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Welcome back to Go Gaddis Real Estate Radio, right here on AM nine 20. The answer in this segment, we've had floods. We've had fires, we've had snow storms galore, especially out west. We've even had tornadoes. Let's discuss what all of those natural disasters have to do with insurance claims and the amount we all pay for homeowner's insurance.
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You can subscribe to our podcast. We're available on every major podcasting platform. We've got a special expert advisor in this segment of the show and is Matt Reeves, who's an exclusive Allstate agent, and also a personal financial representative. Welcome, sir. Hey, sir, how are you? Good. It's been a while since you've been on, man.
Glad to have you back. It's good to be back and, uh, hopefully we've, uh, we've had a lot happen, like you said, some, some interesting weather and such since, uh, since I've been on. So yeah, it's, um, it's a great start to 2023 already. Well, when I talk to my people out in the Salt Lake City area, my friends, they talk about the number of inches of snow, uh, that are up in the mountains and it's snow.
200 inches or some crazy amount when you think about, that's, that's like 16 feet of, of snow and it's really, really amazing. But I wanna start with a question that really doesn't have anything to do with floods or fires or snowstorms or tornadoes. And it is, we were working with a couple, uh, who is moving back to Atlanta.
They sold a home in Atlanta. They moved away a couple different places. Now it's kind of time to slow down and retire. They wanna come back to Atlanta, which I love that people are attracted to Atlanta and want to come back. They're buying a nice home. I think the purchase price of the home is 2.3 million, maybe 2.44 million.
I don't remember exactly what it, what it is. And they called their insurance company to get a quote. And the quote was, We cannot insure your home. And so what they were told was that the insurance company had, didn't, rep, had done, had, did, had done a replaced replacement value calculation and it was probably 14, 15,000 square feet.
And they said the replacement value was 4 million or something like that. And they said that that exceeded their coverage limits. I didn't know that there were any such thing as coverage limits. So, Talk to us about coverage limits and also talk to us if somebody can't find, I'm gonna say a normal, the big names, you know, around the country, toure something.
What other options do they have for homeowner's insurance? Yeah, so every carrier, uh, nationwide will have some sort of a replacement cost tool that they'll utilize when, uh, when you get that quote and you give them the details of your property, right? Bedroom, bath count, square footage, things of that nature, and they'll calculate it.
And it's not uncommon that the larger the structure. The greater or the higher percentage above the purchase price or above the market value, that replacement cost estimator may, may vary. Um, and every carrier is gonna have a limit to where they're gonna say, okay, we're, we're at our exposure. So when you're in that price point mm-hmm.
It's key to make sure that you chat with your professional, you with your current carrier Okay. And find out what their, their price point is and, and when they give you that feedback and it's that much off. I would maybe ask to validate the data points of what the actual above grade square footage is.
Things of that they should make sure they have not made a, a calculation error, which does occur, which could have, so in other words, they might have estimated the replacement cost of the home, uh, artificially too high, and that put it over their limits. The odds are if a house was selling for 2.3 or 2.4 million, the replacement cost wouldn't be four point something million, maybe a few hundred thousand higher or something like that.
Okay, so number one. If you get a replacement value estimate that's too high, you need to walk through the calculations and numbers. I've had many conversations with insurance companies, not necessarily yours. You happen to be with Allstate and confirmed information on houses, and I will tell you of all of the confirmation of data on houses that I've owned and rented, they've never had it all right.
It's always been a little off here or there or something like that. Not their fault, uh, but you know, just a little thing so there could be things off in the system. My question for you, oh, Matt, did you have something you wanted? Well, I mean, it can be challenging cuz with all the data points that exist out there on a property that is on the marketplace between county records, listings and things of that nature in the, the data can vary from Carrie from location to location.
That is true. Uh, um, garbage in, garbage out from a data standpoint. Ab that makes sense. So what it would be a common, uh, replacement value coverage limit that maybe a carrier in the state of Georgia would have is, is there. Yeah. When you're looking at your, your major players, your, your big box carriers Yep.
They're all gonna stop anywhere from that two to two and a half million dollars of a replacement cost. That's kind of be their appetite for exposure Yep. To where they're gonna, anything be beyond that, we're gonna go look at some specialized carriers Yep. That do exist in the marketplace. Um, that'll go to five and 10.
They'll take on those exposures. Yep. Um, and, um, And are, are comfortable at that level, fan. Got it. And so if someone comes to you and Allstate cannot handle the limit, then you could actually help them find another place to do that. Is that correct? Or? We've got enough contacts within the marketplace, then we can allow them and, and guide them in the right direction to where they're, uh, they're gonna be properly insured and.
Obviously when you're making that type of investment in a piece of real estate, you don't wanna make sure you've got any type of shortfall in your replacement costs. No, sir. No sir. I don't know what kind of money you have. Not to worry about loss of a 4.6 million, but is a way more than I got. So let's get it.
And by the way, if you've just joined us, you're listening to Go Gaddis Real Estate Radio right here on AM nine. 20 the answer. And I've got Matt Reeves, who is an exclusive insurance agent with Allstate and also a per personal financial representative, and we were talking about insurance limits for replacement value in the state of Georgia.
His advice is if you get a quote on a very expensive home and the replacement value is significantly higher than, than the list price or what you're paying for it, you might want to verify the data and then if it is, Your carrier's coverage limits than there are other insurers out there that you could get insurance coverage with.
Let's move into another subject we've had. Floods and we've had fires and snowstorms and tornadoes. Um, we've had a lot in the past year. I don't know if we've had more than other years, but it seemed like a lot. How do these natural disasters affect home insurance claims and then ultimately, I would assume it affects the.
Cost of the insurance or the premiums because over time the insurance company has to stay profitable so they can pay claims. Yeah. So I mean, obviously when we have, uh, major issues, that is the, the largest, uh, bucket that anybody, any carrier's gonna have to pay out on. And it's, it's that toughest, and I would knock on wood that, you know, although we've had in the past week, nothing major, but we went from Wednesday where it was a summer day Yeah.
To Saturday, where we've had all four seasons in the past, a week. Past week. That's true. Um, yeah. So we, we have some wild weather here in the, in the metro Atlanta and throughout the state of Georgia. As you know, insurance is all pooled money. Right. It's, it's money in versus money out. So when we. These type of major disasters.
It, it's the, it's the biggest impact that's gonna happen to your rate. Mm-hmm. Um, statewide. Um, because it's going to be such a drain on all the resources of the, the carriers Yep. Of the local, uh, vendors. And it's, when we have these type of big issues, the, the biggest frustrating piece that always comes about it is the, the time it takes for a claim to process through.
Yeah. Well, especially not everybody, when, when you experience a hurricane, for example, I know we don't have many hurricanes in, in the state of Georgia and I don't think we've had recently, but I mean that not like these people are devastated in many cases they don't have anything and you know, there's still some red tape that's gotta go through.
How long does it typically take to process claims? And I would assume in cases of natural disaster, Insurance carriers probably have ways to move faster to at least take care of the basic necessities. Oh, absolutely. Yeah. Every, every company will have some sort of a catastrophe team where they'll bring in, uh, a higher percentile of, of what they normally would have as adjusters in the marketplace.
Right. To have more boots on the ground to help get a homeowner back into, uh, a pre catastrophe, uh, state as quickly as possible. Right. I would tell the, the homeowner about there the, the average time of that claim. I, I know this may not sound like the best way, but it's gonna be as proactive as that homeowner is themselves, how quickly they've lined up their vendors, how quickly they get on the phones and start that claim process and get to the front of the line and have your documents and everything ready to where, when an adjuster comes out or you get a phone call and you can, you can turn things around as quickly as.
The claim process can be very streamlined, but if it's a lot of missed calls and a lot of phone tag because you're dealing with life and your adjuster is dealing with 10,000 people who have had the same tornado, same thing, the same hurricane, it becomes a challenging, frustrating, time consuming process with every carrier.
Yeah. Do you know when the last natural disaster we experienced in the state of Georgia was specific to. Um, so we just, we declare a, a carrier will declare a catastrophe based on just an overall percentile of how many people may have been impacted. Okay. It's not a natural disaster. Okay. Okay. All right.
Um, um, you know, I can remember a few of the hurricanes in recent years. I think, uh, I hate to say this cuz it's my namesake, but Hurricane Matthew came up through the Tampa coast and by the time it still got to Metro Atlanta, it was still a named storm. It was still, um, Either a tropical depression or a level one, something of that nature, right?
And when those storms come through and they have those names attached to 'em, it can mean a different deductible in your policy. Wouldn't have let, gimme some details on that. So you have a named storm. What happens to your deductible in some cases? Well, and the carriers will allow you the flexibility.
Yeah. And many carriers it's the same. Yeah. But you know, summit carriers will allow you to carry a higher deductible for a hurricane. And you're, you live in Roswell and you're like, well, a hurricane's not gonna get to me. Right. But what that does include is when that storm comes through here, and it's still a tropical depression, it's gonna fall under that deductible that you may have said at a percentile, 1% or 2% of your dwelling coverage.
Because you're like, I'm not going to need that. Right. And then you have a loss and you're looking at a deductible that's in the. Tens of thousands of dollars and it's really a, uh, a frustrating piece. Yeah, absolutely. We've got about a minute left, uh, in the segment. Thank you. This information has been so helpful to me, and I'm sure it's helpful to everybody who is listening.
I appreciate you giving us your time. When a, an insurance claim is filed on a home, does a homeowner have any requirement to notify the mortgage company? I would say that I would not notify my mortgage company if I had an insurance claim, and I just didn't know if I was right. Oh no, you do. You're not obligated to notify a mortgage company or anything of that nature.
What will happen is depending upon the size of the payout, you may get a two-party check, and when you get a two-party check, it's gonna be made out to you and your lien holder on your property. Yeah. Yeah. And then you're gonna have to contact your customer service center to get the address of where to send it.
Have them endorse the back and then you can go and endorse it for legality reasons. Yeah. Matt, thank you so much for being a guest on the show. I always pre appreciate the wealth of information you bring. We're gonna take a quick break. When we come back, we've got tips for first time home buyers and top tips for spring home maintenance.
Stick with us. We'll be back.