actually very Because.
• 36:01
  Speaker 3: I've actually requested they're very specific and they have like heat monitors and they're able to determine moss, and it's actually that's that's actually pretty impressive because most for the the history that I guess it's very common for all the insurance companies to send out inspector the first time you write a policy and then nobody comes back and looks at it, and there's then people.
• 36:24
  Speaker 3: That's why you see like houses, like how is that insured?
• 36:26
  Speaker 3: It's probably been with the same company for years, uh, but these they're actually doing.
• 36:32
  Speaker 3: I think it's in the.
• 36:33
  Speaker 3: In the grand scheme of thing, it's a good thing, but it just stinks right now because you can't find anybody else to insure it.
• 36:39
  Speaker 3: Well it aligns.
• 36:40
  Speaker 2: It aligns with my business so well too, because we talk so often about deferred maintenance as a homeowner, and it's.
• 36:45
  Speaker 2: It's just so easy when you're a homeowner and cost of living and pricing it has gone up, it's and it falls you also get but you also go kind of numb to things.
• 36:53
  Speaker 2: you walk past the same thing enough times, eventually you don't even notice it.
• 36:56
  Speaker 2: And people lived in their house for 5, 10, 15, 20, 15, 20 years.
• 37:00
  Speaker 2: Like you stop noticing things, or they become the further in your rearview mirror they get, the smaller they are and the less important they are.
• 37:07
  Speaker 2: And then, when it comes time to sell, or now, all of a sudden, your insurance provider has upped their game and gotten more granular and gotten more specific and you're like, oh gosh, I'm up against the wall now what am I going to do?
• 37:19
  Speaker 2: So it's really interesting, because I talk so much about homeowner maintenance responsibilities and it sounds like insurance is going to start leaning into that as well.
• 37:30
  Speaker 1: Yes, and that's something to keep in mind too.
• 37:31
  Speaker 1: I even talk with a lot of first-time homebuyers and all they're focused on is like can we get the down payment?
• 37:37
  Speaker 1: When is our first payment due?
• 37:38
  Speaker 1: And then, what is my monthly?
• 37:39
  Speaker 1: And especially, I've had people that have gone from, like you know, one bedroom apartment and now they're buying a three and two or three and three, and I said, like you can live however you want to, but I'm going to just tell you there's some other costs that are going to be involved, right?
• 37:51
  Speaker 1: That home is coming with no furniture, no window coverings, like no anything, right?
• 37:57
  Speaker 2: so you got a lawn that you have to mow now.
• 37:59
  Speaker 2: You didn't have that in your apartment or your condo yep.
• 38:01
  Speaker 1: And then the ongoing maintenance.
• 38:03
  Speaker 1: Like you bought an asset, which is great, but you know whether it's a rental home or your home, like there's stuff, and then you add stuff.
• 38:09
  Speaker 1: So like when the pool service, if you have a pool, you didn't just pay for the pool once and you're not just paying for your weekly pool service.
• 38:15
  Speaker 1: Stuff is going to get old and break and that is no different than any part of your house, whether it's whether you do a good job or not, there's just continued expenses, and this sounds silly Life happens, yeah, but
• 38:27
  Speaker 1: yeah, you're going to continue to invest in that property.
• 38:29
  Speaker 1: You're going to need to.
• 38:30
  Speaker 1: And so I kind of like that idea of maybe there's a even a more personalized insurance down the road, where maybe they got drones coming over and checking it out, or maybe there's an insurance component where, like, an inspector has to kind of come out to renew your policy and you have some incentive to have your house in good working order or some dispensable space cleared.
• 38:48
  Speaker 1: I mean, just kind of think of ideas of how this could be more personalized, because if I'm in a, you know the zip code or like let's take Loomis, for example 90 was a nine, five, six five.
• 38:59
  Speaker 2: 980, what is it?
• 39:00
  Speaker 2: 956, 50.
• 39:01
  Speaker 2: Yeah 4650.
• 39:02
  Speaker 1: Then you know there's a vast difference between somebody living on 20 acres with an old home that was built 100 years ago and somebody in a place that has all gated community, everything's trimmed back, everything is.
• 39:13
  Speaker 1: You know, there's asphalt everywhere and obviously massive wildfires can make big differences as they create their own weather system and do their own thing.
• 39:21
  Speaker 1: But there's a much greater risk, I would imagine, if you've got 500 oak trees around your property than living in the middle of a neighborhood.
• 39:29
  Speaker 3: There's definitely a middle ground, I think.
• 39:31
  Speaker 3: Right now, with the way that they're just non-renewing these policies based on some of these photos that I see, it's definitely like come on, like what are we doing?
• 39:39
  Speaker 3: But there is a fine middle ground, I think it's.
• 39:44
  Speaker 3: It's.
• 39:44
  Speaker 2: it's scary though, too, because I mean, like those companies had those policies with those clients to make money.
• 39:50
  Speaker 2: I mean, it's, at the end of the day, it's a business.
• 39:52
  Speaker 2: That's what every business is in business to do is to make money.
• 39:55
  Speaker 2: There's gotta be a profit margin.
• 39:56
  Speaker 2: So what's wild is you, you know 70,000 policies that was.
• 39:59
  Speaker 2: I mean, that's not an easy decision to make.
• 40:02
  Speaker 2: Hey, we're going to walk away from 70,000 people that are willing to pay us every month to provide a coverage or you know the insurance premium.
• 40:12
  Speaker 2: And that's wild.
• 40:13
  Speaker 2: Like so to say that, okay, we were not able to make money on these 70,000, like that's eye-opening as well.
• 40:20
  Speaker 2: Right and sure, it's a it's a bad look for the provider.
• 40:24
  Speaker 2: But the providers like on their heels going hey guys, like I can't do it, like I can't just be giving things away.
• 40:29
  Speaker 2: It's gotta be profitable, it's a business.
• 40:31
  Speaker 1: Well, I would imagine I can't say for sure the ticker names, but like there's gotta be publicly traded companies too, I would imagine, right.
• 40:38
  Speaker 1: So like a farmers or all state, I'm just guessing and whether they are or not, like you've got people that at the end of the day like it's a for-profit business and so if you're not making a profit, or like we talked about literally taking a loss to take on new clients, and then that's tough.
• 40:53
  Speaker 1: Now when they move out of those, do you think that they're like more heavily trying to pick up market share in other places in the country where maybe claims aren't so much, because obviously florida is going to be tough, pretty much the whole south and anywhere there's tornado alley and then here in california probably a lot of that.
• 41:08
  Speaker 1: So I would imagine maybe they're trying to go into there's got to be a sweet spot like rhode island, something like that you're dealing with a lot older properties and older homes.
• 41:17
  Speaker 3: Yeah, there's every everybody, every place has its own issues, but I I do know just the, on average, the state of California, for the last, for however many years, has been on the lower side of home insurance premiums.
• 41:32
  Speaker 1: I've heard that also.
• 41:32
  Speaker 1: It's hard to imagine In the last five years.
• 41:34
  Speaker 3: Obviously that has changed, but before that-.
• 41:37
  Speaker 2: Don't say that out loud.
• 41:37
  Speaker 2: It's like the most expensive place to live in the world.
• 41:41
  Speaker 1: Well, there's a difference, right.
• 41:41
  Speaker 1: That's probably based on percentage, right?
• 41:43
  Speaker 1: So we have expensive homes, but percentage of coverage.
• 41:47
  Speaker 1: I mean, I've heard that too, and it's not uncommon in other places of the country for there to be massive variabilities year to year in your insurance.
• 41:54
  Speaker 1: Is that true?
• 41:55
  Speaker 3: I'm not as knowledgeable on that.
• 41:56
  Speaker 3: You're the California pro.
• 41:57
  Speaker 3: Yeah, knowledgeable on that.
• 41:58
  Speaker 1: I was like you're the California pro.
• 41:59
  Speaker 3: Yeah, but yes, I did.
• 42:01
  Speaker 3: That is a statistic that has that is no, but yeah.
• 42:05
  Speaker 1: And we're just maybe not used to that here, and so it's feels alarming to just say well, yeah, we don't care really as a consumer, what happened last year.
• 42:12
  Speaker 1: We still we budgeted 150 bucks a month.
• 42:17
  Speaker 3: That's what we need.
• 42:17
  Speaker 3: Why are my rates being affected by the person that decides to live up in the forest Sure?
• 42:24
  Speaker 1: Well, I guess it's just the whole basket of the insurance company has to cover everybody and that's why we have insurance right.
• 42:30
  Speaker 1: There's plenty of people that have 30 years, they own a home and they never have a single claim right.
• 42:36
  Speaker 3: That's insurance.
• 42:36
  Speaker 3: But some people you know it's frustrating when you have your rate increase and you can't really necessarily afford it.
• 42:42
  Speaker 1: Yeah, yeah.
• 42:43
  Speaker 1: I wonder if there's an opportunity for somebody like a you know, a home inspection company to partner down the road on the home inspection portion of that.
• 42:53
  Speaker 1: Like, your boots are on the ground already out there We've actually been approached.
• 42:56
  Speaker 2: I've had a handful of conversations regarding that, handful of conversations regarding that.
• 43:00
  Speaker 2: Um, it's a slippery slope because, ultimately, from from our standpoint, the insurance company is looking for somebody to somebody to take accountability for it.
• 43:09
  Speaker 2: Um, so it's like you really have to figure out how to airtight that because, um, you, you certainly don't want to be stepping into that kind of liability where, where you know, these insurance companies are not small companies and they've got, they've got they've got lawyers they've got lawyers and they've got cash on hand.
• 43:26
  Speaker 1: You're going to have to up your errors in emissions policy.
• 43:28
  Speaker 2: So, and and good, bad or indifferent, like, yeah, I mean it's, it's, it's actually a fairly enticing idea because obviously we could charge for those inspections and that's that's what we do, that's what we make our money, um, you know.
• 43:41
  Speaker 2: But again, like the, the dotting, the i's and the crossing of the t's on the back end for us, we we're still kind of looking at it, trying to figure out if, if it's something that's, that's feasible, because I mean what do you have?
• 43:54
  Speaker 3: what do you have?
• 43:54
  Speaker 2: to charge for an inspection like that, because there's obviously got to be some buffer in there to cover your own insurance.
• 44:01
  Speaker 1: Yeah, right now you got insurance against trying to help out the insurance who's getting backed up by their insurance because I mean something like that's super easy to go out there and pencil whip.
• 44:09
  Speaker 2: Oh yeah, someone needs a home.
• 44:11
  Speaker 2: Hey, can you guys sign off on this sure?
• 44:12
  Speaker 2: Oh wait, hold on a second.
• 44:14
  Speaker 2: Like, yeah, we just, we just we just signed off on on a really, you know, bad deal yeah, I can see that maybe a little conflict of interest too.
• 44:21
  Speaker 1: right, like you represent whoever's hiring you for the home inspection, there's probably already enough pressure sometimes in real estate to like, yeah, this would have to be independent of that for sure.
• 44:31
  Speaker 2: Now I think I mean, obviously there's so much integrity plays such a big part, especially in the home inspection Cause those guys aren't licensed.
• 44:38
  Speaker 2: Anyways, they're, they're certified, but there's no license.
• 44:40
  Speaker 2: Um, that's why they're not allowed to, you know, bid on repairs and find things, you know services for their findings.
• 44:48
  Speaker 2: Um, it's pretty much kind of a uh, you just, you just pass it along to the appropriate trade.
• 44:53
  Speaker 1: So interesting, interesting and, yeah, I don't have any answers.
• 44:59
  Speaker 1: I don't have the answers, but this is good because I think it helps clear the air on a few things.
• 45:05
  Speaker 1: One like just the blanket idea that the fair play-in is a bad thing.
• 45:08
  Speaker 1: Again, like my buddy wishes he probably had that up in Washington right now an opportunity for that.
• 45:13
  Speaker 1: And I did ask him.
• 45:14
  Speaker 1: I said you know, I do know that there is something like that in California and he had said there is apparently something like that in Washington, but it only applied to primary homes as well.
• 45:22
  Speaker 1: So I'm sure this he was looking at secondary home and that there will be ins and outs coming through like every facet of this as the as the years kind of march on here.
• 45:32
  Speaker 1: But it's just kind of bad timing, if anything.
• 45:35
  Speaker 1: Right, I think we've all said things have got more expense the last couple of years, but to have interest rates more than double in the last couple of years and then just home prices continue to pretty much still go up and then to have that that's always kind of been the easy one right the slam dunk of I know what that's going to be.
• 45:51
  Speaker 1: It's just it's tougher to buy a home than ever.
• 45:53
  Speaker 1: I'm going to be honest about it, like a lot of people will kind of sweep that under the rug, but I even have a concern too, not to be the naysayer, but like the american dream of owning a home like is going to become more of a dream than a reality, I think for some people and you can say what you want about you know, dream for all program and accessibility, but the truth is I just don't think that that's going to be an opportunity that everybody's going to be able to take advantage of until some of these things maybe right themselves well, I think and to speak to that I mean ryan lundquist has put out a ton of stuff, you know, comparing, like the affordability.
• 46:22
  Speaker 2: There was an affordability again air quotes crisis in the 80s, because interest rates were high and the cost of purchasing a home was high as well, and markets have a way of figuring those things out.
• 46:36
  Speaker 2: I mean, there's no hiding it.
• 46:39
  Speaker 2: The fact of the matter is there are physically more dollars in our economy now than there's no hiding it there's.
• 46:42
  Speaker 2: The fact of the matter is there are physically more dollars in our economy now than there ever have been before, so the value of said dollar is lower than it probably was before or really ever was before economics with Dan yeah Right.
• 46:52
  Speaker 2: Hey, we're not going to go into deep dive on this, but at a surface level, I mean, it's it's fairly self self-explanatory.
• 46:58
  Speaker 2: And employers are going to have to pay more money, which means they're going to have to charge more for their product, which will allow people to afford that American dream again.
• 47:06
  Speaker 2: So it's just a matter of of, of, of, of one side catching up with the other, I think.
• 47:12
  Speaker 1: Yeah, or like we talked about some innovation where, like, they can build homes for cheaper and there's still a good quality product and and that's going to be coming.
• 47:19
  Speaker 1: I bet in the next 10 years you're going to see some more cool modular and when they're built from day one to be more fire-resistive or they've got a fire-resistive coating.
• 47:32
  Speaker 2: We're pretty smart as a race of little human beings to come up with some cool new stuff.
• 47:34
  Speaker 2: The cost to rebuild doesn't necessarily always have to increase.
• 47:37
  Speaker 2: Maybe that's part of that disruption we were talking about earlier those companies that are going to figure out a way to build a more fire-resistant home.
• 47:46
  Speaker 1: Well, Wes, I'm interested in learning a little bit more about you.
• 47:49
  Speaker 1: You obviously opened up your business practice here.
• 47:52
  Speaker 1: How long have you had your business?
• 47:53
  Speaker 1: Six years in April.
• 47:55
  Speaker 1: Awesome Congrats.
• 47:57
  Speaker 1: And then are you from here originally.
• 48:00
  Speaker 3: I'm from here.
• 48:00
  Speaker 3: Well, I was born in Minnesota, skull Vikings, good to know.
• 48:04
  Speaker 3: Yeah, big Vikings fan.
• 48:07
  Speaker 3: Then my dad is a surgeon at Sutter Roseville.
• 48:10
  Speaker 2: Okay.
• 48:10
  Speaker 3: So went to Granite Bay High School, played golf there and went to Cal Poly San Luis Obispo for college.
• 48:16
  Speaker 1: Awesome, and what brought you back here?
• 48:20
  Speaker 3: What brought us back here is there's not too much opportunity in San Luis Obispo.
• 48:25
  Speaker 3: My wife and I wanted to live there.
• 48:26
  Speaker 3: I did cold calling for a year for a software company and that was brutal, and then we found ourselves driving back to the area and it's like a five-hour drive.
• 48:37
  Speaker 2: Is she from here as well?
• 48:38
  Speaker 3: She's from Modesto or Escalon, but we decided Sacramento, the valley.
• 48:43
  Speaker 3: Yeah, exactly, it's a little further south, yeah, a little drier, yes, but yeah, we love Sacramento.
• 48:50
  Speaker 3: A lot of our family has moved up or around here.
• 48:54
  Speaker 1: That's cool.
• 48:54
  Speaker 1: That helps.
• 48:55
  Speaker 1: What are some of your other favorite parts about living in Sacramento?
• 48:59
  Speaker 3: I thought about this question and I've always root for the underdog, um, and I just feel like Sacramento, for, is always just looked down upon as a city, isn't that weird?
• 49:10
  Speaker 3: Yeah, I don't know why I feel like it's turned in the corner the last few years.
• 49:14
  Speaker 2: I mean, there's so many, so many people have moved into the area and and there there's a good buzz.
• 49:20
  Speaker 2: I do, yeah, I like the momentum that Sacramento has.
• 49:23
  Speaker 2: But yeah, when, when I was growing up in Halfon Bay and my dad moved to Placerville, I mean it was like you couldn't drive through Sacramento fast enough.
• 49:29
  Speaker 2: There was no reason to stop, and no offense to Sacramento because I've met.
• 49:32
  Speaker 2: Like I said, we've come a long way.
• 49:34
  Speaker 3: Oh yeah, that's.
• 49:35
  Speaker 3: That's exactly where I've come.
• 49:36
  Speaker 3: My dad did his residency in Minnesota and when they were coming to do he was working at UC Davis.
• 49:43
  Speaker 3: My mom was like Sacramento, who wants to live there?
• 49:45
  Speaker 3: Uh, but now I look at it and it's grown so much.
• 49:49
  Speaker 3: Um, there's the downtown.
• 49:51
  Speaker 3: Like food scene is really cool.
• 49:53
  Speaker 2: The form of the fork movements, yeah, and awesome the way they embrace.
• 49:56
  Speaker 1: That has been well your office is right next door to it.
• 49:58
  Speaker 1: Next taco yeah right next door to a Knicks taco?
• 50:00
  Speaker 1: Yeah, that would be dangerous.
• 50:02
  Speaker 3: And then, yeah, you got the Kings lighting the beam.
• 50:03
  Speaker 3: They're back for the most part, but better than they have been.
• 50:07
  Speaker 2: So it's fun.
• 50:07
  Speaker 2: They've had some great buzz.
• 50:08
  Speaker 2: The Kings have had some great buzz.
• 50:10
  Speaker 2: They've got some good, talented players.
• 50:11
  Speaker 2: A lot of fun.
• 50:13
  Speaker 1: Yeah, it seems to me there's other cities that I work in that I won't name Seattle where I would just quite frankly say that they're trending in the wrong direction for a number of reasons and I don't feel that living here, I feel like people that are here are proud to be from here and like living here for the most part, and so, as you still get an influx from outside of here, obviously more than just home prices is driving that right.
• 50:36
  Speaker 1: Like you, I think it's one of the biggest interstate movements is from San Francisco the greater Bay area to here.
• 50:42
  Speaker 1: And and I think there's some really good reasons why that is So- they obviously think this is a better place to live.
• 50:49
  Speaker 1: Yeah, I can't I can't disagree.
• 50:51
  Speaker 1: Affordability helps.
• 50:53
  Speaker 2: Yes, exactly.
• 50:54
  Speaker 2: So let's talk a little bit about if, if, if someone were looking to get into your industry.
• 51:02
  Speaker 2: Obviously you got in in your mid to late 20s and have been able to build a pretty successful business.
• 51:08
  Speaker 2: What kind of advice would you have for someone looking to get started in your business?
• 51:13
  Speaker 3: The biggest one is, I would have to say, is you have to be willing to be patient or just delayed gratification.
• 51:21
  Speaker 3: To be patient or just delayed gratification, insurance is, it's very stable, but you have to be willing to get by on some smaller paychecks for the first few years.
• 51:30
  Speaker 2: Incremental growth Exactly Very similar to our pest control business.
• 51:33
  Speaker 2: You're not getting rich overnight.
• 51:34
  Speaker 3: Yes, exactly so.
• 51:35
  Speaker 3: I remember when I first started it was right when, like, the real estate market was booming here, lenders were going, going, our mortgages were great and that's who I get a lot of my referrals from.
• 51:46
  Speaker 3: So we'd be like sitting and they'd be talking about the deals they're doing and how much money they're making.
• 51:50
  Speaker 3: I'm just like that's cool yeah, that's awesome.
• 51:53
  Speaker 2: Let me get you that quote exactly.
• 51:55
  Speaker 2: If you could just sell 5 000 more of those than I could be so it's just that's the one thing I recommend.
• 52:04
  Speaker 3: I you just got to kind of have some grit and get through the first years.
• 52:08
  Speaker 1: Yeah, and it sounded like, if I remember from some of our previous conversations, um you had a good mentor too.
• 52:13
  Speaker 3: Yes, oh yeah, my uncle's been a broker for 25 years.
• 52:16
  Speaker 3: I started as a.
• 52:18
  Speaker 3: He said if you go get trained somewhere, I'll kind of help you get started.
• 52:21
  Speaker 3: And so I got trained.
• 52:23
  Speaker 3: I was under a farmer's agent and then, april 2018, I said let's do this.
• 52:31
  Speaker 3: So I just built a business from scratch at that point.
• 52:34
  Speaker 2: That's awesome.
• 52:34
  Speaker 2: How many employees.
• 52:36
  Speaker 3: I have one, and she's just a customer service associate and she rocks it.
• 52:43
  Speaker 2: Awesome, awesome, yeah, much like, much like ours.
• 52:46
  Speaker 2: She's probably your lifeline, yes, yeah.
• 52:48
  Speaker 1: Yeah, that's awesome, though I mean, at a pretty young age, to go out on your own and start your own business was especially with something that is stable down the road, when you have relationships built and you have residual income and and repeating income, but kind of what at a pretty young age, like I said, made you make that move to start your own business.
• 53:09
  Speaker 3: I think it was just I saw what my uncle did and I talked to him a lot because I was like I cannot do this cold calling thing.
• 53:16
  Speaker 3: I didn't have any relationship with the people that I was speaking on the phone with and he says one, if you like to play golf and you like to do business at the same time, the insurance is a great industry.
• 53:28
  Speaker 1: So I play golf with you.
• 53:30
  Speaker 1: So that is that is true, Absolutely so.
• 53:33
  Speaker 2: Wes has to throttle it back.
• 53:34
  Speaker 2: Well, he's got to let people win every now and then which probably?
• 53:38
  Speaker 2: Sucks.
• 53:38
  Speaker 3: But yeah, he's, he helped me really get started and I just I think when you're building a family and you're starting, I just thought over over time it would be a good career and I wanted to build something it's.
• 53:55
  Speaker 3: I always like it didn't like the idea of like going into a nine to five and kind of building somebody else's yeah kingdom, I guess.
• 54:01
  Speaker 1: Well, I think that's pretty entrepreneurship, one-on-one, right.
• 54:04
  Speaker 1: Yeah, that's the idea.
• 54:05
  Speaker 2: That's the part that jumped out to me that huge insight like, okay, how long I don't want to.
• 54:08
  Speaker 2: I don't want to be making money for somebody else to ultimately have to just go take the leap.
• 54:13
  Speaker 2: Like, let me take the leap early and and reap the rewards the whole time.
• 54:19
  Speaker 3: In insurance.
• 54:19
  Speaker 3: It is hard to do that without a network or a resource.
• 54:23
  Speaker 3: Like my uncle, like he he definitely.
• 54:25
  Speaker 3: I have to give all the credit to him for helping me, because these insurance companies require a lot of specifics and to get appointed or to be able to write with them of either history.
• 54:35
  Speaker 3: So I couldn't have done it without him.
• 54:37
  Speaker 3: So it is hard to get in the industry if you don't have that kind of connection.
• 54:41
  Speaker 3: But I'm extremely grateful.
• 54:43
  Speaker 3: That's awesome.
• 54:44
  Speaker 1: But I don't think that's crazy to ever.
• 54:46
  Speaker 1: And then you know, we were just um at a Sacramento real producers event and talking to one of the um kind of stud realtor there and she talked about we asked her that same question.
• 54:54
  Speaker 1: She's like, really you kind of need some cash to get through the beginning, cause you you're not going to make any money right off the bat and you need a good mentor.
• 55:01
  Speaker 1: You got to, you got to be all in and you got to decide like this is what you want to do.
• 55:04
  Speaker 1: And I've always said, like, whether it's my kids or anybody else, I've coaches, I'll, I'll go the extra mile with you, but I'm not willing to do anything that you're, you know, as soon as you're less interested than me, like I'm a hundred percent out.
• 55:15
  Speaker 1: And so I think, finding a good mentor where you can maybe prove to prove to them like this is what I want to do, and then having some you know lines of whether it's I'm just going to live on very little and or I'm going to have to save up some money from something to to get out there, and then I would imagine you got to hit the ground running, like you got to start building relationships and it's just that seems to be business in general, but everything related to real estate really is very relational.
• 55:39
  Speaker 2: Are you?
• 55:40
  Speaker 2: Are you a goal setter?
• 55:40
  Speaker 2: What, what, what motivates?
• 55:42
  Speaker 2: What's your motivation?
• 55:44
  Speaker 3: Uh, I always, when goals are like, people ask me like, oh, we need to have goals.
• 55:54
  Speaker 3: I don't.
• 55:54
  Speaker 3: I think I have like ideas in mind of where I want to be and what a standard month would look like for new, like production or how.
• 55:57
  Speaker 2: I want to produce.
• 55:58
  Speaker 3: But whenever I had a quota, like at the software company, I hated that.
• 56:04
  Speaker 3: It made me extremely nervous and stressed out.
• 56:06
  Speaker 3: And in insurance, I just want to like I don't have, like I need to get this policy in by the end of the month or I'm not going to be excited.
• 56:13
  Speaker 3: I want to do what's best for the client and that's what I like about my job is.
• 56:18
  Speaker 3: It's more about serving the needs of the other person rather than my own.
• 56:21
  Speaker 3: And whenever it works out, it works out.
• 56:23
  Speaker 3: That's awesome.
• 56:24
  Speaker 1: That is awesome and that's a really good way to build a business.
• 56:27
  Speaker 1: And I can attest as like as your client and then somebody that's helped serve my clients is, I feel, a hundred percent.
• 56:34
  Speaker 1: That's the case, right, like you're, you're always forward with the customer service.
• 56:37
  Speaker 1: You do care about what you're doing.
• 56:39
  Speaker 1: I feel like, um, you know there's another factor there, like you know what you're doing too, that not everybody in this industry, you know, necessarily knows what they're doing all the time.
• 56:47
  Speaker 1: And so, um, I think that's a great way to build a business is just being genuine.
• 56:50
  Speaker 1: And then, yeah, goals are great to have, sometimes in quotas and numbers and, you know, in lending too, like that's a big part of our life.
• 56:56
  Speaker 1: But at the end of the day, it's like I'm not going to try to change a closing date to meet the end of a month goal to, you know, get a kicker on commission, and that's actually one of the reasons I love working where I'm at now, because that hasn't always been the comp plan.
• 57:07
  Speaker 1: Like they just say, like we're going to pay you the same, do a good job and meet the goals are detrimental to your mental health.
• 57:14
  Speaker 2: Not to go completely down that road.
• 57:15
  Speaker 2: But if it doesn't work for you, it doesn't work.
• 57:18
  Speaker 2: And obviously six years in a growing business, thriving business.
• 57:22
  Speaker 3: The way you're doing it is working.
• 57:24
  Speaker 2: Yeah, I mean you got a sandbag a little bit on the golf course, that's occupational hazard.
• 57:29
  Speaker 1: Let's just say, dan and I are dropping you if we leave the next time, so you're going to have to bring it way down.
• 57:34
  Speaker 2: Speaking of golf, what's your favorite course in the area?
• 57:37
  Speaker 3: Don't say Sierra view I'm just, I'm a member at Sierra.
• 57:40
  Speaker 1: View, which is a cool spot.
• 57:43
  Speaker 1: You don't even know it's there, it's a great course.
• 57:47
  Speaker 3: I will say I got to play Del Paso in a member or a team event.
• 57:52
  Speaker 2: That's a nice spot.
• 57:53
  Speaker 3: I never played there before and I was extremely impressed.
• 57:56
  Speaker 3: I was like this is just in the middle of Sacramento and not the greatest area, and it was like an oasis.
• 58:01
  Speaker 2: It's wild, it's a city block, the course is a city block.
• 58:06
  Speaker 2: You get inside those walls and you're like dang, this is wild.
• 58:08
  Speaker 3: I was very impressed by that golf course.
• 58:11
  Speaker 1: I think we should just say we're going to have a foursome of golf here, and whoever sends us the best question or something we've got to get a fourth member here.
• 58:18
  Speaker 2: First person to ping us on the gram you're in.
• 58:22
  Speaker 1: Yeah, I love it, dude, We'll take you out.
• 58:24
  Speaker 1: Yeah Well, wes.
• 58:25
  Speaker 1: This has been awesome dude.
• 58:26
  Speaker 1: It's awesome to spend time with you, get to know you a little bit better, and then also, I really appreciate you shedding some insight on a really confusing and honestly worrisome thing in real estate for a lot of people.
• 58:36
  Speaker 1: So you know, quick recap is like there's options out there.
• 58:39
  Speaker 1: Working with a broker is an awesome thing where they can kind of take some of the late workout of you making a million phone calls and then also, like the California fair plan, even though it is a challenge in its own right, is a great opportunity and sometimes the best option that you have.
• 58:51
  Speaker 3: So I will say for any like, like for you or any realtors I have, they'll send me, like an address um of a place that they're looking at, that buying or putting an offer in, and I'm more than happy to give them an estimate.
• 59:03
  Speaker 1: Yeah, and you do a really timely job of that too, and in times when, like right Although I could say that last five years it's been like you gotta be on the spot when stuff's coming on the market and so, understanding, a realtor can find it or the homeowner can find on Zillow, and then they run it by me as lender and I said, well, we're good here, except for if we're even partially close, we need to get somebody in, and so I think more than ever, like having an integral part of our business is a partnership with.
• 59:26
  Speaker 2: Are you?
• 59:26
  Speaker 2: Are you seeing that?
• 59:27
  Speaker 2: Are you becoming, have you become a more, you think, important component to those real estate deals where, like Blake said in the past, that you were just getting written in at a hundred 150 bucks?
• 59:36
  Speaker 2: Now it's like no, like we need to hear back from our guy, because this number could be a hundred dollars, it could be $500 and it could be more.
• 59:44
  Speaker 3: Yeah, so I sometimes like it just depends on the experience of the lender or the the realtor, but sometimes it's I get brought in too late and then it blows up a deal.
• 59:54
  Speaker 3: That's definitely happened, but yeah it's.
• 59:57
  Speaker 3: It's definitely more like that's one of the first pieces of research people are doing of trying to figure out what the insurance rates can be Be proactive.
• 1:00:04
  Speaker 2: Yeah, we're starting to see a lot of the real estate community going out and shopping rates even before they list a property, so they can go hey guys.
• 1:00:10
  Speaker 1: Yeah, that absolutely should be happening.
• 1:00:12
  Speaker 1: If you're listing a home and I'm not telling you how to do your job, but like it's, it's a real disincentive to, that's going to scare buyers away.
• 1:00:19
  Speaker 1: It's going to scare the way the buyers that can afford it anyway right, so it is what it is.
• 1:00:23
  Speaker 1: Yeah, yep, so well, this is awesome.
• 1:00:26
  Speaker 1: Guys, let's play a little ACDC and get us out of here.
• 1:00:29
  Speaker 2: Let's get out of here, man.
• 1:00:29
  Speaker 2: Appreciate it Wes.
• 1:00:30
  Speaker 2: We'll see you next time.