Protect Your Home with the Right Insurance Coverage with Cyndee Haydon, CRS, CIPS, PMN - Part 2

You're listening to Crazy Shit in Real Estate. You'll be amazed at all these wild but true situations that others have found themselves in, because on this show you'll hear uncensored, unbelievable stories from the world of real estate.

I'm Leigh Brown.

Let's dive right in. I'm Leigh Brown, and this is Crazy Shit in Real Estate, and this is part 2 with Cindy Hayden. So if you were enthralled by the insurance information the first time Cindy was on, now we're going dig into what's happening with homeowners insurance. This is very important for not just homeowners, but for the realtors who serve them. So get your notepad and pencil. Here we go. I'll see you on the other side. Okay, so when we left off on part 1, and by the way, friends, if you missed part 1, there's a link over here. You can go watch the first part of the Cindy Hayden insurance conversation, which is a little wonky, a little shocking, and wildly important for you to know if you are messing around with real estate, whether as an agent or a consumer. And so we're going to go to part 2 now, which was frankly what we intended to do. It's all my fault. And let's talk about what's going on with homeowners insurance, because as many people know, the big carriers, the State Farms, the Allstates, the Farm Bureaus are taking their toys and their briefcases and they are going out of some states. So, Cindy, welcome back to the show. And let's just start there. Talk about how we're losing carriers and what's going on in that space. You've been involved around it for quite some time.

Yeah. So for anybody that maybe didn't catch part 1, I am in the Tampa Bay area in Florida and I had the opportunity to be working on the homeowners space for since about 2016. I chaired in 2017 for Florida Realtors working with legislation on this. And what's so interesting, Leigh, is that sometimes you don't want to be right. Like I was back then in 2017 saying insurance is the affordable housing issue. Nobody wanted to hear about it. Everybody's talking about stuff. I'm like, exactly what you said earlier. If you get in a house but you can't stay in a house, did we help anybody? I mean, I'm passionate about that. I mean, even today, as we roll out programs to help people with down payment assistance, and I say, yay, yay, when they get their first insurance renewal and it's up 50% or 100%, what do they do? And, you know, we've had people that are teachers, firefighters who say, well, maybe I'll get a roommate. But, you know, okay, maybe you do for the first year, but you're not going to be running a halfway house. That doesn't work forever, you know, so It's just so short-sighted. And personally, I've said I wish that some of those down payment assistance would be— again, if we're in a stopgap, let's stop the gap and let's let people that are in houses stay in them versus putting more people in a proposition that they might not be able to be successful when they've done everything right. You know, there's one thing when you don't do the right things. I'm all about personal responsibility. But when you did everything right, that's very hard. And so what we had, which was kind of unfortunate timing, is we created a lot of our own problems back then because Florida had an interesting one-way attorney fee and it was supposed to protect the little guy, which said if an insurance company gave you a settlement and you sued and you got a settlement that was $1 more than what they offered you, they would have to pay all your legal fees, etc., etc. Well, some attorneys in Miami—

surprise—

figured out that this could be a cottage industry And so we went to a period where prior to us changing it, we had 13%, I believe, of the policies in the country, which we're the big state. That makes sense, right? 13% of all the insurance policies were in Florida, but 89% of the lawsuits.

And I can't imagine how that happened. This is shocking that lawyers make that happen.

So the challenge was that of all of that money that insurance companies were spending, only $0.08 of every dollar was getting to the homeowner.

Wait, where was the rest of the money going, Cindy? Lawyers. It's a big mystery. Where's that Scooby-Doo man? I know, I know, right?

So again, we've done some reforms that are actually helping us stabilize. And by stabilize, I mean it might only go up 30%, but some of the places this year, our insurance carriers, we did see have some reductions or hold steady. But I just saw a really interesting article this week that said, I don't know how North Carolina is, but our state, you go through an insurance process to have a rate filing to say why you would need an increase and you have to justify it. But there are places like, I guess, Oklahoma that they don't do that. And so per value of the house, Oklahoma pays the most for homeowners insurance anywhere in the country. It's not even a high-risk area., but people just say we want to make more money and they just go, okay.

They're probably taking advantage of a situation in Oklahoma to offset the losses from a California wildfire, from a Florida hurricane, from a Texas freeze. And so I can see why. Does it make it right? Because we have a rate bureau in North Carolina and I've always kind of hated them because it felt like an impediment to the free market. But my libertarian nature pulls back a little bit when I realize that our rate bureau in North Carolina has helped us avoid the proposals from the insurance companies, because just last year they asked for a 47% increase on homeowners insurance. And then in the coastal areas, they wanted a 99% increase. And the realtors, of course, sprung into action because as we started that conversation, we have to keep people in their homes. And I think there's a really big gap of information out there for the public because when they hear about flood insurance or they hear about insurance at all, they make these assumptions that somebody's in a house that shouldn't exist, a place where people shouldn't live. They should just move. But if somebody's in a home that they've been in for 30 years and they're dialed into that community and their family lives there, why shouldn't we be able to insure a house that's been there for decades and they don't want to leave? It's just, it's a weird set of conversations going on. But our rate bureau did pull it back to 17%, which if you look at anything else in life, a 17% raise, you'd be like, wait, what? Instead of like, oh, that's great. It's not 99%.

Right. Right. And this is the area in homeowners I think that we're more vulnerable to the climate financial risk because in the flood insurance space, we talked about that FEMA has never accounted for rain and precipitation. We know it exists and we know we've seen flooding. So that's like, okay, there's some stuff that we need to look at and that makes sense. Some of what worries me in this space is there's a lot of modeling and a lot of assumptions that are being said, you know, and again, some of the historical— and I realize the guy who wrote The Big Short came and spoke to our committee at one point and he said part of what's happened with insurance is when insurance was invented, you had a house here, but they were far enough apart that your risk was diversified. You weren't going to get hit with all of them, right? And so now you look at how densely populated we are, how it's very hard to get away from risk. And then you go back to, I think, the other piece that's really impacted insurance. We talk about risk, but the other two legs of that stool are repair with labor and material costs that have skyrocketed. So even if everything had stayed the same, those costs would be going up because those costs have gone up so much, you know, that when an insurance company has to You know, like in my case, when I had the house fire, I told you about that cost to repair is a lot more in 2024 than it was in 2019.

Right.

So that's a challenge for all of us. And the hard part is, and this is a good PSA for your consumers and realtors, is we talked about on the Insurance Committee at NAR how when the fires happened in Colorado, for instance, Many people had bought a house 10 years ago, hadn't really looked at what was that insured value. And so they were underinsured. And as much as we hate paying insurance, you really are going to hate when something happens and find out, again, unintended consequences. So it is something you do want to have. And many people are having to balance it right now. How much insurance can I afford?, right? But also understand that, that based on the cost to fix anything, it's probably a good idea to look and at least have those conversations.

So this is a good action item for everybody who's listening to or watching this episode. First of all, pull your own insurance policies and check out your replacement value. That's the number you're looking for is what do they think the replacement cost is of this house. I literally just went through this on my beach house, which has been one of our best investments ever. We don't go in the summer because that's when it pays for itself.

Right.

And we had to reset our replacement value. And I'm like, I don't know what it would cost to rebuild this house. This is a 1960s old style beach house. I don't know what it would cost because now everything's changed. It would have to be way up on stilts now. You couldn't have finished area. Below, like we used to have a storage room. And so there's all these factors going in. My brain was exploding and I'm in real estate. And so I talked to my insurance agent and he's like, well, let's balance it out between what it would actually cost and what you can afford. So exactly what you just said. So we are trying to strike a balance there. And it was a painful conversation, but I'm so grateful that he had that with me so I could plan ahead. Now, if you're in real estate, this is not just coastal houses. This goes along with the COVID era, the numbers have run up, the supply chain breaking in '21, and then the fact that nobody wants to work, the labor costs are crazy if you can find a laborer. So you've got a different world than where somebody bought the house. So take your newsletter and make an article and say, hey, my ask of you, my beloved past clients, have you updated your replacement value on your insurance policy? You need to be a help to people. And this goes back to what we said in the last episode. And in this one, we're going to keep saying it. We have to keep people in their homes if we're going to protect what matters to people. It's not about what you sell if you're in real estate. It's about how you help. And this is one of those ways. And if you're a consumer, pull your insurance policy, check the replacement value. By the way, don't ask Cindy or myself for help on that. This is what you got your insurance agent for. And if your insurance agent won't answer those questions for you, then you call us and we'll give you the name off our list because we have great insurance agents that love to help. And man, asterisk here, if you're in California, we wish you all the best and may the odds be ever in your favor because California is a hot mess when it comes to insurance. But so glad you brought up replacement value. My stomach was hurting over that this whole week dealing with that one house.

Yeah. And I think, I mean, again, I want to say this with some caution of for me, I would ask, give me some ideas. But hopefully you're working with an agent where you don't automatically jump there and then put yourself in a position where you're losing the house. So, I mean, yes, you need to look at it, but all of a sudden, if it's going to be double and you can't afford it in your mortgage, you know, like, yeah, be careful with Pandora's box. But it is something that you should be thinking about. And it may be something that makes you— we keep talking about people make move decisions on all kinds of things, right? And so just like for me, I thought about my forever house on the water. I look at it and I go, I don't know how long I can handle the stress of risking losing everything and the odds in my favor. And so how long are they in my favor? And I could see myself selling and moving to something else just to not have that stress, you know.

So we don't have any stress in North Carolina. You're welcome here anytime. Yeah.

My parents owned a beach house in the Outer Banks where y'all get hit all— I mean, like, oh, I don't do the Outer Banks, girl.

I'm down in Southern beaches. My beach faces south. There's a whole for this. Okay. In— we're 3 hours away from the coast. All we have here is floods and the outer bands of a hurricane, maybe some tornadoes. It's no big deal. Maybe some hail, maybe a little freezing rain. Nothing.

Okay, good, good. Well, luckily, if you look at a map, I had one yesterday on hurricanes and all of them of all time, and the Tampa Bay area is the place you should live as well. And I think, you know, we always claim it's because we have the Indian burial grounds, but we also— there you go.

Mm-hmm.

Gators eat them. But, you know, somebody said this that made a lot more sense to me, which is probably the truth. We have very shallow water and the hurricanes need that depth. And so very shallow. Like, I'm a new boater. At low tide, it could be 1 foot and you're just praying you don't run into any. I mean, you got to stay in the channel like it's very low water. So good to know. Yeah. So I think it really helps us. It either hits like Cape Coral, Fort Myers, that area, or goes all the way up, you know, into the Panhandle. Much more so. So yeah, that's a good thing for those looking for where do you want to live. We got a great airport and I can help you in the area.

So, you know, yeah, that's why don't believe the hype that all of Florida is a hurricane zone because there's pockets.

So you talk about Florida and California, which are actually opposites of how they've addressed the problem.

They're opposites in a lot of ways. Yeah, that's so true.

Okay, so In our state, we created Citizens, which was supposed to be the insurer of last resort. And basically what people don't realize is that all of us underwrite it. So in your insurance policy, about 40% of what you pay is the insurance for the insurance company. We call it reinsurance, but they kind of say, hey, if we really, really get hit, it's almost like, you know, if all of us lost our job, we say to mom and dad, I need to borrow some money. There's this other source. They don't have all that cash. On hand to do it themselves.

Stop there for one second. So Citizens is like the Medicaid of insurance. It's the resort for if you don't have private insurance, you have that option, right? And it's funded by normal private insurance premiums. And is it funded by the state or is it solely funded by your policy premium to State Farm? A piece of that goes to Citizens?

Well, you have a policy, so like a normal insurance policy, you have a policy, but You know how the regulators determine if you're financially healthy and you get to keep selling insurance and your mortgage will keep backing it, right? Because if you've ever dropped down in a rating, then they say, well, you can't have a mortgage with this insurance. You got to get different. Well, if we had to hit that same standard, then it would be a problem. But the state is the backer of it. But insurance companies don't have the luxury. They have to buy reinsurance. Understand what I'm saying?

Advantage government over here for playing tennis, but advantage consumer because you have a backup option if all of your carriers leave.

Correct. So what happened was it was supposed to be last resort because there literally were like some of the coastal areas or something people wouldn't insure. But what happened was their rate was about 50% less than the private market. So more and more people kept going over there. And then the question is, if you need it, can they pay the bills? Right. So in Florida, they've been trying to rebalance people out because we had gotten to a low number of about half a million a few years back. Then we went up to 1.2. Million people had Citizens. So now they're bringing in carriers that are taking them out. The reason I say that is because our private market also said it's hard for us to come compete when the state is selling it for 50% cheaper. Right. So what I'm saying—

I think you're like, wouldn't you go to Citizens right out of the gate if it's half the cost of a regular carrier?

Right. So, so we've had to do some things to try to get some equity. But also there's a glide path in Citizens that it can only go up 1% a year. They're not going to catch up quickly. So it's a takeout policy. The flip side, the reason I'm saying this is my friends in California, their insurer of last resort is the most expensive. So they use— right. So anyway, they're very different. And they— Florida did not do this, but they actually for a long time were putting a cap on the private insurers. So they would say you can only charge if it costs $5,000 and they say, but you can only charge $2,000, the insurers are like, okay, we're losing money. So both models, the private insurers are losing money, right? I mean, in Florida, this was the first year that we actually are seeing that we've been losing $1 billion a year. So again, you and I are both free market people. Why would I go to work every day in real estate to say I'm going to have to pay you $1 billion at the end of it? Like, what people don't realize is why it's gotten worse, and this is a really important piece. When interest rates were 2%, 3%, there were very few places to put your money to get a decent return. And so people took risk, insurance companies took risk, other things took risk, reinsurers took risk because they could get more on that money. Even though it was risky, they made more. Now with interest rates at 7%, you can put your money a lot of places. Why are you gonna put it in Florida and California and, you know, the middle of like places burning down by fire. So part of the money that was coming, part of it's regulatory, but part of it people have to understand, money moves where it's going to get the best return. And so that's been something in that mix as well.

For the record, friends, this is why you've seen bank failures in the last 18 months, is exactly what Cindy just said. If you loan your money at 2.5%, then the money that you have to bring in to cover that costs 7%. You're gonna be upside down. And so we have upside down banks right now. You have upside down insurance. And the problem is the consumer is the one that's at risk because you at some point need insurance to keep your mortgage company happy or to give yourself the peace of mind that you're in that house. So Cindy, what we're seeing is the insurers in California have not been willing to continue taking that loss. Don't blame them. So they've lost a lot of carriers now to the point where if you own a home and you want to sell it, the carrier of the house today says, too bad, so sad, to the buyer. They won't write a policy on the property they've been covering. So what do you think is the solution for fixing what seemed okay on paper? Like we keep saying, it sounds like a good idea from the policymakers, and in the practice, winds up being detrimental to the consumer it's supposed to protect? What do you think the answer is? Well, after, after looking at Citizens in Florida, and then I cannot remember the name of the one in California to save my life.

I can't either. I can't either.

It's got some acronym.

Yeah.

And they always have an acronym.

Well, I'm probably going to say something that's not popular, but like Florida is no longer an inexpensive place to live. And the thing that I keep coming back to, you heard me say it in flood insurance and I'll say it in homeowners insurance. I always tell people the truth and I really sit down and I talk about those ongoing costs in that payment you talked about and can you afford it. I think what I'm hoping for and what we're seeing, if this year's trend would continue, is, for instance, basically what I'm seeing is for the first time rates being, you know, let's just say so the cost of insurance and across the whole country, which is a good gauge for inflation and other stuff is about a 13% increase. It's just costing 13% more on stuff. That kind of makes sense. You're like, okay, so if rates are going up 13%, I mean, if anybody's been to the grocery store or the gas station or anything else, like, stuff has gone up. So to expect it to stay the same is not realistic. But how much? And so just like I said, in flood insurance, when those changes went up 10 times, you know, what part of our economy can handle a 50% to 100% increase. And we've certainly stress-tested that in many areas recently. But in insurance, I think that if we can get increases to be— let's use flood insurance as even a model— and if it's 18% or 25%, whatever that is, at least people can plan. If people can plan, then they can say, okay, so If it's $4,000 this year and I got to plan on $4,500 the next year and $5,000, like, again, I think that then people can make an educated decision on what matters. And I also hope that we see more credits when people do things for their home that mitigate some of that risk. When you put on a new roof, we used to be able to tell a buyer, we would just be so excited. I would be so excited. I would say, Well, that typically saves you about $1,000 a year on your insurance, right? Right now we're just seeing roofs get you to keep your insurance. So again, we're in this rebalancing. I hope we see some of that because, because at the end of the day, nobody wants a claim. The consumer doesn't win with a claim and neither does the insurance company. So if we have people maintaining their homes, hardening their homes, improving their homes, being smart about it, we all win, right? We all win. So I do think we have to keep our eye out. And now in Florida, I'm struggling. We closed down a lot of fraud and we closed down this one-way attorney fees. But I have friends in Cape Coral and Fort Myers, for example, that are saying, you know, that hurricane happened almost 2 years ago in September. They still haven't gotten paid by their insurance company.

What?

No.

Oh, that's evil.

And that's where I'm like, So then you go, that's what the court system is for. Like, it's one thing to say I had hail and I replaced my roof. I never called my insurance company, pay for it or I'll sue you. You know, when you have a car accident, the first person you call is your insurance company. The adjuster looks, you make a plan. There's a way you do it. And we let all chaos happen. But when you have someone who legitimately has a loss and there are people down there whose homes are You know, and then they're told if you don't maintain it, I mean, if you let it mold, if you let it, it's on you. And again, the people that don't have the financial ability, I have many friends that have finally paid out of their own pocket waiting for a settlement. But again, that's just wrong for the people that don't have that money and shouldn't have to have that money to do that. So I do think there's still some areas that we're going to have to work on keeping insurance companies accountable. To the consumer. And how do we do that without, you know, again, artificially bloating the system?

Yeah, well, there's so much artificial bloat in the system anyway. You need better accounting on all levels to understand where the dollars go. It's all I can think of when you're telling me 2 years of waiting to get your insurance money from a policy that was enforced from premiums that you paid. It's like a deadbeat dad having to get dragged into court to pay his wife for those children and he had the money and just didn't want to do it. And I get it. Their investments are off. I could, I know all the logical reasons, but the consumer held up their end of a contract and the insurance company should have to hold up their end of that contract too. That's what it boils down to.

Right. So that part, I think as we get a little more balanced, I think there's going to have to be some guardrails, you know, but it's like anything in life. You swing one way, you swing strong the other, and then you go, where's the middle? Right. So I think we went all the way over here and we said, we're not going to sue them. We're doing this. We're trying to get people to come back to Florida. We're trying to show that we've, you know, curtailed the bad actors. I do think the thing about Florida and California, probably both, is, you know, bad behavior that starts here spreads like a cancer throughout the country. So I was at a conference for reinsurers last year and they were talking about in Texas how You know, these people would go to neighborhoods, they just do flyers and they're like, I can get you a new roof because hail hit your house, you know. And so this kind of manufacturing, you know, also it's important for every listener to know insurance is not a home warranty. It's really for catastrophic loss, hopefully. Right. It's really to— and so when people use it like a home warranty and some neighbor of yours thinks they gamed the system and they got a new roof, But what they're doing is they're making you pay for, for the next, you know, umpteen years that you own a house.

Can we just land on that for one second? Because for how many years have neighbors told neighbors, I didn't have to pay my deductible, they found hail damage, he can find it on yours. Realtors have done it. You see a house, it's got a roof that's 15 years old. Wait for your next storm and file a claim. Y'all, that roof is maintenance on your house. And if you have a legitimate claim, totally, you should place it. But to get a new roof just because you think a shingle got nicked, that's not cool. There's always a cost to somebody. The cost passed along. The roofing contractor's gonna get paid. The insurance company's gonna get paid, but there's a gap created. And now you're asking your neighbor to pay for your roof, and that's just not cool.

Yep, I agree. I do think interestingly enough, and we're starting to see a little bit of it, and legitimately so, when you have some of these flooding events that we talk about, one of the areas that there is a big loss is in auto. And, you know, I'll speak for myself. I had evacuated to Bonita Springs in Hurricane Ian because it was supposed to hit the Tampa Bay area. It wasn't even supposed to be there. I had two brand new cars, literally 6 months old. I mean, like, literally. You know, you bring both your cars because you don't want them in a hurricane, and both of them were totaled. But if you saw the pictures of the number of cars that are totaled and what the auto people— again, when you talk about diversifying risk, you know, that there were just fields of cars. And so we are seeing auto increases, and it makes sense. But again, I think that's actually an area pragmatically in flooding, like, where I think they've had to pay out a lot. And I think that as we see more of this flooding, because also flooding increases with density, right? Because we have less impervious surface, we have less ability for water to go. So that's an ever-increasing as we get to more urban cities, you know, as you see in Houston, all that concrete doesn't really absorb water well.

And I've mentioned that in a few episodes in the past, and I'm going to keep talking about it because this is where the realtors have been the voice of reason for so long and what we call smart growth of How do you say yes sometimes and no sometimes? And where do you get design that makes sense for managing situations, not just design for design's sake? We in North Carolina Realtors have had to have many fights over aesthetics in the state legislature over these kinds of mailboxes and this kind of this. And you have municipalities that want to make things very Disney-fied and pass that cost on. So we're not talking about those kinds of regulations. I'm saying if you, put houses on 0.10 of an acre where you can barely get a push lawnmower between them, you're asking for trouble. But if you build those in the right area and then you take the driveway and it's not concrete, maybe it's— I love those driveways that are strips of grass and a couple of pavers. Yes. Mid-century modern looking.

I know, I like that.

And the water can get back into the ground, so your groundwater is protected. And it's not just runoff everywhere. And right now, I think in most of our counties, we have two factions. I think in any county I talk to, you've got the growth people who say we need housing and the only way to address the affordability crisis is build, build, build. And then you have on the other side, it's the don't build a daggum thing. We like this place the way it was. We need more realtors in that conversation to say, You probably do need to add some housing, but you don't have to say yes to everything. You can't say no to everything either, or your kids can't afford to live here. So how do we balance that out? And there's a total correlation with what's happening with insurance here. The areas that are so devastated after a storm are, like you said, it's the highly dense areas where previously the storm may have hit and the water had somewhere to go. It's why I have a lot of mental gymnastic fights with the climate people because they act like everything's worse now. Well, the storm may be the same storm, but it's hitting differently because we maybe didn't make the best decisions on zoning. We didn't make the best decisions on materials. And there's got to be a balancing there because what we're doing right now, it's just, it's a push and pull of extremes. Well, isn't that life though? Maybe we don't need a push and pull of extremes. Maybe we need some common sense. Oh wait, what am I talking about?

Well, and you know, I think one common sense thing that Florida did, and they've just re-upped some money for, is we have something called mysafeflhome.com, and it's a program that they put $100 million into hardening your home. But they do a free inspection, and if they determine that you need a new roof to current standards, new windows, new garage door, all the things that would minimize your ability to have claims, and they found that on average, so the state of Florida will put $2 for every dollar you invest up to $10,000. So basically it would be $5,000 of your dollars to get $15,000 up to $15,000 of improvements. And they found that the people that took advantage of the program, it was open to everybody originally. So the primary homeowners, they found that the people that did that saved about $1,000 on their insurance. So again, that's a good investment for the state. I think we do have to think some of those kind of things that are maybe partnerships, right, of how do we help people this year? I think they were really smart, even though, like, again, my friends are at the back of the line, which again, we should be. But they rolled it out with low-income seniors for the first 2 weeks to apply, then low-income everybody, then, you know, then seniors. So the medium— so they really tried to income test it because Exactly what you said. Somebody who's lived in that home forever, maybe on a really tight fixed budget and really just needs a little help keeping that house, you know, safe for them is a good investment in our communities. And so at the end of a month or 6 weeks, then it opens up for everybody if there's money left. So again, it really gives a chance for people to be at the front of the line that need it the most. But anybody that it is their private, and then in our case, and I don't know if you guys have that here, but, but we made some really poor decisions about condos in Florida where people didn't have to fully fund reserves. And so just like normal families, you kind of budget, put stuff away, plan for that next thing. And for whatever reason, we let people, if half the people of the condo would say we don't want to, then they didn't have to.. And so what would happen is as improvements are needed, you've got big assessments. But more importantly, what happens is when you don't have money in the bank, like every other family, you find reasons not to do what you need to do. And so we had this collapse in Surfside, but what's causing all of the condos to have to get fully funded and get caught up and get sound. The challenge with that is, and where I'm going with insurance is we're doing these structural inspections and all these other things. And the other people that want that information are the insurance people. So, you know, a lot of these condos are going to see, again, some of those things come back in a different way. I will tell you one issue that we're seeing and I think is potentially across the country needs to be elevated. And I hope NAR will help bring this to the forefront. Do you know that if a condo community has a deductible on their insurance of more than 5%, that building does not qualify for Fannie and Freddie loans?

I did not know that the insurance deductible amount impacts the whole community's ability to get a loan.

Yeah. So here's where it's incongruent to me and we need some rethinking. Remember we said policies that were in place that had good ideas might need to be relooked at. So, you know, insurance companies, rightfully so, want communities to take more of a vested interest. So a 10% deductible would mean, again, lowering the insurance company's risk, and it would allow them to have smaller things get taken care of before it comes to them. I think the concern with the federal government would be, do they have 10% when that happens? My answer is, if that is the concern, Why could we not, just like in our families, have 5% in reserves for an insurance deductible, but still benefit every year of a better value on the insurance and accessibility? If that is the concern, then if there are communities that can put that in an account, but they can get more affordable insurance on everybody's payment every day, they can get a government-backed loan, and properties are valued more because they're not cash-only buildings. It's win-win-win. But again, I think it takes people like us as realtors explaining the reality of what's happening on the ground to people living or wanting to buy in those communities.

And it takes good policymakers because when you're dealing with a Fannie and Freddie policy, you've got to have the right people in charge in D.C. So hopefully we'll see some fresh blood in those seats coming up soon who will be super willing to bring realtors to the table so that we can share ideas like you just presented to make things better for homeowners around the country so that we can encourage people to buy real estate because it's a good thing. We've gone down like 14 more rabbit holes here and probably overwhelmed the audience. If you have stayed with us, you get a gold star in insurance. And I don't really know what that's worth to you, but to Cindy and myself, we value that very much. So Cindy, if somebody wants to find out more about what's happening in their state, is there a resource at the National Association of Realtors? Do they reach out to their state association? What questions should a very excited realtor ask who wants to figure out where the information lies? Because as we all know, if you ask the wrong person, you may not get to the right resource because this is a very technical and wonky side of real estate.

So at Florida Realtors, we have something called Legislative Think Tanks, and we have one whole section with insurance. And in August, we have our meetings coming up, and anybody can Zoom in on that and bring local issues. In our part of our policy, we found a long time ago that all across the state, different things could be happening. So having a way to feed in and to share it and update people was really an important thing. And we do that in January and in August. As well as we have staff that handles insurance. Trey Goldman is the one who handles for Florida Realtors. He's our chief lobbyist and expert on all things insurance. At the national level, if you look on the NAR site, there are a lot of resources. When I was chair of the Insurance Committee, one of the things we did is we created a consumer handbook of all insurance issues, mostly really focused on the homeowner's piece like we're talking today. You know, strategies like maybe someone raises their deductible in their own family to manage these costs, as we've talked about going up, or maybe we relook at, you know, what is our coverage or those kinds of things. So there is a free handbook. A realtor can get that for you. So all you need to do is ask them to go on to the NAR site and you could get it. It was in partnership with I Triple I, a nonprofit that works in the insurance space. And then again, there is an insurance committee. They would probably— and some of the things that, again, somebody could find out from an insurance and a REALTOR® perspective is really more on the flood insurance issue is probably because that's a national program. So that's where that would probably have more— you'd find more information. But I think you're right. I think our governmental affairs directors, wherever you are, if you are in a— sometimes locals are small, so every state would have somebody that handles government affairs, even if you're in a small association, but I would say they are probably most accessible and could help point you with who might be able to answer some of those questions. But I will say this, I mean, NAR has done a lot of work and it is published on the site. And like I said, you could find a lot of information about Risk Rating 2.0, about best practices, about things to understand. And one day I'll come back for part 3 on understanding Risk Rating 2.0. Why does a slab-on-grade home pay the same as an elevated home? What are those caps? How does this work? So there's a lot of misunderstanding out there in that aspect. But here's what I'll tell you about flood insurance quickly. If you ever want to know, get a private quote and compare it to NFIP. And however broke you think it is, if it were to go away, look at what you're immediately going to have to pay to keep your home. And so in my case, even though I don't have any of the past savings, I'm not on that glide path. I'm still probably saving about $5,000 a year. And so again, for those people mostly that are in homes, it's what keeps you in a home. If the rules change, then people will know what the new rules are and the people that can afford that will buy it and people that can't will make other choices. So it's less about the future. However, understand if you're someone that owns a home, the value of that home definitely is impacted by the payment.

Well, that will be supply and demand. If they reduce demand, then that's not going to be great if you're trying to sell. Cindy Hayden, thank you for coming back and talking about this stuff again. This is great information. Remember, if you're in real estate, get yourself up to speed because as the markets shift, one of the ways you can be very competitive and absolutely defend your value to your consumers is by being a really impressive repository of knowledge on things that nobody else knows about. And insurance can be one of those things. Just decide to dig in and get educated and then decide to make relationships with your state legislators, with your local planners, and with your congressional representatives in DC, because this is all of our levels of government and it's very important to the people we serve. So Cindy, thank you for getting our audience a little more educated. It's on you now, guys. Y'all got to go look some stuff up, get to know what's happening in your state. If you're in North Carolina, I'll connect you.

Fine.

I got you, boo. If you're in Tampa Bay, I'll connect you. That's right. Cindy's got you a Florida Realtors. We would love nothing more than if a bunch of Realtors raised your hands and said, we'd like to learn more about how we can be involved because we might have been involved for a long time. I have learned so much just talking to Cindy, but one of y'all out there may have a new idea that fixes everything. So don't be afraid to raise your hand and get involved because we'd love to hear from you. Absolutely. We love new ideas that'll fix everything because we admit we don't have them all. We got lots of information and ideas, but I don't have a corner on that market. Do you, Cindy?

No, ma'am.

No, ma'am.

I just keep looking and try to bring them home. If you got one, let's solve the problems we got.

So— or raise your own public policy expert. Also an option. Do like Cindy. I'm going to have an optometrist and to be determined in my house. And I love the uncertainty of life sometimes, but not when it comes to insurance. So get involved, friends. Hit the bell to subscribe. If you want to watch episode 1 with Cindy and you missed it, the link's over here. Ask a question in the comments and most importantly, tune back in. We'll see you next time. As always, I'm so super thrilled that you joined in for more crazy shit. And if you are a realtor, investor, inspector, lender, or just a regular human being who happens to have an unbelievable story that you need to tell the world about, or frankly you just need to one-up the story you just heard, then make sure to DM me on Instagram @leithomasbrown or tweet me @leebrown or frankly any social network where you hang out. I'm there. And if you had some fun, then you totally want to subscribe so you don't miss out on any future episodes.