CREI Partners Webinar: Active and Passive Investors Must Knows for Multi-Family Property Insurance

Well, thank you for everybody being on this evening as we talk about the About Must knows for Multifamily Property Insurance want to first start off by introducing CREI Partners. CRI Partners provides opportunities for investors to grow and diversify their wealth in purchasing large multifamily properties. And we do so through pulling capital together to buy large multifamily assets, typically 70 to 200 unit size properties. And once we acquire that value add real estate, we'll execute our property business plan and then distribute the returns to our investors once things have stabilized and we're able to provide positive stabilized cash flow and then we'll exit our strategy and distribute profits from there. A little bit about Myself I'm Wayne, I've been with CREI Partners for about a year now. We started our real estate investment company last year and we're looking and growing our value add real estate business but for the last 13 years have been with the Fortune 150 Commercial Real Estate company leading property management services in Washington, D.C. houston and Austin. Had the privilege of working with a lot of real estate professionals during that time, adding a lot of repositioning benefit to our to our clients and really in short just the passion of commercial real estate and the partners and those that are on our team we you know help made me want to start CRI Partners. So my background education MBA at University of North Carolina, Ken and Flagler Business School. We got a Master of Arts in Economics from University of Oklahoma and CPM certified for Certified Property Manager. So a couple ways y' all can learn more about us. First, follow our podcast the Untold Stories of Real Estate Investing. You can find that on itunes or stitcher. Check out Creipartners.com podcast to listen there. Please subscribe and provide a review to help us grow. And then if you're passively investing and wanting to learn more about investing in multifamily, check out our monthly newsletter by subscribing@creipartners.com ebook that ebook will give you the top five must knows tips for passively investing and it'll get you added to our newsletter as well. So for this evening, we're excited to have Kyle with us today. Kyle's with Fitzpatrick Insurance Solutions. He's attended the University of Texas of the Permian Basin, lettering on the university's baseball team and graduating in 2014 with a BA in marketing. He's been in the industry, the insurance industry, since 2014 and been a multifamily risk specialist for over four years with Fitzpatrick Insurance Solutions. He's worked over $1 billion worth of properties in total insured value, which ranges from 12 as small as 12 units up to 3,000 plus units. And I'm sure he'll talk more about Fitzpatrick Insurance Solutions. But Fitzpatrick Insurance Solutions provides a full range of solutions for the insurance needs of apartment owners and managers and condominium associations. You know, they are my go to group for bidding and finding our insurance, pricing and making sure we have the proper coverage. So with that, Kyle, thank you so much for being on this evening and I'll turn it over to you.

Yeah, Wayne, I really appreciate you having me. Like Wayne said, at fis, we're a small shop, but we focus exclusively on multifamily. And that's, you know, your smaller complex is probably 12 is about as low as we'll go, but usually anything from a single complex of 20 to upwards of 300 units. We're also very good at packaging a portfolio like that little bio said about upwards of 3,000 units. What we do is we have a couple of exclusive proprietary programs for multifamily as well as with the advantage of our agency and our niche is that I'm pretty confident that we have access to every carrier that is writing multifamily properties right now. Aside properties that don't fit into your nationwide, your state farms, your farmers, the carriers, you see commercials for those admitted carriers, a lot of what those guys are looking for is your big nice class A apartments. We focus on more class B class C apartment complexes. And the reality of that market right now, if any of you are already have invested in a few properties or have experience getting insurance with a couple of these properties, is that it's a very hard market right now. It's a very competitive market right now. Pretty much ever since Harvey, prices have continued to rise. Deductible structures have gotten a little less unfavorable to insureds. But that doesn't mean that there's nothing good price and good deals to be had out there. It is just you really need to kind of scour the market when you take a look at what you're doing. And Wayne, I don't know if anyone can chime in or anything, but during this whole process, if anyone has any questions, by all means hit the chat or join in. Wayne, is it okay if I go ahead and share my screen?

Yeah, absolutely. And then for those that are on, yeah, definitely use the chat or Q and A box and we'll monitor those and have a time for Q and A afterwards.

But okay, great, you're good.

Share. Thanks Kyle.

Okay, so what I am, what I am gonna share here with you guys. First we're gonna start out with basically what, what, what you get when you get insurance for an apartment complex. This is a sample, this is a quote. I bound recently for a complex. This is with a broken program called Strata as far as for non coastal apartment complexes. Very competitive program. A lot of the quote, you know, when you first look at it, you get your premiums when you, you know, if you ever get a quote or you ever get a verbal quote from an agent, from broker, whoever and they tell you what the premium is. Also always ask them what the all in premium is because carriers will always have their FE, their taxes, etc. This program notes that terrorism coverage is included. Typically if you have a lender, a bank lender, especially Fannie or Freddie, they're going to require terrorism coverage. Terrorism coverage covers certified acts of terrorism as certified by the federal government. So those events are few and far between. With non lendered properties we usually. Terrorism is not often bound. So what you're paying for that premium money you'll notice with a lot of insurance quotes, with a lot of insurance, those big binders you get, there's a lot of mumbo jumbo. The most important stuff that you are getting is this right here. These are your total insured values. This is what you are buying for property coverage. Now with property coverage, property coverage is covering damages to the property that is, you know, fire, wind, hail, name, storm. If that is a, is that as a covered peril, that's what you're covering. These are the values of the property right here. This you, you get a certain amount allotted for buildings, a certain amount allotted for business personal property, certain amount allotted for loss of rent. With, with that the we'll go into what goes into quoting a little bit later but those are what you are. That's a lot of how carriers build their rate and build their values off that total insured value. So what that means and how, and then what you're paying for. These are a lot of sub limits and things like that. These are, you know, just various coverages. Oftentimes they're not not ever utilized. But to get into the meat of what the policy and what drives premium and what you're really paying for, you have to go all the way down to the bottom which is, which is longer than I remember and you have kind of a good breakdown. So you have your limits of insurance over here. You have some building information right here and you have your perils. What is covered. All other perils is basically all perils except for wind tail, except for perils that are specifically listed additionally. So all perils are, you know, that's fire, that can be burglary, if that's an included peril. Just things like that, that could be, you know, that could be a tree falling on your property and things like that. This deductible right here in multifamily deductibles that are higher than, you know, your typical, if you look at your homeowner's policy, you might see you have a thousand dollar deductible or $500 deductible. In multifamily, your deductibles, especially if it is a per occurrence policy, which this one is. We'll get into the distinct per occurrence per building here in a little bit. If you, if you have a per occurrence policy, it is typically a higher value deductible because it is a higher value property than just your normal, you know, a normal single family home. Wind hail deductibles in the market, especially if you are investing in Texas, in the Gulf, in Oklahoma, wind tail deductibles have risen significantly. Wind, hail and named storm deductibles have risen significantly in the past pretty much since Harvey. Getting a $50,000, getting an actual dollar amount wind hail deductible in this market, if you are in, if you were in Texas, if you were in Oklahoma or if you were investing in the Gulf states at this point is a win. This specific policy, we actually did a buy down to 25,000, which is an additional, it's basically a separate policy. You can always, you can buy down deductibles, but a lot of times in Texas and Oklahoma, you're going to be looking at a percentage deductible. So that's 1% of your total insured value or 2% of your total insured value. Now if this property was in a tier one county that's a coastal county, like for instance, if it was in Harris county in Texas, it would have a specific deductible for named storm. Now, named storm is a hurricane. Like recently we had Hurricane Laura a lot of time, typically, almost, almost always named storm deductible is a percentage deductible. It is 2% or 3%. So if you're, if you're investing in Harris county, there is a, you know, you'll get that name storm with that 2% or 3%. Something that if you go into a property, a coastal property, coastal insurance rates are higher. Especially since Harvey, there's just more risk, there's more storm risk. Something to keep in mind when you're investing is have an idea of what deductible you are comfortable with on a property. So you take into account your total insured value, which we're going to talk about in a second, about how you go about figuring out what the actual total insured value of your, of your building is. And then you, you think about the 1% of that total insured value, 2% of that total insured value, all the way up to 5%, and what kind of deductible you are comfortable sitting with. Because you can, you can either save money on, you can save some money on premium if you're willing to eat a higher deductible. Also, if you're not, if you're not comfortable with that, you can always buy down your deductible. But carriers will charge you premium for that. Carriers got hit pretty hard when it comes to hurricane season. That doesn't seem to be slowing down much. So it's something to keep in mind when you're looking at a multifamily property and you figure out your total insured value. You also need to think about what kind of deductible structure that you are, that you are comfortable with. Because like this, this property right here, specifically, they have a $10,000 property deductible for, you know, a fire. If they were comfortable saying, you know, I think we would rather save a little bit on this premium and have a $20,000 or $25,000 deductible for an occurrence, you know, that, that, that's something they can do. So this is, this is just kind of a standard property coverage. Again, if you have any questions, by all means hit me at the end of this presentation. This is a sample general liability policy for that same insured. So general liability is going to be your claims, like your slip and falls lawsuits, kind of things of that nature. General liability claims can get a little more serious, a little more morbid in terms of an assault. If the, you know, a tenant assaults another tenant, you know, sometimes the, the complex itself can be brought into that litigation. You know, even general liability will also cover defense. So if there is an incident at the complex, even if that comp, even if you as the owner, you as your complex didn't do, at least in your mind or in reality didn't do what you are being accused of, which you're being sued for. General liability with this, with this occurrence limit will cover defense costs and so with a typical general liability policy, you get $1 million per occurrence. So that's any single one incident. So someone slips in the parking lot, you have $1 million to cover that, there's another incident. If, you know, someone gets injured slipping on our stairs that were too slick, that's another million. This property has a general aggregate limit of 2 million. That is the max amount that this policy will pay out. Essentially, this policy will pay out two full losses of a million dollars or a bunch of small losses that end up equaling up to $2 million. For bigger properties, anything over 75 to 100 units, a lot of times we will recommend umbrella coverage which is an extra million dollars to $5 million that swoops in. That sits under this general liability policy as extra coverage. Should you hit this $2 million aggregate or a million dollars of a single occurrence limit where, you know, God forbid there's a death at the complex, and sometimes those losses can get north of a million dollars. That's where that umbrella would slip in. Deductibles, if any, on general liability are pretty low. This one is $500 per claim, at least. Pretty low compared to your property. It has, you know, some other basic things. Medical expenses. A lot of times this medical expense limit really limits. It's basically a lawsuit deterrent. You know, someone slips on those steps, they need to go to, you know, they need to go to the er, get an X ray, get checked out, whatever. That's what this coverage is for. It's got $5,000 to that. It's basically to cover medical claims and things like that. Basically how carriers determine the general liability rates. We'll kind of go into that right now because that's a little. It's a little more simple. They basically base it off the number of units. They factor in the crime score of the policy or of the location where it is. And if there's a swimming pool and past loss history. It's basically kind of a formula between, you know, those four. It's really. It's. It's kind of been. It's hard to say what, you know, if you were to send me an address, you know, I couldn't say right off the bat, oh, I think it's going to be this. But it takes some underwriting. So what we do when we get a property, say Wayne, you know, sends me over property and says, kyle, I'm thinking about, you know, I'm looking at this property, what we do is we run it. We have a couple databases. We run a thing called Risk meter and take a look at some early underwriting information. So this, this is a property. It's a coastal property in Galveston. You get the replacement cost, the estimated replacement cost right here, which, you know, we'll go into how that factors in here in a second when we do our underwriting spreadsheet. You get the crime risk. This is what the GL carriers are taking into account. They're getting the. They're looking at the number of units. They're looking at the crime risk, the crime. This is what the crime score looks like. So this one is in that 61 to 80. This isn't. This isn't a place that GL cares are gonna love. You're probably looking at a price that's close to, you know, I would say 70, $80 a door on this one if I were. If I were just a guess. But again, it needs to be underwritten. This risk meter can also give you a flood zone determination. This one just misses is in an X flood zone, but it's very close to this A zone. We would probably run a more intricate determination. Run it through. Run it through another system we have just to be sure that this is not in that. That a flood zone. X flood zone. A flood policy in an ex flood zone for a single building is probably going to be a little less than $1,000 as long as there's been no flood loss history. And a flood zone is going to run probably north of $3,000 per building at the very best. So it's definitely something to keep in mind if that property is in a flood zone. Wayne and I actually had something that came up there recently. This is the same thing, the flood risk right here. And then this determines that it's out of the flood zone. So say Wayne sends me over a property and I go out, I get my risk meter report, I get a couple other reports. I start figuring out what we're gonna do with this property. I go to my underwriting spreadsheet, and this is what I'm gonna send out to carriers. This is what I'm gonna work with, and I'm gonna touch on the things that would be important to you as an investor, kind of something to look at. So let's look at figuring out what our total insured value is. So let's say we have a complex that's 50,000 square feet, and we are going to get a per. We're going to get a blanket coverage policy. What blanket coverage means is say you have 10 buildings. You have one building limit. You have one limit for all 10 of those buildings. So say. So it's kind of like the property policy I showed you a few minutes ago. So say there's a, you know, a total loss. Let's say you have 50,000. You value it at $80 a square foot, which maybe, you know, it was $92,000 or it was, it was $92 a square foot to replace it, but you have a blanket limit. So that gives you that $80 a square foot times that 50,000 square feet gives you a building value of $4 million. Now, with these 10 buildings, you have that $4 million for any one loss. So if three of these buildings burn down or all 10 of their roofs are hit by hail, you have this entire building, this entire limit is $4 million to cover that loss. So, but then if you go, go to a, if you go to per building coverage, if your policy is per building, then you have, for each of these 10 buildings, you have a $400,000 limit for each building. So with that, you need to go back to that risk meter and you need to look at that per building replacement cost estimator, this $92, and you plug that in. Because if you're going to have a per building amount, you're going to need to increase those limits because you're going to want to make sure that for each building you have that accurate replacement cost. So you want to make sure that when you're getting quotes, you're understanding, are you getting a blanket policy or are you getting a per building policy? Because that affects that total insured value and how much you want to have it insured for. So that's something that, that's, that's something to always keep in mind. That's how we come up with that insured value. A higher insured value typically means a more expensive policy because you're, you're insuring for more. Same with contents. Contents. You look at it as the, the best thing I've been told is you pick up the building, you turn it over, and you shake it out. Whatever falls out, if you own that, then that is, that is yours. So a lot of times with apartment complexes, you keep in mind, are you the owner of the refrigerators? Are you the owner, you know, of any of the appliances? Do you furnish your apartments? Do you furnish your units? Do you have office supplies there, computers, desks, etc. So that's something we almost always do. Just a blanket $10,000 in contents because we always just assume there's something there. Maybe you know, lawnmower, something the maintenance man uses, and then business income. That's something the best thing to be on top of from our, for our insurance is getting us an accurate rent roll. Because the last thing we want to do is assume that you're getting $700 a month from these units and you are actually getting fourteen hundred dollars a month from these units and you don't get paid, you don't get paid on an accurate basis. So with this one, you know, say we, we've got, we've got 10 buildings. You know, let's say there we've got, you know, 15 units. A. 15 units or 15 units per building. So we've got 150 units. And we'll give, you know, we'll say that you make $900, $900 per unit and then per year. So that's your total insured value. That's what they're basing the rate off. Now how do they come up with that rate? There's a couple of key things to look at when you're doing your underwriting. These are things that, that Wayne and I talk about. First is occupancy. And I know this spreadsheet is formatted very unfortunately where things are sideways. So again, if you have any questions, if I miss anything, please do let me know. So occupancy carriers like to see a complex that's at least 80% occupied. So if you're looking at a complex and you've got, and you've got low occupancy and a lot of those occupants are section 8 or subsidized, like right here for these categories, it's going to limit the number of carriers who want to cover that. It's not going to be a preferred risk. What you ideally want is a property where you will have as much access to as many of the solid multifamily carriers as you can get. So you're looking to check as many boxes and being a preferred risk as you can get, this is the same. So with senior housing or assisted living, those kind of one in the same senior housing doesn't just mean you have a bunch of residents that are senior citizens. It is if you are providing services, things like that. Those are. These two really matter for general liability carriers as well, because there are different general liability risk when you're a providing care to people. A big one is the year it's built. Carriers really love anything 95 or newer. You get a little older than that, you start having a few carriers pull out their carriers. Now who are Start, you know, discontinuing covering buildings built after or before 1980. So that's something to keep in mind. Now if a complex was rehabbed, there's a difference between cosmetic rehab, which is, you will see there, there are complexes that, that look very nice. They'll have redone countertops, redone some flooring, you know, things like that. Those are, those are cosmetic now. Those affect the insured value, those infect that, that cost to rebuild because those are expensive upgrades. But when they're looking at a rehab complex, they're really meaning down to the studs. Especially if it's an older complex, something in the 60s, something in the 70s. They're talking, they're redoing wiring, they're redoing H vac, they, they're redoing the guts of that building. And not just the cosmetic stuff. That, that's when you can, you can make an old building get quoted like closer to a newer building. Roof is very important. I mean, obviously if you can buy a property with a great roof, great young roof carriers like that, roofs that are older than 15 years old are typically covered at an actual cash value basis. So that's something to keep in mind. If you're buying a property with a roof that's 14, 15 years old, about a year after you buy that property, about six months after you buy that property, you, your insurance policy is no longer going to cover that roof at replacement cost. They will give you the actual cash value basis of that roof. There's a claim. So that's something to keep in mind that insurance is good, especially if you're in a high hail area and that roof has somehow not been replaced in the 10, 12, 14 years. That, that's something to keep in mind. That's a cost to think about. That insurance will not help you out much with if that roof is older than 15 years. Same with updates. Carriers like to see updates within the last 15 years on heating, wiring, plumbing. Property under renovation is not something you come into. They cover it differently. If you're replacing countertops in a couple units, that's not really what they consider property under renovation. That is more you are actively rehabbing this kind of gut rehab thing whole, you know, a whole set of buildings or something like that. Something else to keep in mind, this, this is all stuff that doesn't really come into, into play much. So construction type. Typically most of the units, the, the complexes we work with are your typical frame apartments. And that's a lot of what you'll come in with. Joisted masonry is preferable. Carriers like that, especially coastal carriers like that a lot just. Just less likely to tip over. That'd be a. You know, any sort of masonry is a preferred risk. Wood shake shingle. This note right here is not a. Exterior wise is a red flag. You'd have to go to a high risk carrier for that. Anything else doesn't make a huge difference on your property. You know, your brick veneer, your vinyl siding. Same with roof type. As long they care more about the shape than. Than the material. Unless you get into something that is hail resistant like metal. Some, some flat roofs like that. But typical asphalt shingle, they. They care more about the condition. Now wiring and breakers. I would say the biggest thing over the past two years in multifamily properties has been these stablock Federal Pacific Breakers. They usually say on the box or a property manager, maintenance, maintenance man would know that. But anything the stablock Federal Pacific breakers that would be. If I was looking at a property, that would be the first thing that I would. That I would ask. Because if a property has those you're going to. It's going to eliminate a lot of competitive carriers who would want to write the risk. You're probably going to pay 15 to 20% markup than he normally would. And I have a multifamily client who's also an electrician. And what he's told me is you're gonna pay for them in one way or another. You're either gonna pay to replace them or you're gonna pay when they cause a fire. Apparently they are very problematic. It's something that's come up in the last two years. As far as wiring, copper preferable or pigtailed aluminum. Anything that is just untreated aluminum, especially in an older building, is a red flag. Your insurance cost is going to go up significantly from there with all this stuff. If you have hardwired smoke detectors, those ones that alert a fire department as soon as smoke is detected, those are preferable. Same with a sprinklered building. That makes your property a preferable risk. This is all stuff to keep in mind. And if anyone wants a copy of this underwriting spreadsheet for your own uses, just holler at me when we're done. I can email it all over. This is stuff that is more. These gates, these fences, stuff like that is more. They take GL carriers, take notes of stuff like clubhouses, tennis courts, exercise rooms. That's places where general liability losses can be had. Same with playgrounds and then of course pool. Your cause of Most catastrophic general liability losses. If the complex does have a pool, you'll want to make sure that all of these are good answers. Which is a pool fence over, you know, over five feet, which is, you know, over 60 inches with self locking gates with depth markers. You know, if you've got a diving board, I would get rid of it. But that's just me, you know, a good solid fence. Rules posted and then this, this question is specifically about assault claims, which is assault or rape claims, which is a GL nightmare. But as far as when you're underwriting a property, when you're, when you're taking a look at it, I would get a hold of the claims history as fast as you possibly can. And I would, you know, especially if you've got, if it's a property with a lot of subsidized tenants and you know, if you combine that with, okay, they've had a couple nasty GL claims or if it's a property that's had some specific bad luck with hail, a couple hail claims in the last five years. You really need the last five years of loss history. That's what carriers will look at. But when it gets down to it, property is where is going to be the premium driver. Your insurance cost. Property makes up about 80% of your insurance cost. And it is built on a fairly simple formula that the carriers create themselves. They take your total insured value and then they factor in a rate that is based on location, loss history and all this underwriting information that we've kind of taken a look at and it is in your best interest to when you're underwriting a property. I mean, and Wayne does this, this often when he's, when he's looking at something, he gets it over to me. I pull all the underwriting information I can. I get it out to a couple of my markets and say, hey, what are we, you know, what are we thinking on this? Because there have been a few times and you know, and Wayne can tell you when I say, oh, you know, I think this one's looking at about $32,000 in total or something. But I get it out to my market and my market comes back with oh, you know, this doesn't have a great crime score or this one is in a problematic area for losses. Carriers aren't really liking this area right now. Or I talked to my market, this one is just a little too old for them for that reason that rate. So it is best. The good thing about purchasing multifamily is you can look at the market before you sign your name on the dotted line. So that these are the things that I, you know, the, the underwriting spreadsheet is admittedly, it is intimidating. You look at it, that's a lot of things, trust me, it's, it's intimidating to look at every day when I got to fill it out. But it is, it is thorough. There are only a few things that really crucially matter. And it is something that if you take, if you take a look at the property and you know, you can fill out a lot of preferable things on this, you know, you find a complex that's 90% occupied. It was built in 1990, it's got a 2015 roof, doesn't have any losses, you know, any loss history. It's frame, no stablock breakers. You know, it's got, you know, no pool. By all means, you have a preferable insurance risk. It's in a good area. It's got a low crime score. Maybe it's in a coastal county, but it's off the coast a little bit. Maybe if it's in Harris county, it missed out on Harvey Damage. You know, you've got a preferred risk. Now with coastal properties, like we mentioned, you know, your tier one sitting close to the water, you're paying nearly 50% more, if not close to 100% more. That's just the reality. Non coastal properties, the biggest, I would say the biggest hang up there is in price. It is percentage, wind, hail, deductible is what you're looking at. But that was a lot of word vomit. I hope everyone could follow that in some form or fashion. Wayne, if you want to, if you want to open it up to, if you want to open it up to quotes or to questions, let me. Wendy, do you want to start Q and A, is that okay?

Yeah, thanks. Thanks, Kyle. A lot of great information. If anyone would like to do a question, if you could just put in the chat box or Q and a.

Trina wants a copy of the spreadsheet. Let me write that email down. Give me a second. And if, and if anyone after this, if you. I think Wayne has given my contact information. Is the spreadsheet industry okay? From, from Sean, Is the spreadsheet an industry standard or is that your company spreadsheet? It's pretty industry standard. Various carriers have their different kind. It's called a statement of values. When I first got into the business, it was about like 30 columns less, which was really nice. Carriers were asking for less. But we've kind of compiled a lot of the questions we get from all these carriers into one spreadsheet and it just makes it easier because there are certain carriers that will ask for, for like four or five of these things and they can spit out a quote, but it's just easier for us when we're underwriting a property, get all the necessary information that means we can send it out to every market.

Nicole had a question. When you're buying a property, do due diligence, you find hail damage, you negotiate with the seller for them to put it on their insurance to replace the roof. Does that impact the buyer's insurance moving forward or is that, you know, so.

If the, the thing with that is if, if you can negotiate the, if you can negotiate to the, the seller putting it on their insurance, that means that they will have been able to directly attribute that to it to a hailstorm because say they have a, you know, a 10 year roof and they just, just tell the, they tell the carrier, you know, hey, we have hail damage here. Well then they ask, okay, well when was the hail storm? They could say that that wasn't in the coverage. So if it is, if it's a covered loss, covered hailstorm and it's in, you know, the last three years or so, then yeah, that's something that is taken into, it's taken into consideration with the property because a lot of that with hail losses, it doesn't necessarily, it's not something that's owner dependent like you have a fire loss because you weren't getting some appliances serviced or something that is very owner dependent. So if you bring a property like that with a fire loss like that and you can say this was the previous owner. I don't operate this way A lot of times you can get carriage look past that with hail. It is just so location, you know, location based that it does impact where this property has been hit by hail. Now there are, there have been some carriers that will actually make properties that have some hard luck hail losses their appetite. But those are getting a little fewer and far between. Question from Sean, does the spreadsheet take into consideration in construction and labor cost? If so, how often does that affect the policy limit? So Sean, could you clarify, you're talking about with the building value. I think you are. That's what they take into consideration with what it is going to cost to replace that building. If you have a, if you have a policy with, you know, with that limit that will, it will usually go up to, a lot of times will take up to 125%. If you have replacement costs, no coinsurance. A lot of times you can get up to 125% of that limit. There's also an important coverage and it was on that policy that I was showing you guys, but didn't, I didn't highlight it. But something that is an absolute necessity. Banks require it and we don't like to write without it. And I am not 100% sure where it is on this, but I know it's on here. Is ordinance and law. Okay, so ordinance and law. So what ordinance and law is, is ordinance and law is accounts for. I'm not sure. I just realized I'm not sharing my screen. Give me, give me one second here. So ordinance and law is this coverage right here. And so ordinance and law gives you, gives you additional, additional coverages. In this case, a million dollars to that that takes, basically takes you up to code. So replacing the building, that, replacing the building. Say you have it, you know, a 1985 building that burns down, you have to replace it. Building codes have changed since 1985. So what that ordinance and law coverage does is that adds an extra million dollars in coverage just to bring those. For the extra cost to bring that building up to code. Maybe that's different railing sizes or different types of materials you have to use. That's basically for, for most lenders, that's a necessity. They're not going to let you slide without that one. With, with us, it's not something that we ever really try to quote without just because it is very rare for something to have not changed between the building of a building and the replacement of said building in a loss. So that kind of addresses that question a little bit as well. Increased construction and labor costs and the differences between what that the actual cash value of a building is and what the actual cost to replacement, replace it is. What goes into all of that? Does, does anyone have any other, any other questions? Wayne, are you going to be able to get the spreadsheet out to everyone who attends? I can send you my copy.

Yeah, send me your copy and I'll send that out and also include your contact information as well.

Kyle.

So I think that concludes unless anybody has any other question. Questions. Give it a few more seconds. Kyle, real quick. For those that may be listening in on the recording in the future, can you give us your phone and email?

Yeah, you can. You can reach me. My cell number is 210-862-8986. I am a millennial. I am by my phone 24 7. So if you call or text me whenever you will, you will get a hold of me very quickly. My email is Kyle B. As boy at F I S. That's Frank, Irene, Sara, insure I N S U R e dot com. Kyle B is insure dot com and for everyone. Kind of like what Wayne does. If you've. If you've got a property you're looking at, you're interested in, you want a little, you know, see if you can get potentially a rough estimated cost of what that premium is going to be, or you're just trying to find a little more underwriting information, by all means, call me, shoot me a text, shoot me an email and, you know, would love to take a look at what you're working on and see what kind of information we can give you.

Well, sounds good, Kyle. Thank you so much. I mean, I know personally you've been very responsive and quick to getting back, so I appreciate what you do for us and hope everybody has a great evening and we'll talk soon.

Sounds good. Thank you.