How to Protect Your clients

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Find out how to protect your client from a costly situation by follow these few steps.

Submitted: November 17, 2016

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Submitted: November 17, 2016



How To Protect Your Clients.

  Insurance fraud accounts for $40 billion in losses each year.  That means the average homeowner is paying around $4-700 per year just to offset those losses. You are probably wondering what that has to do with you as a real estate agent, but I can tell you in a few simple steps how you can protect your clients from becoming victim of insurance fraud. Since 2008, the Omaha metropolitan area has been hit with hail every year except for one, which was in 2015.  During that time frame some parts of Omaha even got hit twice requiring two roof replacements in less than 8 years.  Not only are the payouts substantial for legitimate claims, this opens up the door for insurance fraud of great proportion.  Because of the type of insurance fraud that stems from a situation like this, your clients could be put into a position that could cost them a great deal of money and/or leave them uninsurable.

  I have personally seen people make a claim on their roof, get the initial payout and then sell their house without replacing it.  If your client were to purchase one of these homes without the prior knowledge of the insurance claim, they may find themselves with a home that is uninsurable without the roof being replaced.  I know that the home inspectors are supposed to catch these types of things and the current homeowners are supposed to disclose this, but for one reason or another things are missed and people are sitting on a totaled out roof and a potentially uninsurable house.

  I’m sure you are now asking yourself what can be done to help protect your clients from a situation like this, especially since you are in real estate, not insurance.  I am here to share with you some simple processes that can be put into place that will provide them with assurance that you are doing everything in their best interest while helping prevent insurance fraud which has immeasurable benefits for our community.  One of the easiest things that can be done is advising`` your customer to ask their agent for a quote and to check the Clue report for a hail payout.  Most of the companies should have access to claims that are 6-7 years old which is pretty close to the time that all of this hail started.  If there is a payout for hail that shows for that address, you can then go to the Douglas county permit site and search to see if a permit was pulled on the property.  If it was from 2013-until now then the roofing company has to pull one by law. You can then relay the message to your client that you have verified the roof age through the permit pulled and give them the exact date it was done.  If there isn’t one then I would recommend you contact the realtor representing the seller for proof it was replaced.  If it wasn’t, then you can put that as a stipulation in the purchase agreement or advise your client to walk away.

  If the home is outside of Douglas county then you will have a little more work ahead of you because depending on where it is, you may have to call different permit offices and even then, they all don’t require permits to do roof replacements which will bring you back to a situation where you are contacting the sellers realtor for proof of replacement. 

  Another situation that can arise from this is if your client buys a house and you don’t do this check but there was a hail claim and the roof was never repaired.  The deal could go through; the insurance company insures the house because they didn’t do a thorough roof inspection and everything seems fine…until they go to sell.  If the buyer’s realtor is doing their due diligence, they should be requesting proof the roof was replaced because there was a recent hail claim.  If this were to happen, the current owner would not be able to produce the document showing it was replaced because it never happened.  They could try to turn in a claim and get it replaced but they are committing insurance fraud because they know there was a payout once and it just wasn’t replaced.  If they don’t want to turn in a claim then they may have to replace it out of pocket just to sell the house.  Either way, these are unfortunate circumstances that could be easily avoidable by putting the right processes in place. 

  It is unfortunate that as professionals we have to think about situations such as these but we cannot ignore the reality of how everything really works.  By implementing a process like this you will be gaining even more trust between you and your buyer by showing them you are working for them.  With a process like this you will be helping them from a costly situation all the while you are helping yourself and everyone in your community from increasing insurance costs by mitigating insurance fraud!

Mick Manley

© Copyright 2019 Mick Manley. All rights reserved.

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