Property Management Blog

Proper Insurance Coverage for a Rental Property


Bob Preston - Monday, April 15, 2019
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The following blog post is a time-stamped, full transcript of Bob Preston's interview of Chris Mahlberg from the Farmers Insurance Office of Kirk Miller in San Diego, CA. The episode was published December 16, 2017 and published on the Property Management Brainstorm Podcast. The audio version of this podcast can be found at this link on the North County Property Group website, as Episode 2 -Obtaining the Correct Insurance Policy for Your Rental Property: Property Management Brainstorm Show.  


Bob Preston:          00:50            Welcome to the Property Management Brainstorm Podcast. I’m Bob Preston, your host of the show, broadcasting from our studio at North County Property Group in Del Mar, California, and today we're going to talk and share not necessarily a very exciting topic, but it is related to property management and rental homes and that's a huge consideration and I have today with me for Chris Mahlberg from the Farmer's Insurance office of Kirk Miller. That's the right way to introduce you, right. That sounds about right. Chris is here in San Diego area and thank you for joining us. And I wanted to invite Chris to join us at one of our episodes so we can discuss the importance of having the correct insurance in place on your rental property. It's really important. It can be a bit confusing and we will have a chance to get it straight from a pro. So Chris and I met earlier this year. You're sort of a regular visitor in our office. You come in and talk to our team and brief us and over the months you've become our go to guy if you will, when a client wants to get the right insurance in place. So Chris maybe you could start just by briefly telling us about yourself and your business and how people can contact you if they wanted to after the episode. 

Chris Mahlberg:        2:09           Sure. I've been in the insurance business for seven years, working mainly at Farmers and one thing that I like about Farmers as we have a little more flexibility. So if it's something that Farmers can't do, we can go to other companies like a broker. Okay. One of the things that I learned is I get a lot of my referrals from State Farm and AllState agents and they'll send me something that they can't do, their company can't do. Interesting. And vacation rentals was one of those things that kept coming up and that's kind of why that was your point of entry, what I wanted to talk to you about, because it's somewhat difficult. People have all their policies with State Farm and then they want to make this investment in turning their rental property into vacation rental and there's less options out there so. 

Bob Preston:         3:05         You bet. Okay. Well today what I'd like to touch on is kind of both sides, right? Long-term rentals and vacation rentals. So we'll get into both, both of those. And so maybe, um. Okay. So how would they contact you if the listener wanted to reach your? 

Chris Mahlberg:      3:19        So if you have any questions on your rental property whatsoever you can contact me. My cell phone is 858-692-9509. And that's the best way to reach me at 858-695-9509. I'll do my best to answer question. 

Bob Preston:          3:36            And if they were to google it, it would be Farmers Insurance of what Kirk Miller is great. And of course anybody could contact North County property group and we can give you Chris's contact number as well. So. Okay, let's dive right into the heart of the matter of why it's important to have the correct insurance in place on a rental property. And maybe Chris, you can start telling us about what is the right insurance to have in place when you've got a long-term rental and buy long-term rental, I mean an unfurnished property that you're seeking attended on for 12 months or longer. Kind of a typical property management rentals scenario.

Chris Mahlberg:        4:13          Right. So that's the landlord policy. And typically someone may switch their homeowners over to a landlord and that's important. A lot of times people forget to do that or they don't tell their agent, but they're two separate policies. So while they look the same on the front page, you have your structure coverage or other structures, your personal property, things like that. Uh, the back of it, the whole 100 pages of wording that the insurance company has is different for a homeowners policy versus a landlord's policy.

Bob Preston:        4:50           We get that a lot. An owner will send us a copy of the proof of insurance declaration page and we'll look at it and they may have even named us as additional insured or additional interest. This is a regular home owner's policy, which doesn't cut it right?

Chris Mahlberg:         04:59            It doesn’t, no, because if there's a claim scenario, they're not looking at that front page, the declaration that says, Hey, you have x amount of coverage on your home. They dig deeper into the back part of it with all the real nitty gritty details and there's, you get into a point where if you don't have the right policy, there's a chance that you won't have coverage on whatever happened. So you want to make sure that those details are all right and in line. 

Bob Preston:        5:35           And what is the right kind of coverage you would want if you were renting your home as a landlord or using a property management to rent your home?

Chris Mahlberg:       5:43          So the key coverage, obviously you want to rebuild your home, but the differences between that and the homeowner is we're covering loss of rents instead of what the cost is for you to go to a hotel while you're rebuilding. It's the cost to replace your rental income and also put your tenants in a hotel or take care of them or their families when they're out of the home for a claim scenario. And then the real key is making sure you have your liability on that property because anything that happens there, even though you're a landlord and you're not always there, you don't know who's there, who, who your tenants are inviting over. If something happens, they're going to name you as the landlord and a liability lawsuit.

Bob Preston:          06:33        Right? So let's touch on that just a bit. If I'm a homeowner and I don't have the proper rental insurance in place and you don't know that I'm renting it to a tenant and there's a liability claim, would I be covered?

Chris Mahlberg:         06:48         That's a tough question because I've seen it where insurance companies realize that you have the wrong coverage and they do cover it, but they have the opportunity if they wanted to try to get off of it, you know, they can look at that detail and say, hey, this isn't the right policy. You didn't tell us you have. Yeah, exactly. So you just don't want to have that scenario where they can potentially not cover your claim because the, the details and the policy aren't right. In my experience, if it's a simple oversight like homeowners to a rental property, maybe they forgot to tell insurance company, they have a little bit of leeway, but it also depends on the severity of the claim. I mean, they might cover something like that if it's a smaller claim, but if you're getting a claim or they know they're going to have to pay up into millions of dollars, some serious injury or something, they're going to say, wait for us financially it makes sense to try to kind of twist this and we know that they have some room to do that because it's not the right policy. So, but you just don't want to be in that scenario.

Bob Preston:         08:03        Yeah, I rented your house is always a risk, so you want to make sure you're protected as a, as the homeowner. Yeah. Okay. So two key aspects here. Then making sure your insurance company knows you have a tenant and, you call it a landlord policy. So that does two things. It protects you from potential liability of at tenant coming after an owner, right. If there's an accident and also covers rent, if something should happen at the home that makes the home uninhabitable. Right. That's it. Okay. Now I've seen it called other things on other policies. So for example, a rental dwelling, rental endorsement, rental writer, some people call it or are these things essentially the same?

Chris Mahlberg:        08:49         You want to make sure it says rental dwellings in any of these things. Is, is a good thing if you, if you have a rental, you want to make sure that it clearly states that and because it's a different policy, the whole back end of it, 100 pages of, of wording or different on a homeowner's versus a rental. So usually right on that front page, the declaration, they'll say it's a rental property, 

Bob Preston:         9:14            But that's important that the word rental is on there so that you want, you want to make sure your insurance company knows you're renting. So how did you guys do during the recent Lilac fire that you guys have many claims or any incidents that occurred? 

Chris Mahlberg:            09:32         Well, we had a couple of scenarios that came up. We called some clients, especially the LA ones. The LA fires happened first and we'd call. I called one that has a bunch of houses, houses in LA and told him, Hey, I just looked at a video online where that whole hillside is in flames over by the Getty Villa and he didn't even realize it was getting that close. So he got a little freaked out, but nothing happened monthly. Then we had a client in bond soul where the flames actually, we had one of our clients and bonds Bonsall yeah. And this is an interesting guy. This client is kind of a, he's like preparing for the apocalypse everyday. So his whole, his home is made out of concrete and it actually saved him in this fire because it just kind of went past it, like jumped over his home and there was nothing that would uh, would burn and I called him and I said, hey, did you get evacuated? I know your area, the fire went right over you. And he said he was in his bunker underground. He has like a concrete bunker with a bunch of dry foods and goods and things like that. So luckily he was okay. And I think a while most of the clients I call it had a like some fear in their voice. He seemed pretty excited. Hopefully. Hopefully no zombies emerge. I think he was proud that he put the work in and it turned out to help them. 

Bob Preston:        11:04           No that's an incredible story. So we also had a house in bonds will and the fire burned right up to the edge. We have a property, I mean under management and we had a tenant that evacuated and so the owners really glad they have the right policy in place because not only can they get their house restored, there's a lot of smoke damage, but it was able to cover some other things, for example, the loss of rent during the period that the tenants not at believe there. So excuse me. So, um, okay, well good. Those are some good examples. Talk to me about this concept of additional insured. Some insurance companies call it that. Some people call it additional interest. And this is something that we've learned to always require of North County Property Group that our clients include us as that you know, additional insured.

Chris Mahlberg:         11:53            So the additional insured does two things. One thing it removes the additional insured from the first line of liability, which means if there's a claim and North County Property Group and the landlord are both named in this lawsuit, right? It makes sense. Whoever the is naming you as additional insured, their policy comes first and then yours come second. So instead of your policy exhausting through its limits and paying for all the legal fees with that additional insured, it's the first line of defense that's picking up the legal fees and picking up the liability, which is how it should be because it doesn't. You don't need to fight the same claim from two different places.

Bob Preston:         12:43         Right. Property Group doesn't own the property. We just happened to be sort of on the front line in terms of dealing with a tenant. So the way I've sort of understood it is if there was a liability claim, they may first come after North County Property Group and having us on the policy as additional insured and makes certain that we don't have to then turn around and sue or go after the owner is that.

Chris Mahlberg:       13:06       That's it. And it also, when you are an additional insured, you get notified about any potential cancellations on the policy. So it can be a second line of defense on knowing about a potential cancellation. So you can help your clients maintain their policies or if they changed their mailing address and they're getting the mail there, don't realize they're not paying it. Sure. You can kind of see it. Keep tabs on that.

Bob Preston:          13:34          Okay. What about the limits and the amounts on the policy? Uh, what do you typically recommend for a rental policy or a landlord policy?

Chris Mahlberg:        13:43          Well, the limits on the, the home or something where it's important to know exactly what it's made up of. So we look at the interior information, flooring, type, cabinetry, countertops. We want to make sure that we're getting replacement cost to replace.

Bob Preston:          14:02           So yeah, I guess there are two aspects here. One is the is restoring the home, which would be variable depending on what kind of a home it is. And then the other would be the liability amounts and limits.

Chris Mahlberg:          14:14           Right? So what I recommend for a lot of people on just the rebuilding of the home part is to have a higher deductible because not only is it going to save you money in the short term, but it's going to have kind of avoid frivolous claims. We see clients that come to us, uh, they get referred because their current insurance won't cover them. They have three claims, let's say that we're 2000 bucks each, right? And now their policy goes up 2000 bucks for the next three years. So in the end is not really helping them that much and they could have had a deductible, maybe paid less each year. That little amount they save can kind of go towards paying a smaller claim. So that's just something that it's better to avoid claims, especially smaller ones. I know. We want to file claims if, if something happens and you know, it's a short term burden on us, but really bad in the long-term on making your.

Bob Preston:          15:17        Yeah, I guess you're trying to protect the family jewels if the family jewels, if you will, right? The disastrous either loss or sued from a litigious tenant. Right?

Chris Mahlberg:        15:30          And on the liability side, I always recommend at least enough liability to cover all your personal assets. So that's different for everybody, but you know, maybe a million dollar liability is not enough. So you get an umbrella and we kind of go from there.

Bob Preston:       15:45        Right? So an umbrella would be a liability policy on top of their home.

Chris Mahlberg:             15:51           It's usually really inexpensive. So it can be $20 a month for an extra million dollar liability. So it's kind of a no brainer if you have those assets, you want to protect those.

Bob Preston:            16:05          Now our property management agreement also mentions worker's compensation and the description of the insurance the homeowners should have. And I think a lot of homeowners don't understand that their home policy or their rental policy typically includes worker's comp. Is that correct?

Chris Mahlberg:         16:20           Right. It covers worker's comp up to their liability limits. So. Okay. That's for maybe you use a maid service and they get hurt, gardener or somebody, you may use them that they don't have their own worker's compensation. So they get a major injury. They're going after the homeowner.

Bob Preston:          16:42           Yeah, sure. Okay. Well that's good to know. What about renters insurance? So this is something that we also require the. You guys offer renter's insurance and where does that kick in?

Chris Mahlberg:          16:54          So Renter's insurance is a good idea for any landlord. You need to make sure that your tenants have renter's insurance because it protects you. So we were talking about additional insured before. What you want is your renters to have their own policy that covers liability and then the additional insured, which like we were talking about, that means the renter's insurance policy comes first, not yet the landlord. So not until the renter's insurance policies, what limits are exhausted. Do they start going after the landlord.

Bob Preston:        17:29        Oh, that's a good point because I think some people just assume that renter's insurance is only to protect the stuff that the renters move in, right? Their personal belongings. But that's not really the case. There's also a liability aspect.

Chris Mahlberg:         17:41         Right. And it also covers their loss of use. So it would help the renters, your tenants pay for hotel or pay for them. 

Bob Preston:        17:53           So in the case of the tenants that got evacuated from the Lilac fire and Bonsall when they went to the hotel, they were renters insurance would help. 

Chris Mahlberg:         18:00          That can cover that. And the other thing is that it covers damage to the property. So if the renter damages the property, that liability limit they have, which a lot of people carry 300,000 or 500,000, we try to get them at 500,000 to have a little more there. But if they damage the property thats covered under that 500,000 liability limit. One story I have on that is one of our clients had a tenant that was a collector of tropical fish. So we had these aquariums and if you, if you know people that are into that, they just, it's expensive, it's expensive, right? And you get a good aquarium and you want more, you want more fish, you want the, you know, this special fish, whatever it is. So he, he built a of his own because he's trying to save money. It's expensive and he had the filtration water systems and anyways, this is tank first and just water all over the home and you can imagine that kind of water damage. So. So his renters policy covered that and it was about $150,000 was. It was something he did. I mean, it wasn't any fault of the owner of the property, right? Is the tenant. That's when it kind of kicks in. I mean if it's something where it's the landlord's responsibility, like a pipe is going to be on a landlord policy of electrical thing beyond a landlord policy, but if it's something that tenant does, let's say they leave the bathwater on and it goes throughout the whole house, you know, if it's senate negligence, that's going to be covered on the renter's policy by the rent or liability. Detecting the homeowners household based gray and I had another one where the renter had a cigarette or something that he fell asleep and the cigarette's still lit and so fire the whole thing when the whole Condo, when and the renter's policy covered to replace the interior finishes and all that. And when I sit down with clients that are considering renting their home, I always make sure they understand that these things rarely happen. Heaven forbid. Right? But it's important to understand that the right policies in place, if it's risk management and it's good for the tenant to. Because that guy that started the fire, I mean all of his personal stuff and if he didn't have his renters policy, which is like 10 bucks a month, he wouldn't have had, you know, replacement on his TV and his bed and all that stuff. 

Bob Preston:        20:00         Okay. So we talked a little bit about this company before the show, just kind of discussing it around. There's a company called lemonade and I don't know much about them, but they've been after us to kind of offer this to our renters and apparently you can kind of go online and quickly do a rental insurance policy. Do you know much about them and what's the, what's the deal with lemonade?

Chris Mahlberg:            21:00            I looked up, I looked them up online and it seems like they have a really easy to use platform. I think we all want something easy that we can do at home and get the claim of five minutes. You can get a policy. Yeah, it's like a self checkout when I go to the store, go not much in the car and I'll go to the self checkout. It's easier. Yeah. But I think, and I don't know whether or not their policies good, I haven't read through it. I think like what we're talking about now, the importance is in the details and kind of what's in the back of that policy about the wording and what's covered, what's not covered. That's an important in insurance because there's a lot more to it than buying something at the store where you could see it, you know, you're buying a bunch of bananas instead of buying insurance where there's a lot more potential for loss. I mean we're talking about potentially hundreds of thousands of dollars lost. And my recommendation would be to get someone that read through the policy and says yes, this looks good, you know, checks off on it because I don't know about you. But whenever I go online and they have terms of service, I just click accept and I don't read the 80 pages of, of stuff. So it's just important to set of eyes on that and double check that stuff. Make sure the details are right.

Bob Preston:           22:26            And then I guess there's also an agent relationship. I mean if, if I'm buying insurance, I want to make sure, like, like if you were recovering, my policy would probably be the first person I call if I have some kind of a loss and then at least you can guide me and where to go within farmers to file my claim and to make something happen. And that might be difficult to do if you're dealing with a company that's out of state or I think they're based in New York.

Chris Mahlberg:         22:50        I don't know. They could have a great policy. I don't know and I don't feel like there's any reason to disparage them, but I would also just be careful.

Bob Preston:           22:59         Okay. No, that's interesting. I think they're kind of an up and coming startup and we may hear more about them. I know they've been chasing property managers a lot to get us to have some kind of a link on our website, so we'll, we'll see what happens with that. Okay. So now there's this kind of gray area. I call it an in-between property in our portfolio and that's the 30 day rental that's furnished and being rented 30 days at a time. So we have quite a few properties in our portfolio that are in condo associations and their second properties, so they're not a true vacation rental because they're being rented for 30 days at a time, but they are being rented all inclusive with furniture and the utilities are typically included. The only limitation is the minimum is 30 days. So is that a different definition or a different category for farmers in terms of rental insurance?

Chris Mahlberg:           23:46          A little bit. The way I would do that is they have. You can list it as a secondary home with short term rental. Usually they look at long-term rental is anything over six months, so you can write it that way and like we were talking about each of these policies is different whether you wright it primary home, secondary home, the occupancy kind of dictates the rest of the policy form. So writing that correctly is important just because you don't want to be in a scenario like we were talking about where it's a little bit of a gray area in a claim because you live there, right? So you might say, oh, I'll put it on a primary condo owner's policy and all my stuff's in there, so I want to make sure that that's covered on my personal property. But if a claim happens when a tenant's in there, all of a sudden we get into the gray area and it's hard to know if or how the coverage will be. And I think the key on these when you're doing 30 to 90 days is that there is vacancy restrictions on a lot of policies and if you have the home vacant for x amount of days, it depends on how, which carrier you have, but usually 15 or 30 day vacancies make it a vacant property and really limit your coverage. I think a lot of times they cut it in half. So whatever coverage you have, you have half of that. If they determine you it was a vacancy. 

Bob Preston:          25:38        Oh, like if nobody was there for a period of time. So either you as the owner weren't staying in the property and you didn't have a tenant during that vacancy period than there might be some limitations on coverage. Right. Interesting. Okay, so right, I mean I guess it's just a good idea to consult with a pro who writes your policy the right way and make sure you're covered for your particular scenario. 

Chris Mahlberg:       25:45         Yeah, because in that case, that's not a cookie cutter kind of scenario. So it's important that it gets put in there. Right. And that whoever you're working with understands what you're trying to do with that property. 

Bob Preston:         26:10           Okay. So let's move onto the third category that I've identified, and this is short term rental or otherwise known as vacation rental. And here we're talking about an owner who has a second home. Usually it's a vacation home of theirs. They come with their family, they use it. We have a lot of those along North county, coastal San Diego and we have a portfolio that's about 35 percent of our portfolio and these are short term. So when they're not using it, they want us to seek vacationers. We're going to come in typically four days or maybe weeks and anything under 30 days in our vernacular anyway, it's considered a short term rental. So how does that insurance work on properties like that?

Chris Mahlberg:          26:31         So that's the really tricky insurance policy because most people don't realize that a rental policy is not a short term rental policy, so you have to make sure it says short term rental or a vacation rental, somewhere on that front page, which, and then even farther than that kind of going into the, the back of the policy, the forums and looking at, okay, what do they actually mean by vacation rental according to your insurance company, the homeowner and the rental per policy that we talked about, the landlord policy, they have an exclusion in there that says no business use, which they're considering your short term rental business. And uh, and it, it really is for a lot of folks that mean it's run more like a hotel than it is a, a traditional rental because you may have people in for the weekend or the week and then you come, you turned the linens and everything. 

Bob Preston:          27:59             Our executive, a lot of communities, the, the renter pays transient occupancy tax, which is essentially like what they would pay in a hotel for example. 

Chris Mahlberg:      28:06          In that case, when you have an exclusion that's that cut and dry in your policy and you have a policy like that, that's not really a gray area. That scenario where the insurance company's going to say no, I mean it's right here. We have a cut and dry exclusion and so majority of companies don't allow vacation rentals, so we're talking about State Farm, AllState travelers, liberty mutual. They don't have an option like that. There's only a handful. 

Bob Preston:         28:32          It sounds like they used to, but a lot of companies are now shying away from it. Why? Why is that?

Chris Mahlberg:       28:38         It's the liability that they're mostly worried about. When you have a vacation rental, there's no way. Well, there's a way you have North County Property Group to maintain, make sure that we're trying to do our best to keep an eye on the road on it. Right. But for the owner that they don't have much power over that, and so they don't. They, they can't say, well, they do say we only allow this many people to be here, six people, but it's hard to enforce that and a lot of people want to bring their family, their friends, come check out this beach house we're renting, let's have a big barbecue. Just more people that come over and more liability that can potentially happen. 

Bob Preston:       29:23        And then of course there's the scary thought of the Rockstar party. I heard a story where Johnny Manziel rented a house in LA for the weekend from VRBO and cost $30,000 worth of damage, you know, throwing a big rock star party with all his crazy friends. 

Chris Mahlberg:      29:45        And that's without somebody getting hurt or something. Right? So there's a lot more liability in there and that's why the companies aren't covering it.

Bob Preston:         29:48        So what do you do then when you get a request from one of our clients who's looking for this type of a policy?

Chris Mahlberg:         29:55          Well, I go to certain companies I know do short term rentals and for me there's three or four that our go to’s that I know they write that and they have a good coverage form. And I also made sure we maximize the liability on that. The vacation rentals that have pools are actually interesting. It's really hard to get high liability on those. They usually have a cap. So the companies I work with will say if they have a pool, the most liability we're going to cover is 100,000 or 300,000 because they don't want somebody diving in hitting their head jump, falling in drowning. There's just too much potential liability with that. I mean, people go on vacation, they go to vacation rentals to have fun and unfortunately when you're having fun, that's a potential for bad things happening.

Bob Preston:          30:47        Yeah. We had one policy of a property, we had a vacation rental and they had a pool and the insurance company made us put up like a the no lifeguard on duty sign and make sure that there were indicators of the water depth for some of those reasons. Have you heard of stuff like that? 

Chris Mahlberg:          31:08          I have. I've heard companies do that. They all have their own rules and they're trying to limit the risk of a pool at a vacation rental as much as possible. I've seen some companies that make the owners put a fence around the pool, even though they have a fence around their property, they'll say, no, we need a fence right around your Mesh. Fence gets installed, come up more and more. I think they just want to make sure there's no potential for a claim with that pool.

Bob Preston:          31:41          So you've been pretty successful though writing policies for us for the short term. So it is doable?

Chris Mahlberg:         31:47        It is doable and I think it's important when I talk to the clients that they understand that their current policy doesn't cover it and we also see a scenario a lot. Like I was saying, I get referrals from State Farm or AllState and it's. It's tough switch. I mean the clients want to keep their policy that they've had for all these years and their agent wants to keep them too, but they eventually. The agent says, look, for the better good of the client, I have to send them to you because my policy is not going to cover them.

Bob Preston:         32:21          Typically a policy replacement or could there be sort of a secondary policy laid on top of their replacement?

Chris Mahlberg:          32:29           So it becomes a replacement, we see people that want to rent it out for one month and they'll come to me and we'll get. I'm a policy for one month and now go back to their old policy, but a lot of them have a good month. Maybe they make a lot more money than they would on a normal rental and they say we want to have that option. So I recommend people get, if they want to do vacation rentals, they get a short term rental policy that goes throughout the year and they don't have to worry about changing it around. And were you called wonder if they called me or they call it their other agent or what policies are in place.

Bob Preston:        33:07         Okay. And then just for the sake of being complete here and sort of covering all the types of insurance, there's. I don't think you. Offer this, but there's a type of insurance called damage protection insurance that is often tied to short term rentals. Are you familiar with that type of insurance? 

Chris Mahlberg:        33:29        Yeah, and I think that's a really good insurance for vacation rental owners to have because what it does is covers tenants. Whoever's staying there, the renter actually buys it. Yeah, the rents or buys it and so if they damage any of your property there, there's a certain amount of coverage they have and I think there's very little or very low deductible on those, which is.

Bob Preston:         33:51          Yeah, I don't think in our case, the insurance that we use for that, there's actually no deductible. It's a $99 policy that we charged to the render. We enroll them and then there's 5,000 coverage on accidental damage that the renter causes.

Chris Mahlberg:        34:10          Which is great because that it helps them enjoy their vacation and their stay there. Imagine going into a place and you break the TV the first night there. Maybe you're trying to figure out how to turn it on, you know, that can ruin your whole trip saying, oh, I've got to pay for this now. I can't go out for a nice dinner or whatever, so I think that's a really nice policy to have and it helps the landlord a lot too because their deductible is going to be higher thousand and 2,500, you know, with that policy, these little damages that are bound to happen are covered.

Bob Preston:         34:41         Typically the damages are small. We kind of thing rarely happens again, you know, but it does. Occasionally. We had a property that had this beautiful 55 inch LCD TV that was kind of a table height and one of their children walked up with a toy and was watching a cartoon and took the toy and just scratch a giant across the front of the LCD. It ruined it. I mean we had, there was no room, there was no fixing. It had to be replaced and it was about a $2,500 TV and it was covered. It was an accident. 

Chris Mahlberg:        35:20         So yeah. So that, that piece of mind to give to your vacation renters. Yeah. That, hey, don't worry about it. Enjoy yourself. Have Fun. I nice.

Bob Preston:        35:26         Well, it also allows us to charge a reasonable security deposit on a vacation rental because it can be prohibited sometimes if you charge a vacation runner, like a $5,000 security deposit, they're not going to rent the property, but this allows us to. We typically do kind of a hybrid program where we charge a small security deposit and then we do the damage protection insurance, which we know will cover up the $5,000. So. Well what else, Chris? Is there anything else that our listeners should know about if they're considering renting their home and insurance?

Chris Mahlberg:       35:56       I think the key is just to look at what you have now and maybe get a professional opinion on what you have and whether that's going to cover what you want to do, especially if you're changing occupancy. That's where the details get a little bit mixed up and can get overlooked. So if you're changing occupancy on, on your property, you really want to double check and make sure that you have the right policy for that.

Bob Preston:         36:21       That's good. Good input. I suppose if you're thinking about renting your property and you want to use a property manager, that would be the first step is researching property managers, but I think a logical next step would be talking to your insurance agent right away and then probably talking to your tax advisor to understand tax implications, but the insurance is right up there as a top priority.

Chris Mahlberg:        36:43      It is, yeah. The potential for a major losses there so you might as well make sure that's not there. Mitigate that as much as possible.

Bob Preston:            36:53           Well this has been really great. Very informative and we thank you for joining us. And once again, maybe just your phone number of someone were interested in contact idea.

Chris Mahlberg:          37:02        Yeah. If you have any questions on what we talked about whatsoever, you can call me. 858-692-9509. You can call text whatever, anytime, anytime of day.

Bob Preston:         37:15         Careful what you ask for. Okay. Chris, well thanks so much for joining us. This concludes today's episode. Thank you for all are. Thank you all for joining the property management brainstorm podcast and until next time at North County property group, we'll be in the field working hard for our clients to maximize their property value in income and maintain top notch tenant relations. We will see you next time and thanks again to Chris Mahlberg.

Chris Mahlberg:        37:42        Thank you. See Ya.



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