Part I: Home Values, Purchase Prices, and Getting a Loan

Recently, we reached out to several of our friends in real estate and lending for their feedback on the current state of the world, especially as it pertains to buying and selling real estate in the Northwest post Covid-19. “Home Values, Purchases Prices, and Getting a Loan” is the first in a series of four articles resulting from the feedback we received.

We asked the following questions, “How have home values and purchase prices been affected by the Pandemic, ensuing unemployment and government shutdown?” and “Is it harder to get a loan to purchase a home during this pandemic?” Here’s what our friends had to say.

Home Values/Purchase Prices – Washington
Jeremy Asmus of the Kenmore Team in Kennewick, Washington noted “the uptick in the market we expect to see in the spring has been delayed, but home prices are holding steady.” Shawn Flinders with Evergreen Home Loans in Kennewick felt it may be too soon to tell what the impact will be, but said, “In Eastern WA there is a shortage of available inventory which should help keep home prices relatively stable.” However, “Further stay-at-home orders have the potential to dramatically change this,” he added.

Home Values/Purchase Prices – Oregon
Our friend Chris Stewart with Windemere Pacific West Properties in Salem, Oregon had this to say about the market there, “At this time values have not been impacted. We are seeing buyers and sellers who are concerned about their employment status put off buying and selling until they feel more comfortable, but that is a very small percentage of what we are experiencing. There are more buyers in the market than sellers which keeps upward pressure on home pricing.”

Getting a Loan – Washington/Oregon
On questions regarding loans, Eric Culverhouse of Retter & Company in Kennewick, Washington answered, “We have not noticed issues with lending other than a few delays and back log with appraisers due to the continued record low interest rates, compounded with the refinance market.” Dr. Kay Lehman of Realtor Kay, LLC however, felt it’s currently harder to get a loan because, while the underlying qualifications from FHA, Fannie Mae etc. have not changed, some lenders have raised their in-house qualifications. She adds, “Today it is more important than ever to shop around and ask questions of lenders.” Finally, Chris Stewart of Windermere Pacific West Properties reported little to no impact on getting a loan in his market in Oregon. “In fact, we’ve seen interest reductions which created an activity of refinancing and more buyers in the market.”

In summary, as Eric Culver of Retter & Company noted, “The housing market has long been one of the primary cornerstones of our economy” and “will be a significant factor assisting the economy and livelihoods of our nation.” And here at JPI, we love Dave Ramsey… So, for a nationwide perspective, here’s what Dave has to say. Check out his article, Can I Buy or Sell a Home in 2020?

Home

Follow our four-part series on buying and selling real estate when we talk more about the availability of housing for the remainder of 2020 and offer some advice to buyers and sellers for the coming months.

 

We want to let you in on a “Big Secret.”

During the COVID-19 pandemic, your business has been impacted in many ways you may not realize. “Essential” and “Non-essential” alike, we are in a new frontier and scrambling to keep our livelihoods moving forward.

When looking through the lens of risk management through insurance, I see 2 major things you can do today to impact your bottom line.

RETURN OF PREMIUM

First, I’ll let you in on a “big secret” you may not have been informed of. “Return Of Premium!”

While the home & auto insurance companies have been “tooting their horn” about return of premium to their clients, we haven’t heard much from the commercial insurance industry. If your business has been impacted by a mandatory shut down, call your agent and ask if you can get a “Return Of Premium.”

One major example is the hospitality industry – their general liability and liquor liability is rated off their annual sales. The business owner takes an educated guess as to what their sales will be for the year prior to starting the policy, and then pay that premium.

In the case of COVID-19, where they were forced to shut their doors for months, they likely overpaid in premium. Considering insurance companies are denying business income claims, the vast majority are offering a return on their premium, giving the customers a break on the cost of insurance since sales have been greatly impacted.

It may require a P&L, showing sales volumes prior to the shutdown, or adjusting what the sales should have been for the year, and giving a return based on the lower numbers.

Either way, if your business has been shut down due to COVID-19, call your agent today and ask what your insurance carrier is willing to do!

CYBER LIABILITY

Second, computer hackers are seizing on the pandemic. Twitter announced all their staff are working remote and may end up working remote indefinitely.

Are you confident your remote workers are as secure as they would be in your workplace?
Hackers see this vulnerability and the amount of cyber attacks have increased significantly.

What can you do?

A first-line defense is working with a seasoned IT company. If something does get through and takes down your computer system, do you have the cash on hand to be able to weather the storm? The costs associated with ransomware, restoring data, notifying all clients by mail – even the cost to provide credit monitoring services – can quickly run into 6-Figures.

How would that cost impact your operations? A comprehensive cyber liability policy is an equitable solution to protect your bottom line!

No doubt, this virus thing has given each of us an underlying level of stress, whether we’re willing to admit it or not. But the question is, where do you find yourself today – waiting for it to change, or doing what you can to make a lasting difference for your loved ones, friends, co-workers, and community?

JPI Insurance Solutions feels a big responsibility to pay-it-forward in this time. We’ve helped organize various efforts to support local business owners, non-profits, and the people fighting on the front lines of this virus.

And we are so proud of our agents for their part in our efforts! During the month of April, they personally checked in on over 700 of our clients. And who knew we had a whole crew of sewing ninjas?! Together, they were able to source materials for, make, and donate over 250 hand-made masks to those on the front lines, including Kadlec & Tri-Cities Cancer Center!

We’ve continued to pay staff with ninja sewing skills to make masks as needed and have handed them out to our friends at local restaurants. In May, we plan to continue to support other businesses and nonprofits, have some fun, and in general try to get through these times as best we can.

So, our challenge to YOU is this… Be the leader with every person you can influence. Look for the helpers, be one of them, and make a positive impact whenever and however possible. As we get through these times, we will come out stronger and more resilient than ever before!

-Jon Patterson, JPI Insurance Solutions

“The pessimist complains about the wind. The optimist expects it to change. The leader adjusts the sails.” – John Maxell

No doubt, this virus has given each of us an underlying level of stress, whether we admit it or not. But the questions is, where do you find yourself today – complaining about it or expecting it to change, or doing what you can to make a lasting difference for your children, spouse, loved ones, friends and co-workers?

JPI Insurance Solutions feels a big responsibility to pay-it-forward in this time. We’ve helped organize various efforts to support local business owners, non-profits, and the people fighting on the front lines of this virus.

Save The Tri-Cities & Tri-City Strong are two ways you can step up and be a leader in our community.

Save The Tri-Cities is a group of individuals that care about the local restaurant and retail business owners and have created a way to quickly and safely get capital into their hands. Please take a few moments to check out www.spottedfoxdeals.com today. Consider supporting one or more of the member businesses by purchasing coupons and pick up a T-Shirt while you’re there – All profits go to the business owners!

Tri-City Strong is led by local non-profit Gesa Carousel of Dreams, and is actively raising money for our hardest hit non-profits. You can go to https://tricitystrong.com/ or visit their Facebook page at TricityStrong to learn more. All proceeds go directly to the non-profits! Please consider giving today!

Finally, JPI has been able to source materials for, and make and donate over 250 hand-made masks to those on the front lines including Kadlec & Tri-Cities Cancer Center. We’re continuing to pay staff with ninja sewing skills to make masks as needed.

So, our challenge to YOU is to be the leader with every person you can influence. As we get through these times, we will come out stronger and more resilient than ever before!

#SaveTheTricities #TricityStrong

-Jon Patterson, JPI Insurance Solutions

“The pessimist complains about the wind. The optimist expects it to change. The leader adjusts the sails.” – John Maxell

Support Local Tee

Your purchase helps member businesses recoup the cost of redeemed coupons.

From the moment we realized this year’s flu was different, Tri-Cities businesses took a series of hits. It started with an initial slowdown, and for some proceeded very quickly to a complete shutdown. Local business owners have struggled incrementally with each new barrier to delivering their goods and services just to survive. Now we all must adjust to what is being called “the new normal.”

As your insurance agent, JPI has been at the epicenter of all this. Our hearts go out to each and every one of you. And we mean, EVERY business owner… not just our clients.

We are proud of our own Jon Patterson, who has worked tirelessly since the onset of this outbreak to help assure the survival of local businesses. He’s been working with Nathan Robertson of Spotted Fox, and together they cooked up this idea to bring relief to the business community hurting from the shutdown.

It’s simple. Just go to http://www.spottedfoxdeals.com. Spend $25, and get a $50 certificate to use in July or later! And Spotted Fox Deals gives ALL profits to our local businesses! In addition, there’s a limited edition “Save The Tri-Cities” T-Shirt for $25. Again, all profits go to member businesses to help offset the discounted coupons!

Jon Patterson says, “I’m sure many of you spend more than $100 in a month at our retail businesses, so I challenge you to support 4 different businesses today if you can afford it!” It’s a win-win-win program! Business owners get a quick influx of cash, you get a great deal. And it’s all done safely, from the comfort of your own home!

This effort raised over $5000 in the first day and continues into April.

Protect yourself and your assets with an umbrella policy.

 

Do YOU have enough liability coverage? By Tina Hernandez

You don’t have to be rich to be sued! The importance of having enough Liability insurance is essential.

We all want to save money on our auto insurance but are we really saving when we don’t have sufficient coverage? Not knowing the risks can be devastating and cost you way more in the long run.

So, what happens if your teenager is out driving on a rainy evening & pulls out in front of a brand new Mercedes totaling it and injuring the driver and their passenger? You purchased the minimum liability limits 25/50/25.
25,000 per person, 25,000 for property damage and a total of 50,000 per claim. That brand new Mercedes alone is well worth over 25,000, the injuries, loss of work, attorney fees ect. Where is the balance owed coming from?

It will have to come from you. Savings account, garnished wages, have to sell your home, cars and any other personal belongings that have value. Bankruptcy? This will become very stressful and financially exhausting.

I urge you to have this discussion with your Insurance Agent/Advisor when you purchase the policy and annually after, things change. Assets, drivers etc.

How much is enough? Do I need an Umbrella policy? What is an Umbrella policy?

An Umbrella policy is an additional policy/extra protection and peace of mind is how I like to think about it. It pays out after the limits of your liability has been exhausted. You can choose different amounts. The most common amount that I see is 1 million but I have also seen some out there for 5 million. The amount depends on your unique needs. Have that discussion with your advisor to avoid gaps in coverage and very expensive law suits.

1. America Ferrera insures her smile for $10,000,000!
If “any reasonable and necessary dental treatment costs or expenses that result from accidental injury” the policy will cover her smile, teeth & gums! Lloyd’s of London is the insurance company that will write the check should something go wrong!

2. Taco Bell purchased insurance to cover their Taco giveaway!
Taco Bell promised everyone in America a taco if the Mir Space Station crashed at a specific location in the Pacific Ocean. The policy was worth about $280 Million, enough to cover 1 taco for every American!

3. Hole-In-One Insurance
At the next golf tournament that promises a new car or a bundle of cash from a hole sponsor, it’s extremely likely they won’t have to foot the bill! Most sponsors buy an insurance policy, that if there is a hole-in-one, will pay out the value of the prize! So, don’t feel bad for the hole sponsor next time you ace your shot!

4. Your credit score can significantly impact the cost of your insurance.
Nearly all insurance companies have credit-based “insurance scores” where the higher the score, the better the rate. The lower the score, the more expensive it gets! If you have zero traffic accidents and claims but pay a lot for your insurance, chances are, your spending habits are what’s costing you the most!

5. Think twice before buying that cute puppy!
Home insurance policies often prohibit certain dog breeds! There were over $600 Million in dog liability claims in 2017 – it’s a serious matter. So, before you fall in love with that puppy, call your agent to make sure you will have coverage for the breed you love!

6. Insurance is sexist!
Two teenagers with zero claims or tickets – but the teenage male is charged more than a teenage female for auto insurance? It’s true! Why? Statistically, teenage males cause more damage than teenage females.

7. No insurance for you!
No insurance company is willing to offer Jackie Chan’s movie company coverage due to the activities in the films. Jackie Chan offers to cover all medical bills of his stuntmen, having to self-insure his films!

8. Steven Spielberg has the most expensive life insurance policy at $1.2 Billion!

The holidays are over and like lots of people, you’ve probably got a few new toys… Or maybe a luxury item you received as a Christmas gift. Did you know homeowner insurance policies have limitations on coverage for certain valuables? For example, did you receive any of the following for Christmas?

Collectibles
Jewelry
Firearms or Other Sporting Goods
Camera Equipment
Furs

If so, they may be subject to coverage limitations. And the worst time to learn about coverage limitations is AFTER something has already happened to your gift! Do you know what your homeowners policy covers? If not, now is a good time to review it with an insurance agent. You want to be sure your new items are covered in the event of a claim. There are a couple ways to do this:

• Increase internal limits – Your home deductible would still apply in the event of a loss.
• Individually schedule valuable articles – This allows you to insure the valuable article for the appraisal/purchase price and there is no deductible (the insurance carrier may require an appraisal or a receipt).

Home coverage can also include special policy endorsements for personal property and/or mysterious disappearance. Some policies include this endorsement, while other companies allow you to add them to your home policy.

What is mysterious disappearance? Imagine you take your wedding ring off to clean that wonderful turkey, but when you go back to the kitchen to get it… “OMG where is my ring?!” Did it go down the drain? Did one of the kids move it? Did your pet eat it? That is what the insurance industry calls mysterious disappearance.

Bonus: If you schedule the ring, there’s no deductible if it mysteriously disappears!

At JPI, it’s our job to help you understand your insurance coverage. We’d love to review your homeowners policy with you to be sure you have adequate coverage for all the special things in your home.

I’m pretty confident that if you asked anyone who has ever owned a rental property you would get an overwhelming response that it’s not as lucrative or easy as they thought it would be. In fact, owning a rental property can be a major pain, and end up costing you a ton of money!

I certainly don’t mean to be a “Debbie Downer”, and I know that if it’s done right it can be lucrative, but from an insurance agent’s perspective, I don’t see a lot of people doing it right.

So you’re probably thinking, “Well Chris, you are an insurance agent. What do you know about real estate or rental properties? Why should I take advice from you?”

I’m not a real estate agent, and I don’t own a rental property. However, several of my friends/family/clients/co-workers own rentals, and because I insure a bunch of their properties, I’ve had a first hand account of the process, and I’ve learned what to do, and what not to do.

Continue reading →

I was recently asked this question by one of our JPI Insurance Solutions clients, and thought I would share the answer here for our readers.

There are a lot of things that go into homeowners and auto insurance rates, one of them being credit. I’ve heard a lot of complaints from people who don’t like the fact that insurance companies use credit in their underwriting.

Some people have absolutely no idea that it’s used in the rate at all.

At the end of the day, there’s not much we can do about it though. Insurance companies have been using credit in their rates for decades, and that’s not likely to change.

By the way, insurance companies don’t pull your credit like a mortgage company or credit card company does. There is no negative impact on your credit as a result of an insurance company looking at it.

When I say “pull” what I mean is that the insurance company is doing what’s called a soft inquiry, which is not the same thing as having your credit pulled (hard inquiry).

When does credit play a role in insurance rates?
It’s important to understand that insurance companies don’t continuously check or monitor your credit. Usually, they only check it when you first get a quote and/or sign up with them in the very beginning.

This means that if your credit score increases (or decreases) your insurance company does not automatically know about it.

So, to my customers question of whether or not his increased credit score will lower his rates, the answer is not automatically.

What has to be done on our side as the agent is contact the carrier the insurance and ask them to do what’s commonly referred to as a “re-score”. This is when the insurance company can re-run the person’s credit (soft inquiry) to see if there is any positive bearing on the rate.

This isn’t something that the insurance company is going to let the agency do every single year, so it’s not worth even asking unless there has been a significant change in your credit score, and only you as the customer would know if that was the case.

If you’d like to get a better handle on your credit rating, it could be helpful to setup credit monitoring. We hope this was helpful! As always, leave us comment below if you have any questions.