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Episode 023 - What Types of Insurance Do I Need for My STR?

insurance Jan 04, 2019
 

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Here are the books that Michelle referenced in today's podcast. Note, these are Affiliate Links.  Plus, you can try Audible for 30-Days Free and get your first audiobook free.  After that, you can pay by credit or purchase a membership.  With a membership, you get 1 audiobook and 2 Audible Originals each month for only $14.95 per month.  Prime members get 2 FREE Kindle books this month (January 2019). 

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[00:00] Over the last two centuries, nearly 90 percent of the world's millionaires have created their wealth through real estate. Here to tell you how you can ride this wave with less risk and less capital while creating greater income is your host, best selling author and speaker, Michelle Russell.

[00:21] Hi, this is Michelle, the master of money mindset and you are listening to the short term rental revenue podcast and in today's podcast we're going to be talking about insurance and this is a very, very important podcast. You need to listen to this because I'm going to tell you something that might scare you. I'm like, this might scare you. It you know, you might think you're covered. Your insurance agent might be telling you that you're covered, that you can have a short term rental within your property and you can have people in as guests and you can be making money off of it and don't worry about it, but if you check your policy, the majority of homeowners policies do not cover short term rentals, and if you are renting a property, it's even worse because a landlord's house may not be covered at all.

[01:14] If your guest does something to their home, this is a very important episode. Okay, but it really quick. I just wanted to touch on a couple of things. If you go to short term rental revenue.com and you go to our website there, you can click on and get a bunch of freebies. There's a bunch of freebies that you can download right there on the homepage there, ready for you, but also what's going to be on there? I think they said by 9:00 AM on Friday morning, so this drops usually around 3:00 AM Arizona time the night before Friday. If you go on the website by 9:00 AM Arizona time, I know everybody's like, what is the Arizona time? Arizona? We don't change our clocks and neither does Hawaii were always three hours separate from Hawaii. So right now in the fall we are on mountain time, so that will be mountain time.

[02:10] This coming January 10th at 7:00 PM mountain time, which is Arizona time and you can go right onto the website and register there. Okay. The webinar is going to be all about building your dynasty, your short term rental dynasty, and how to get it started, so this is going to be how to get a plan, how to create a plan for yourself so that you can get not just your monthly incomes and expenses covered, but create a retirement residual income that's going to keep coming in for you in the long run. So that's what the whole webinar about. You're gonna love it. You're going to have fun. So go and register for it and then guess what? Next week is the big giveaway. It's the beginning of the giveaway, I should say, because we're not giving it away. Then we're starting the contest next week, next Friday, and it's going to be super duper fun.

[03:08] I cannot tell you all the specifics about it. We'll we'll get into it next week, but I can give you lots of clues because everybody said, okay, first of all, I'm going to tell you it's a really cool prize because Amazon has these really cool cameras that you can link up with your smart clock. You can allow your Amazon guy to come into your house, it will open the locks for him and let him come into your house and then you know they can see him, slide the package in the package, doesn't have to sit outside your home. It can go right inside your house or you can use these cameras for your short term rentals, whatever you want, but it's really cool that you can link them to your smart locks and your smart lock system and with Amazon so that they can deliver your stuff and it doesn't have to sit outside all day long.

[03:57] So that's what we're giving away. A really cool Amazon, cameron, and it's going to have something to do with leaving five star reviews on itunes. So if you have left me a five star review on itunes already, you're already in on this and if you do it now too, you'll be in on this. The people who have left five star reviews before the start of the contests are going to get like a little bit extra. I can't go into the details because the girls are like how she meet up, but this is really going to be fun. I've never done a contest before like this, so this is pretty cool and like the prize, I was like, I don't want one of those. Like have you ever had like somebody brings it in and they go, okay, here's what we're giving away. And I'm like, wait, I want.

[04:44] I don't want that. That's pretty much how I was. So anyways, I wanted to just start off with the insurance. Now this is. Oh Man. I'm telling you. Insurance is one of those crazy things. You need it. Yeah. Got a habit and you think you're covered. Just because you're using airbnb or Vrvo, let me tell you, you're not, you're not covered at all. Everything is not covered in their. Their policy is. I'm gonna really quick read what the host insurance coverage says from airbnb. It says the host Protection Insurance Program provides primary liability coverage for up to a million dollars per occurrence in the event of a third party claim of bodily injury or property damage related to the airbnb stay. This coverage is subject to a million dollar cap per listing location and certain conditions limitations and exclusions may apply and you can review those all on the airbnb website.

[05:47] Here are some examples of what the protection. It doesn't say we'll cover. It's like this should cover this, that I mean just right there. That verbiage right there is kind of freaky to me, but it says it should cover a guest, breaks the wrist after slipping on a rug and brings a claim of injury against the host or a guest is working out on the treadmill in the gym of the apartment building and the treadmill breaks. The guest is injured and they fall and they bring a claim against injury against the host and the landlord. A guest accidentally drops their suitcase on a third party's foot in the buildings lobby and the third party brings a claim of injury against the host and the landlord. Of the host building, so those are things that they say should be covered, but then here are examples of what host protection insurance doesn't cover for sure.

[06:43] It doesn't cover any kind of intentional acts where there's liability or liability resulting from an accident. There's no accusations of slander or defamation of character. It doesn't cover that. It doesn't cover any damages from property issues like Mold, beg bugs, asbestos pollution, and it doesn't cover any auto accidents and the vehicle collisions. Okay, so then it does have like a bunch of links there that you can cover. But like I said, did you catch that when I read it? Instead of saying we'll cover things like this, it didn't say it will. It said it should. And the reason why it said it should is because airbnb reserves the right to accept or decline. It's all at their discretion and you agreed to that. So if you are just leaning on Airbnb or Vrb owes anybody's insurance by themselves, you are really seriously. You're just. You're standing on the edge of a cliff and you just had no idea how far down you can fall.

[07:50] Right now it's like you're blind volt. It's like the Netflix thing that's going on right now, right. It's like everybody's blindfolded and doing stupid stuff because of that, you know, bird box movie. We were like, no, don't be stupid. Don't, don't be doing anything crazy and don't be blindfolded. You need to know what's going on. So what I'm gonna do is I'm going to read you some examples of some things that can happen. God forbid any of this stuff happens. You and I both know that insurance is there just in case, but I want you to know I lost a home to a fire in 2005, my main residence and never in my life did I ever believe that I would lose my home to a fire. You never know like you, you can't, you can't make guesses about, you know, whether or not things are gonna happen.

[08:47] Luckily I was covered. I mean honestly and I never thought I would ever use that car. My car insurance, I got five. Of course I knew I'm going to need car insurance, but my homeowner's policy and stuff, I never thought I would ever have to use it like that. You know, I thought maybe a flood or whatever. Never thought I would lose every single thing in my home, so I just want you to know that it's better safe than sorry. It's better to have coverage. It's better to have good coverage than bad coverage. You need to always, always, always read your policies cover to cover and especially when it comes to an airbnb or any type of short term rental property because agents sometimes think they're giving you proper coverage and when you read the policy, there is nothing in there about it and there are horror stories all over the Internet about this.

[09:43] This very thing where somebody's insurance company said, yes, we will cover you here. We extended this policy, but then when they read it, it said nothing about having a short term rental and it literally would not cover them. So I'm going to give you some worst case scenarios, some worst case situations. Okay? But I want you to remember that your regular homeowners policy will not cover you because you are now a business operator. So you think that just having a or even a landlord policy, you think that having a landlord policy or a homeowner's policy is going to cover you. It will not. And I want you to read it. Okay? So now I'm going to read these all these scenarios for her and I want you to think carefully about how these will be covered under your current policies and under, you know, the airbnb one that should cover it.

[10:46] Okay? A guest starts a fire in your kitchen and your whole place burns down or even part of it burns down. Write a guest child drowns in your pool. A guest is injured at your buildings. Jim, your garage door shuts and damages a guest's car, I guess trips on an uneven tile in your apartment and falls and breaks her leg, I guess becomes ill from your coffee maker. Not being properly cleaned, I guess, steals your TV, your furniture or your appliances. A guest trashes your house and puts graffiti all over the walls. And the furniture, a guest damages your home in some other way, shape or form a guest does damage to a neighbor through a community wall that you share. And I want you to think about that one for a moment too, because remember when it comes to liability claims and things like that, there's a lot of stuff you can do to prevent these of situations just by putting a crap load of stuff in your house.

[11:58] Rule blocks. It's like, please be kind to my neighbors, you know, p, please be quiet after this such and such time. Please don't allow your children to climb on the walls between my house and the neighbors house. I mean literally just having things like, please be a kind, you know, respectful neighbor and you know, don't bother them or don't park in their space. Things like that can prevent a lot of trouble later on. If you just have things written down, it'll show that you had all the intention of being a good neighbor. So you can prevent a lot of these things. Not, not that you can prevent the lawsuit if somebody wants to be a jerk, you can't prevent people from being jerks, but you can show that you had the intent of protecting your neighbors. I guess damages forced you to cancel your future reservations and make repairs so you lose income.

[12:52] Now that's a big one to write. A guest causes your Hoa to fine you. They do something that is against your homeowner's association and they the Hra sends you a letter on, you're going to be fined. A storm damages your property. A flood ruins your business, your office, your short term rental, your computer, anything like that. Flood insurance is absolutely necessary, especially in most areas. The car you use for your bnb gets into a wreck. Now, if you're hosting events like weddings and parties or if you're doing any kind of catering or any type of, you know you've got maybe a gift shop or something, you'll need additional insurance in addition to all these things. So I am not going to cover that here. I don't do events, but there are specific insurances for events for people who are doing any kind of catering. Those types of insurances are all separate two and you're going to need additional ones if you have any kind of store, anything on your location, that's a completely different bird.

[14:04] You know, they, they want you to have each and every type of business that you do it. I became really aware of the differences in insurance when I started flipping houses in Florida and doing a bunch of short term rentals now and investing in Florida real estate now. I lived in Arizona, but I've never. I've never really, really dug the, the heat here in the summertime. It's really, really hot in Arizona in the summer, but my husband Adores Arizona. He never wants to leave and I adore my husband and I never want to leave him, so I'll take off and go to Florida and when my parents were alive, my dad and I did a lot of flipping and real estate in Florida and when we first got there you could just use state farm and that's who I used for my rental properties in Arizona was state farm.

[15:01] I had a state farm policy for my home and for my car and I had, you know, the little bundle and when I got a rental property, first thing I did was call my state farm agent and said, look, I picked up a rental property and boom, she was on it and I literally didn't have to do anything. I know her. I still to this day know her phone number, but I would just call her up and I'd say, Joanne, I need this covered. And she would do it. Her girls would do it. They would write up a policy, send it over. I'd send a check in. It was actually very inexpensive to, for a full year of renters insurance as a landlord here in the state of Arizona. When I got to Florida when it first got there, state farm was available there now that I couldn't use my Arizona agent in Florida had to have a different agent, but what was really crazy was after, I think it was David, I'm trying to remember which hurricane, but there was a hurricane and state farm just said, we're out.

[16:01] We can't do this anymore. And a lot of big, big companies have pulled out of certain states when they, you know, when they lose a lot of money, they say that's it. We're not going to do any more homes in that state. And what happens usually right afterwards is chaotic. Just imagine all the big companies you know, pulling out. So what happens is all these little fly by night companies pop up and we got a real estate broker who had searched for different insurance policies for us and their regulation and in Florida was really different too. We started to realize that what our agent knew to cover was way different. Like here in Arizona, it doesn't matter if you, if you have a rental property, it's a rental property and these laws can change and stuff, but in Florida it made a difference whether you bought the home and it was just an empty home and you were waiting to put somebody in it.

[17:03] If you bought it and you were going to fix it up and you had people in their like contractors and everybody fixing it up. That was a different type of policy. There was a different type of policy. If it was a longterm renter and you had a longterm renter in there, there was a different type of policy. If you had any personal items in there. So let's say you had a partially furnished apartment that you're renting out. That was an entirely different. It literally, I mean every. If there was a huge questionnaire, basically every time you were trying to figure out insurance for your Florida properties, you had to go, okay, well right now we bought it to fix and flip it and so right now we're fixing that. But once it was done, you had to change the insurance immediately and not only that, the insurance was super expensive.

[17:55] I'm talking for like a few months or sometimes a month would be as much as an entire year in the state of Arizona. It was crazy. They were reaming people. But we would just pass those expenses off. I mean you can write them off, but it's the cost of doing business. But at the same time, insurance is like that. You have to know and you have to read. Don't just trust an agent that tells you this is covered. You have to know what you want covered. So what does all this mean? It means you need insurance and you need more than one kind of insurance, okay? To cover your butt, you need to have a few policies. Most likely you can get away with having airbnbs, but that is not the only insurance you want to use. You want to have another policy and just like a car, you're going to need, you know, different types.

[18:50] You're going to need like a comprehensive and a liability. So something that's going to cover the property in its contents and then something that's going to cover, you know, if people sue you for some kind of injury or something, so you're going to need that. But you need liability insurance specifically the covers guests, short term rental guests, okay? So make sure it's not just a guest that you invited in in your home because a guest that you invite into your home, like your friend down the street or something that is a different. That's a different animal. Like I said, I wasn't go. It's just a different bird. It's a different animal because when you have a business, it's not really a guest, it's a paid person. They paid you to come into your home and therefore it's a business in the eyes of the law.

[19:44] It's a business. And if you have coverage that says a guest, what that means in the eyes of the law is someone that you invited your home to come and visit you. They were not pain. So a short term rental guests is completely different. It's a person who paid you as a business. Okay? So you have to think of like the law would think of it. So make sure that it specifically covers short term rental guests. That's what, that's the verbiage you want to find. Okay? You want to make sure that they know that you got money to allow these people into your property or the property that you're in control of. Okay? So it needs to be specific and it needs to cover their guests, which is a little bit more. And that means that if they invited people into your house with your knowledge and consent or without it.

[20:46] So let's say that, um, you've got a guest who's coming in, they say there's just two of us, don't worry. And then next thing you know, like there's a party and there's 20 people and they cause a bunch of damage. Well you only knew about two of those people and the people who may be on camera for doing the most damage or people that your guest invited in. So you have to make sure that it, it covers them too. Okay? So make sure it does. And remember, it's those liability coverages are for people get injured most of the time it's for a physical injury, even if there's a terrible misshapen, somebody you know, dies or if there's damage to their property. So maybe something like the garage door, I think we mentioned crashed in on their car, some, some kind of injury to their property or themselves.

[21:41] And you're going to be probably sued for some type of negligence. Okay. So that's what that's going to cover. And you want something that covers your neighbors if the guests do harm to them or their property as well. Okay. So that's, you know, just remember the house rules book. The more you put in there, the more covered you'll be. Alright. Another type of insurance you need is flood insurance. So it seems funny for people like me who live in Arizona to have flood insurance, right? Because we don't have rivers or lakes or anything like that unless you go up to some other parts of the but not here. Down in the valley there's nothing. So why would we have flood insurance here? When it rains, it floods. The ground is so hard, it's like cement so it doesn't seep down into the ground like, like most places when it rains, you know, you, you think you get puddles.

[22:39] We get floods entire streets, floods, entire highways. Flood. I mean it's crazy when it rains here we get these washes and people from other states. We'll see there'll be a dip in the road and they'll say do not enter when flooded. And what that means is if it rains and there's like a little water going over the road. People from other states always. It's always somebody from Minnesota or something or I or someplace they think, oh yeah, you can cross that. They have no idea how deep it is or how powerful it is or how quickly flash floods occur. And so they'll just cross and into the, into the wash and the wash can just. I mean suddenly there'll be a big gush of water and then boom, their cars downstream. I mean it's crazy. And these are dry dry beds that never had water in them for months and months and months.

[23:38] We won't have rain. And then we do so even out here in the desert, we get flood insurance and I know that sounds crazy, but you need to look at where you are and you know, go historically, flood insurance is not. Most people, it's not included in their regular insurance policy. And they'll say, oh well it covers this and this and this, but it won't cover flood insurance. Our friend who lost her house in Hawaii to the volcano, there is no real such thing as volcano insurance. Okay? But her home was covered by fire insurance. So what was really critical for them where those drones that the government had flying around because they ha, they got footage of the houses burning and then they could prove that the house burnt down before it was covered with lava. You know, now it's 15 feet under lava, but first the house burnt down and so the house is covered, but lava would not be covered.

[24:44] So there are like, you really need to know what is in your policy. You really need to know what's going on and what, what can happen. And you need to know potentially what could happen and just cover yourself. If it doesn't happen very often, chances are the flood insurance will be really cheap. So you know, you don't have to worry about it, but better safe than sorry, one of those things, right? What you need to do, you need to know specifically what you want covered. And a lot of those questions in the beginning are questions that you can ask your insurance agent and say, am I covered for this? Would I be covered for this? Would I be covered for this? Those are, you know, they're a great list of questions to have because those are things you want to be covered against. Okay? But know what you want covered and then know the value of what you want covered.

[25:37] So there's like all these little places online and little insurance companies that are specifically made for Bnbs. And there's one, um, oh, I'll remember in a second what the name of it is, but they have a $10,000 policy with a $250 deductible for $5 a night that they give you. So $5 a night doesn't seem like it would be a lot of money, but it kind of is. If it's only covering $10,000 worth of things to me, unless that property is pulling in enough money to substantiate the $5 a night and I would have to look at all the contents that I have inside there because some of my small small properties have way more than $10,000 worth of stuff in them. Now. If I'm just doing it to cover the liability of something being stolen, then that's fine. The 10,000 I'm sure would cover that.

[26:38] But think about this. I mean if it's. If it's an unprotected area and somebody could take a truck and move your stuff out really quickly, how much stuff can they get? And if they were to break the windows because they cover windows and they cover all this stuff and they say, we cover all this stuff, but think about how much windows are to replace. Sometimes windows are very expensive to replace just the broken window, especially if there's tinting. If it's double paned. I mean there's a lot of damage and just a window can be a lot of money or a patio door. Um, we've had patio doors get shattered and we're talking like a few thousand dollars to replace a door. It's crazy the amount of money those things are. So you want to make sure that you know what you want covered and you know the expense of all the things that you want covered and you want that limit to cover all of those things.

[27:34] Not that that would happen. Hopefully it would just be a door. Right. And if you think that's going to happen and you're like, okay, I'm cool with $10,000, that'll cover, just adore. But if there's something catastrophic you can probably get an umbrella coverage that would pay for things that you know, weren't covered. But at the same time I like to make sure that I have enough coverage on each of my properties. So maybe a little caseta down in Tucson. Yeah, $10,000 would cover that place. But another one of my other properties with three bedrooms, with the furniture and all the equipment that we have in there, the, the electronics, the televisions, the blocks for the, you know, the plugs and I mean the little bluetooth speaker systems and stuff. No, no, no. Just those few things that would be, that would take that $10,000 already and it will be gone.

[28:30] So make sure you know what you want covered and making sure you know what it costs to replace those things that you want covered and know what you want the deductible to be, what you can afford to pay. Remember, you want the best policy that you can afford with the best company that you can afford to pay. Okay? Don't be cheap. It's your business and your business. You need to cover yourself. It's important. It is tax deductible, but obviously you're still going to be out of it in your pocket. So you need to know what you are willing to spend. No, what you can afford, okay? But there's a lot of options to way you're going to need to wait what you need to cover, right? And what their coverage is, the limits of liability, just like the one that we read with Airbnb, right?

[29:20] It had like the limitations. You want to know what all those limits are. You want to know any kind of exclusions. It's like, we cover this, this, but not this. You want to know what those things are. You want to know what the deductible is like I said before, and then the cost. That's going to be the last thing you consider. You're going to take all of those options and you're going to get the best policy you can afford with the best company. Okay? It's really important that you do that because again, this is your business. So I already said that there are different types of policies and you should have liability. Now, like I said, Airbnb has their little liability thing and it should cover a lot of stuff, but it won't cover everything. So you will want to make sure that you have some kind of coverage that goes over that umbrella over that.

[30:14] You might want flood insurance, depending on where you live rights. You should have some kind of comprehensive commercial insurance that's going to be the main kind of insurance that you're looking for because you are a business, so it is a company, so remember it's going to be a comprehensive commercial or some, some people call it commercial insurance, some people call it comprehensive commercial insurance, but that's the type of insurance that you're looking for and there are now because there are so many short term rentals out there, there are now a short term rental income, property insurance policies, but you want to look at them. You want to look at the coverage and you want to remember to look at all those different things that you want to have covered. Ask Your questions beforehand. Will it cover this? Will it cover this? Will it cover this?

[31:05] Okay, and again, your regular homeowner's policy, your regulars, landlord's policy will not cover most of those questions that I read in the beginning. They will not, and your agent may tell you that they will. So ask them specifically where in your policy these things are covered. If you can't find it when you're reading it yourself, go to your agent's office, sit down with them and asked them to specifically point out to you exactly where your coverages for any of those questions that we asked. Okay? You want to make sure they might not be doing it on purpose. They might think it's covered, but you want to make sure that it's covered. Okay, so now commercial insurance, like I was saying, that usually covers property and liability, a little bit of liability. Your property coverage. You want to make sure it covers your building, your contents, your homeowners shouldn't cover.

[32:07] If you're not renting it out and you are the only person living there, your homeowners should cover your home office, but if you have people going in and out of your home and a guest which is a paid guest, I should say, comes in and something disappears out of your Home Office. You want to make sure that's covered so you. You've got to make sure that your verbiage is very clear on who and what and how. Okay, so specifically you want to make sure that those things are covered in your business, whether you do it with one policy or another, it doesn't really matter. Just make sure they're covered and you want to have liabilities. So like we said, if you're ever sued for any kind of injuries, usually it's an injury. Okay? There's also something called business income insurance and I really, really recommend that you make sure that you have that.

[33:00] That covers a temporary loss of income and it's usually due to some kind of damage. So let's say, um, if you're, you know, there was a fire in your home and things have to be replaced and you have to shut your airbnb down for a month or whatever while they're fixing it, it's going to cover that income loss. Also, if you're the person who does all the work in your business, if you're the person who does the cleaning and the painting and the hosting and you're very, very active as a host in your business and you're there all the time with your guests and you're the one who does the majority of work, you might want to think about getting some kind of disability insurance just in case you get injured. So if you fall and you can't get up and you can't take care of a guest or you can't make the beds or you can't do what you normally do.

[33:52] If something happens to you, disability insurance will cover that and remember all these types of insurances. I know it sounds like, wow, I need a lot of insurance and and you do, but they don't have to be very expensive policies and your business will cover it. All of this is tax deductible because these are business, legitimate business expenses. You just want to make sure you cover your assets. Okay? Kiyosaki, he used to always say that. He goes, make sure you cover your ass sets, cover your assets always, and your business is your asset. It's the way you make money and you have to do it smart. You have to cover yourself. Okay, so disability insurance and if you're using airbnbs and stuff like that, remember when it comes to, especially when it comes to the liability and stuff, you can get these big umbrella policies.

[34:45] Umbrella policies usually cover something catastrophic or all the extra little, you know, when everything he has hit its limits, it's gonna cover all that. So those policies are really great. They're basically saying whatever, you know, whenever you hit your $100,000 limit on this, we come in and we take care of the rest. So that's a really good policy to have when there's a property and it says, you know, let's say the house is worth $250,000, well they might give you a $250,000 policy and the next jump was a really big, expensive junk jump. But you said, okay, I'll take the 2:50. If your house did burn down, it would probably cost you more than the 2:50 to build it and like, you know, just with the price of everything and the price per square footage and stuff, but an umbrella policy would pick up where that other policy left off.

[35:39] Okay. So if there was something catastrophic umbrella policies do that. One thing I suggest to, and this is kind of a, this is the tip and a trick. Okay. So when you have guests make a reservation, always suggest to them that they get some type of vacation cancellation, insurance, and even have links to your favorite ones. And if they used American Express, American Express has cancellation insurance included with their card. So I always recommend people pay with American Express if they can, where they can and that they get the vacation cancellation insurance. I'd love American Express's, but there's other ones too. There's a bunch of different ones out there, but when you suggest that to a guest, it's pretty cool because it does something. It lets them know that, oh yeah, they've got a strict cancellation policy so it puts the ball kind of in their court and says, Hey, what if I have to cancel?

[36:46] They're not going to give me my money back. When you don't have any kind of cancellation insurance. It's really weird because how many of you, and we'll actually. I asked this question online this week, how many of you have had guests who want to cancel at the last minute even with your strict policy and they hold over your head a review like if you don't give me my money back, even though you had a strict cancellation policy, now a lot of people will just say, screw it. I'm not going to do it, but here's the deal. If they paid, they can still leave you a review and if they leave you a crappy review, you can have your little rebuttal there and say they didn't even stay there, but why? Why? Why risk that? Because people are going to have to, they're going to see the, the bad review is going to make a mark on your stars before they get to your reviews.

[37:36] They see your stars before they even get there. So if your review looks bad now, if it's the only one you've ever had, but if you can nip that in the bud, if you just suggest to them giving vacation cancellation insurance, because when you do that, it basically says, oh, she's not going to give you my money back if I cancel, I better get this insurance or I'm not going to be able to cancel it. Really, it puts, it sets like a psychological precedent in their head and it lets them know that you're not going to take a cancellation and just hand them their money back because if chances are they had to cancel and they call you say, Gosh, that. That's really sad. Did you get that cancellation insurance that I recommended to you? Oh No. Oh, that's kind of sucky because you know, we have a strict policy simply because it's, you know, it's what we do.

[38:34] We can't just fill those nights up and on such short notice, so I'm really sorry about that. I wish you had gotten that. I mean, that's why I usually suggest it, but I wish you luck. So sorry. Boom. That's it. That's all you know, Mike, drop and walk away. I mean, it does set that precedent in their minds. They are less likely to come after you and threaten you with those bad reviews. And remember always to. This brings us back to one of the golden rules is always, always, always, always, always use whatever platform you're using their messaging system. Do not ever take phone calls from people who you know the guests that you have. You are always in communication with them. If you're there, obviously it can be in person, but if you're in person, you want to record everything so it's so much better.

[39:30] I, you know, I do everything remotely and everything on Airbnb's platform, always through their text message. If somebody messages me outside of the AIRBNB platform or if they've called my phone or they do anything else, I immediately messaged them on Airbnb's platform and I asked them, what's wrong? You know, this is the only place we communicate. I will communicate with you here. I don't take business. You know, messages on my personal phone. You need to be that kind of person because what that does is it it has you have that whole conversation recorded right there and it's literally your best friend when it comes to communicating with Airbnb and getting their pad review removed because B and b can see if they're holding something over your head. Don't ever reply to them on any other platform, but the airbnb platform don't even reply. I can't talk here.

[40:36] I'll talk to you on the AIRBNB. Nothing. Okay? Because if they think you can see it on there, if they think you're going to answer it in any way, shape or form on another platform, they will keep using that platform and that's where all the bad stuff is going to be done and you want to have as much proof as you can have. If ever it came down to it, it needs to be on the Airbnb or whatever platform that you're using it and he used to be on their platform. It needs to be recorded there so that they have proof and they can see it. So always, always, always do that. Okay. So the company that I was thinking of is called my property protect.com and I got that from somebody in one of the groups on facebook, one of the airbnb groups and they said, oh, it's only $5 a night.

[41:25] They have a $10,000 limit and a $250 deductible and that's great, but that I need more than that. I'm like on some of my properties it's okay, but I need more than that. A lot of people ask me what I use now, the majority of properties that I liked to rent or buy are the ones that have huge homeowner's association fees attached to them and they do all the work for me. Okay. So these are the properties I use. Their Hoa includes a lot of the insurances, the liabilities, their company covers all that stuff. So I never have to worry about it. I don't have to worry about bookings, I don't have to worry about cancellations, I don't have to worry about any of that stuff. And that's how I like to roll. Okay. Having said that, the ones that I have to handle, I've done all kinds of weird things, you know, gone to the brokers and, and they change names constantly so you'll have one policy for a year, maybe two years and then it changes to a whole different company because the companies in Florida or in and out of business like, you know, most people change underwear.

[42:42] It's just always going back and forth. But I did have a friend who recommended a company and I haven't used them for very long, but I did check them out on the better business bureau and that's where, I mean I love checking oil companies on the better business bureau. They've been around for a long time. They have a lot of really good reviews on there and they had one person who had a complaint and then they canceled the complaint when they showed them the proof that they had offered them a six figure check. So the person was just trying to get a lot of money out of a very, very old property and they weren't going to be able to do it. So what's really cool about this company is they handle, they handle short term rentals and they know the verbiage that you want and you can tell them all the things that you want covered and they will give you quotes on the types of insurances that you want included.

[43:44] So for instance, if you say, okay, I would like to have, you know, some kind of business income insurance on it. But I also want to see, you know, how much would it be extra if I had a little disability in there, blah, blah blah. So you can, they'll, they'll, they'll make it like a big stew and you tell them the ingredients and they'll quote you prices with without blah blah, blah. So I really liked this company. You can find them online, there are proper ensure. And like I said, they're an a plus on the better business bureau. They've got a lot of great reviews. My friend recommended them to me. I haven't used them for very long and I'm only using them on one property right now. Just checking them out. And the other policies and the other properties haven't come through yet. So I'll probably switch over and use them.

[44:34] But here's the deal. You need to check out your own insurance companies. I know people love recommendations. I don't usually like to give recommendations only because I feel very responsible if, if somebody asks you over, I really do. And I don't want that to happen. A lot of this is a trial and error. A lot of this is just learning as you go look this stuff up and do your own due diligence. Trust no one be like thex files guy, right? Just trust. No one. Just do it yourself. Those kinds of things are really, really good because it's just good practice guys. It's just good practice to go out there and do a little research yourself. You know, you lean on somebody else and you get screwed. The only person you have to blame is yourself because you trusted somebody else. That's the truth with anything.

[45:27] You know. I had a friend that I invested some money with him and it was right before the crash and he invested it in a place where it just, it, it was gone, the money was gone and we're really good friends and we're still really good friends and every so often he'll say, even now, all these years later he'll say, I'm, I am so sorry about that money, blah, blah blah. And I'm like, why do you bring that up? Why do you even? And he's like, well, I just feel responsible. And I said, look, no one is responsible for my money but me. That's my mistake. That's your mistake. You had nothing to do with it. Literally, I need to do my due diligence and if I screw that up, then that's on me. It's not on you. If the market crashes, that's still on me, not on you.

[46:19] I should've been more careful. I should've seen the warning signs. There's these are things that you are going to have to do as a business owner. So as your friend here, I'm, I'm, I'm being super honest and I would love it if you went to the short term rental revenue.com website, downloaded some of those freebies signed up for the Webinar, and let's get your plan for the future set so that everything will be okay if God forbid anything ever happened to you. Okay? Because we want to take care of our families. That's our. That's what this is all about. It's all about taking care of ourselves and our family trust. No one. I remember I just didn't get that bumper sticker. I remember they used to have that bumper sticker for the x files things, but anyways, you guys have a great day. God bless you going, bro.

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