Insurance help for real estate investors

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When it comes to clients with multiple real estate investment properties, Shawn Woedl knows how to make life a little easier with solutions designed for their specific needs

EVERYONE ELSE may be “diving out,” but REInsurePro is swimming strong in the real estate investor market – and is offering creative solutions to make the investment process as straightforward as possible by taking care of the insurance element. “More and more retail agents are finding us as a solution when other insurance companies are just diving out of the market,” said Shawn Woedl, the company’s CEO. “We pride ourselves on being a solution for our retail agents and their investor clients.” The company started in late 2020, partnering with independent agents across the country, though the program’s roots go back to its days in real estate investing and property insurance, which started in 2008. The program originally targeted one-to-four-family locations, but it now casts a larger net, as a response to concerns from retail agents and their investors. Now, it can accommodate up to 20 units per location. “We do vacation rentals, we do mobile and modular homes, we do lender-placed alternative, non-performing notes,” Woedl explained.

REInsurePro is a national program manager with expertise in building specialty programs for niche property risks. The company’s flagship program for real estate investment properties is the largest and most comprehensive of its kind for tenant-occupied, renovation, and vacant properties up to 20 units. REInsurePro’s monthly reporting form provides flexibility for investors and simplified billing for agents. Its state-of-the-art technology platform simplifies the process of quoting, binding, and servicing these complex clients.

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“Insurance is the last thing that anybody wants to think about when they’re going through a deal like this. But we try to make it as simple as possible”

Shawn Woedl, REInsurePro

The appetite for investment properties shows no signs of slowing down, even amid a difficult real estate landscape in the face of rising inflation and rate pressures. According to The Washington Post, in 2021, nearly one in seven homes sold in America’s top metropolitan areas was bought by an investor. CNBC, citing data from CoreLogic, found that home prices were up 10 percent in the 12 months ending in October 2022. Meanwhile, stock prices declined more than 15 percent over the same period.

In its annual Emerging Trends in Real Estate 2023 survey, PwC reported that “investors are still buying high-quality properties.” That busyness has been seen at REInsurePro too. “It’s as busy as we’ve ever been,” Woedl said. “I will say that there’s probably more cash deals going on than ones where there are lenders involved … we’re seeing opportunities from our retail agent partners from other carriers that are stepping away from the property market. They’re finding us as a solution.”

“Insurance is the last thing that anybody wants to think about when they’re going through a deal like this,” he said. “But we try to make it as simple as possible. So it’s one less headache.” This can include monthly reporting on properties, with no long-term commitment to the coverage. They also cover properties through all phases of occupancy, “collectively housing them on one single schedule for investor clients,” he said. “Just a click of a button.” The insurance also travels with investors as they go through a journey with their properties.

At first, there were two distinct parts of their program. One was for buy-and-hold investors, getting properties occupied and using that location for a rental income. Then there were the fix-and-flip investors, fixing up a property to then rent or sell. That’s what Woedl called his lightbulb moment – the company then built a program that would “accommodate all phases of occupancy, which is a huge advantage instead of what most carriers require,” he said. When an occupied location turns to a vacant property, an investor has to cancel that original policy and write “a whole new policy, and it’s a bunch of paperwork and a bunch of time,” said Woedl. With the REInsurePro program, however, “it’s really just a flip of a switch. They change the occupancy. The premium changes

“Investors are trying to find any way they can to stabilize their costs,” Woedl said. “One way to do that is to show an insurance company that you’re a very good risk by not only enforcing renter’s insurance but also by handling it yourself.” Woedl said he saw “a pretty drastic shift about four years ago,” when it came to the most regular claims he received. Back then, theft and vandalism topped the claim list. “Now it’s really fires, and it has been pretty consistent,” he said.

Wildfires have certainly been playing their part with the increase in claims, but “really it’s the tenant-caused fires, or it’s just minor ones,” like a kitchen fire that can cost between $20,000 and $30,000. One of the most infamous examples he heard of at the office was of a tenant burning a Christmas tree for heat. “It’s like, don’t do that, they’re extremely flammable!” he said. Indeed, that’s why this form of tenant insurance is so vital – because an investor has no control if a tenant causes a fire. “Let’s pass that responsibility on, at least a portion of it, on to the negligent party, and help to stabilize that investor’s property rates over time,” he said. “The Tenant Protector Plan, or any renter’s insurance policy, is a great way to do that.”

Real estate agent showing a mature couple a new house.

Published 17 Jul 2023

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People

“Investors are trying to find any way they can to stabilize their costs”

Shawn Woedl, REInsurePro

Appetite for investment

Ease of coverage for investor clients

But how is Woedl’s company making the process easier for investors?

Beyond the regular coverage, the company offers additional features as well. But its most popular product is the Tenant Protector Plan, its version of renter’s insurance. So, what’s the difference? “We allow our retail agents to sell that coverage directly to the investor, as opposed to the tenant,” he explained. “The investor controls the coverage and pays that bill at the same time as they do their property and liability coverage. And most of those investors will use that as an added benefit to renting from them.” So, rather than placing the onus on the tenant to get their own insurance, and making sure it is in force – a headache when your investor has so many properties to contend with – investor clients can control that cost, which they pass on to their tenants.

Popular coverages

Woedl pointed out that investors often do not realize how many options are available to them when it comes to insurance. “Insurance is not one size fits all,” he said. “They really can tailor their insurance to exactly what their needs are for their investment portfolio.” Working with an independent insurance agent who has access to multiple programs and markets, “they can tailor their insurance coverage specifically to what their needs are. That way they are not overpaying for coverage and, at the same time, they’re not leaving themselves exposed.” REInsurePro removes the hassle from the process, provides tailor-made solutions, and makes sure that clients see insurance as a genuine value-add – a good investment, you might say.

Tailor-made solutions

1. Boise, IDAHO 2. Houston, TEXAS 3. Dallas, TEXAS 4. Las Vegas, NEVADA 5. Atlanta, GEORGIA 6. Orlando, FLORIDA 7. Tampa, FLORIDA 8. Spokane, WASHINGTON 9. Chicago, ILLINOIS 10. Austin, TEXAS 11. Columbus, OHIO 12. Lakeland, FLORIDA 13. Ocala, FLORIDA 14. Birmingham, ALABAMA 15. Durham, NORTH CAROLINA 16. Charlotte, NORTH CAROLINA 17. Colorado Springs, COLORADO 18. Denver, COLORADO 19. Raleigh, NORTH CAROLINA 20. Phoenix, ARIZONA 21. Seattle, WASHINGTON

Source: Norada Real Estate Investments

Top 21 places to invest in real estate

slightly, because it’s a monthly reporter, but it will accommodate through all phases of occupancy.”

Source: Zippia

Real estate investor demographics

68.4% of real estate investors are male and 31.6% are female

64% of real estate investors have a bachelor’s degree, 16% have an associate degree, 9% have a master’s degree, 6% have a high school diploma, and 5% have other degrees

63.8% of real estate investors are White, 17.6% are Hispanic or Latino, 8.6% are Black or African American, 5.3% are Asian, 4.1% are unknown, and 0.6% are American Indian or Alaska Native

71% of real estate investors are 40+ years of age, while 22% are between the ages of 30 and 40, and 7% are between the ages of 20 and 30