Unexpected Claims that Landlord Insurance Covers

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Transcript from the Resilient REI Podcast "Helicopters Rescuing Tenants: The Wild World of Landlord Insurance with Steadily"

Dan: Hey, how's it going? This is Dan from the Resilient Real Estate Investing Podcast, the show for the everyday real estate investor. And today's show features Max McClure, a senior vice president over at Steadily Insurance. Over the past couple of months, we've had the pleasure of building out our relationship with Steadily. They sponsored a number of our recent episodes. And the other week we were talking and I just said, hey, you guys represent landlords at scale. From an insurance perspective, I'm sure you get a ton of claims that come across your desk of just weird situations that landlords find themselves in. And they said, Dan, you have no idea. One thing led to another and I got connected with Max McClure, the senior vice president of Underwriting and reinsurance over at Steadily, essentially the guy who is overseeing claims. And we are talking and it's like, wow, this has got to be a podcast. So today we are going to be hearing four stories of the wild world of landlord insurance. And I know that's a tongue twister, so strap in. This is a lot of fun. Fingers crossed we might have Max on in the future to share more stories. So let's just get into it. Let's hear from Max McClure on the wild world of landlord insurance. Max McClure you're from steadily. Thank you so much for joining the show. Do you mind giving an overview as to who you are when it comes to real estate and insurance and all that good stuff?

Max: Yeah, thank you for having me, Dan. I will absolutely do that. So I started off my insurance career close to 13 years ago. I started off as a field claims gesture, which we're going to talk a bit about today. Which means when somebody, a customer, files a claim, the insurance company assigns me that claim, and I physically go out to that. Location. Look at the damage. Appraise it. Estimate how much it's going to cost. Walk the customer through the process. Make sure that they're fully indemnified for the damage, that they for the event that they've gone through. So that was my initial role directly out of college, which is a great experience. You really get boots on the ground, understand how insurance works, who the customer is, how they're impacted, why it really exists. So I did that for a couple of years and then I moved on and did some different roles on Underwriting, which is a little bit more of like the backend analytics of an insurance company and fast forward a few years and I've been in multiple management executive team positions at different insurance companies. I fortunately and fortuitously hooked up with Steadily a couple a couple of years ago early on. So I think that was employee five or six somewhere in there with Steadily. And now we're at close to 90 employees. So it's been an awesome experience. So for those of you that are not familiar with Steadily, we are an insurer tech that focuses exclusively on rental property insurance for landlords. We have products for a wide array of landlord investments. Our core product is built for single family rentals all the way up to a Quadplex. We can also do apartment buildings, those types of things. But our bread and butter is one to four family, one to four family dwellings. And our value proposition for customers and for brokers is our tech forward posture. So our tech compared to legacy insurance companies that you see all the TV commercials on is we are so much faster. Our technology can give you quotes in seconds you combined on our platform so that the time commitment to you, the customer with Steadily is minutes versus days with the competition. So I think that's a good summary of what Steadily does. We're also competitively priced white glove service. We are definitely a very modern, pleasant experience for today's landlords.

Dan: When I'm looking for my business, I always look for people who are specializing in what I invest in Milwaukee, people who specialize in Milwaukee, people who specialize with landlords and with that asset class just because you get people who kind of know what they're doing and speak the language. Max I've had a relationship with Steadily and I was hoping to have a conversation about just different claims that you've seen. I mean, you guys work with landlords at scale, so that means you see when things go wrong at scale. So I was hoping to kind of go through a couple of stories of just things that kind of popped out at you is just unique situations and kind of like how you guys approach that. But before we get into that, you're talking about you said you're on the ground out of college fielding claims. Were you just doing everything right, like roofing flooding, like fire or did you specialize in a specific type of damage?

Max: I was pretty fortunate where out of the gate I was what you would call a general adjuster. So I was handling a wide array of types of claims. I was based in the Dallas Fort Worth area, which is pretty much like hail Mecca of the US. So a lot of the claims that I did were hail related roof claims. So I would say that that was definitely the majority of the claims that I handled directly in the field. But I also had the experience of doing a host of other claims, like total fire losses done, those water claims, those types of things. It can get a little bit more tricky.

Dan: My day job is actually in the remodeling field and talking with roofers specifically from Texas. They're like, yeah, there's no roof in Texas that's older than 20 years with the amount of hail that we get. So they do a lot of good business down there in Texas. So Max, let's get into it. You've got a couple of stories prepared of just unique situations that landlords have found themselves in. Do you mind kicking it off? Like, what do you got in store for story number one? Yeah, absolutely. So since we we talked about my we started off talking about my early years in the industry. So fresh out of college, got a job as a field claims adjuster. Coincidentally, I was also newly married at the time. So my wife and I think had our first apartment. And I think I was a couple of months into my job. Just I was confident enough that I was kind of let loose. I didn't have a trainer with me anymore. I was able to go do inspections on my own. And I remember waking up one morning and I think, think I had half a dozen claims that I had to adjust that day. So I was going to be climbing six different brutes. We had recently had a hailstorm, I think this was in South Dallas. We had a hailstorm come through. So we had a bunch of claims we had to go look at down there. So I remember waking up one morning and like I said, I was in newly wed, we were new and we were not good at meal planning for the week at all. So I remember opening up the fridge, being, okay, about to go climb six roofs, I need to eat breakfast. And there was nothing in there. There was literally nothing to eat except that there was this little six pack of yogurt in the fridge and I had no idea what the brand was, no idea, but it was called Activia. So I grabbed one and I was like, okay, I want to have this for breakfast. And I ate it and it was delicious, but it was very small. So I was like, okay, I'm going to have another. And I did, and then I had a third one and so I didn't think anything of it. Had my three yogurts grabbed my ladder, all my tools and equipment, and I was out the door. So drive I think that was South Dallas. So drive from my apartment to South Dallas is a 30 minutes drive. Gets in my first roof. Everything goes fine. Climb, climb the roof. I don't really remember what happened. Probably met the roofer, walk the roof or place. It didn't. I can't remember on that specific roof what happened. I leave that one and go to roof number two. And I realized that we might have a problem. But I kind of got to that one out and got through it, no pun intended. And then I get to this third roof, my third inspection of the day. And of course, it was a two story roof, which means you've got to get your two story ladder out, which is way heavier. You've got to climb the roof. And this roof was also a steep second story roof for for those of you who have not climbed a two steep two story roof, it is not the most pleasant experience. You've got to climb up two stories in the ladder. You got to figure out how to get your first couple of steps onto the roof, and then you've got to kind of scale up it and start walking around. So in this case, I set up the ladder. I met the roofer there. Both of us climbed, got up on the roof, and, oh, boy, did my stomach start to hurt. It was bad. And I got to the point where almost fell off the roof. I felt like I got gut punched. And I told the roofer, I was like, I got to go. I'll be back, but I got to go right now. And I scuttled my way down this roof to this two story ladder. I think it was like something out of Ghostbusters where I don't even think I stepped on any steps. I just put my feet on the side, slid down, jumped in my truck, left. I'm going to spare you what happened the next 20 or so minutes, but I can tell you that I successfully reached my destination. And then I came back a few minutes later, and the roofer was I think he was a good old Texas boy. And he was like, damn, boy, what have you been eating? It was very funny at the time. I didn't even put two together. I didn't really know what happened. But anyway, when you leave a roofer stranded on a roof for 20 minutes like that, I just didn't have the heart to deny the roof. So I think I ended up paying for the roof or whatever due to hail damage. But I learned at that point to plan my day a lot better, because when you're out in the field and you're a long way from home and you're on your own, you can't go knock on the customer's door. That's not going to work. So anyway, a good learning experience for a young adjuster and young husband, member of a household on how to Live Life Activia.

Dan: I feel like I've seen those commercials and it's like one of those older celebrities, right, just dipping into the thing of yogurt. It's for constipation, is it?

Max: Right. It's it's to help you go, well, you know, then it makes sense. Now that I thought about it at the time, I didn't think about it. Yeah, it's like a probiotic, I guess. And to be honest with you, that was twelve or 13 years ago and I have not had Activia since. So I can't verify whether it's good or not. I have completely stayed away from the probiotic yogurts.

Dan: Yeah. And that's a great transition for today's Sponsor Activia. When you are looking, when you need to get up on roofs, Activia, make sure you get three. So Max, that happened, right? Like and the roofer just stood there up on the roof. Like he, he hung around like you're just like, hey, I got to go. I got to do some business real quick. I'll be back in 20.

Max: Pretty much. I mean the roof from the roofer's perspective. So this is a, this is a rental property that somebody owns. Like they're not there. Attending the roofer is really we're both, I suppose, representatives of the customer. He's obviously there to replace the roof. That's how he's going to make money. I'm there to determine if the roof needs to be replaced or not based on the recent hail damage. So he really can't do anything. He's an advocate there to try and get the roof replaced. That's his incentives, right? So, yeah, he pretty much had to stand there and wait for him. But these things happen, right.

Dan: Activia aside in situations like that, and I imagine in most insurance situations that remodel or that roofer there is trying to get the most amount of money to get that project fixed, right? And then you're there to make sure that the project gets fixed, but that you're not spending an arm and a leg to get it done. What's that dance like? Do you have any examples of kind of what that's like? Because I'm on the remodeling side and I hear a lot from roofers who do this type of work. And the way that they talk about it really sounds like it's a bit of a dance between the two parties.

Max: It is a bit of a dance. I will say that 80% of your interactions with roofers contractors are going to be positive and then you're going to have that 20% where you're dealing with somebody who is quite unpleasant or just completely unreasonable. So I will say 80% of those interactions. Both parties are just trying to figure out the right solution for the customer. So in a lot of cases, what it will come down to is, okay, let's just use hail damage because that was the claim in this instance that we're talking about, we'll look at how many impact marks are on the roof. So there are some roofers that say, okay, we've got ten hail impact marks on this entire slope and that's enough to warrant replacement. And the insurance company's position is that for this type of roof and its age, there needs to be 20 hail impact marks on this slope to warrant replacement, because only at that level of damage is the roof compromised at all from doing its intended purpose. So that happens on a regular basis, trying to decide the extent of the damage and going through. Literally what you do is you grab chalk and you will go through and mark up the roof. And once it rains, it goes away. So it's like your regular sidewalk chalk. So it's pretty normal to go and mark up these roofs with roofers and work through whether it's hail damage or not. So that's one piece of it. Sometimes hail tends to fall directionally, sometimes it falls straight down. But usually when you have a hail, a bit like the wind is really strong. And so what ends up happening is hail will impact slopes that were perpendicular to the direction of the hail. And the other slopes may be fine because it was a glancing blow instead of direct. And so in those cases, sometimes you end up needing to only replace 50% of the roof and roofers really don't like that. So when you're doing like a half, replacing half of it, because for them, it's a lower margin project and you have to match colors, there's some things like that that go into it. So that's typically where it gets a little bit more I don't want to say adversarial, but there's a lot more back and forth when you're looking at doing a repair as opposed to a full replacement.

Dan: Yeah, that makes a lot of sense. You don't want to have a patchy roof. I mean, in more ways than one, color wise, obviously just doesn't look good from the street. And obviously if you have got an a patchy roof structurally, then you're just inviting water. And water damage, as all landlords know, is not your friend at all. So, Max, that's a great way to kind of kick things off. What's the next story that you have prepared?

Max: Yeah, so what I thought would be interesting to talk about is I'll say Hurricane Harvey was a hurricane for those that you are not familiar with, that came through Texas in 2017. It made landfall in Corpus Christi, Texas, which you're not familiar geographically with texas, it's a pretty large community in central coast of Texas. Made a direct landfall there, which you really saw more the traditional, what you would think of a hurricane. So super strong winds, blowing houses over, ripping roofs off, really catastrophic damage. So Harvey made landfall there and then took a really slow, lingering course up the coast of texas towards Louisiana. And what ended up happening is there was an insane water event for Houston and Southeast Texas. So just tons and tons of rainfall. I don't remember what the rainfall totals were, but they're just insane numbers that you wouldn't even believe. So what ended up happening is in Houston and Southeast Texas, there was just tons of rising water. And you saw it on the news. People were just stranded on rooftops. It was kind of like hurricanes, not nearly as fatal or the level of loss of life as Katrina, but a very similar event in Houston. So at that time, I was actually not a field adjuster. I was an executive at the company I was working at. But it was all hands on deck for claims. So I was adjusting claims. I was taking first notice of loss from the customers and doing a lot of desk adjusting, which basically means field adjusters go out, they look at the claim, and then they send you a report and you kind of make the decisions behind the desk. So we had tons of customers who had flood claims, and some of them had flood insurance, some of them didn't. That was a whole different sidecar we could go into about that. But we had one very interesting claim where our customer, their tenants were, there was multiple feet of water in the house, so they had to take refuge on top of the roof, which you saw those videos on the news of lots of people doing at a time, which is horrible. So our tenants, our customers tenants were on the roof and they had to be evacuated. I think I can't remember if it was a Coast Guard helicopter or a US army helicopter. There was a lot of service, different services that were involved in the rescue efforts. So I can't remember who was flying the helicopter that basically this helicopter dropped over the house we were insuring, dropped a basket, like you see on TV with the Coast Guard rescue swimmers, and hoisted the tenants up into the helicopter. And so you can imagine that's not a quick process. A helicopter is sitting there hovering for a long time as it's hoisting up. I think it was like three to 4ft on the first day were in this house. And so while that helicopter was sitting there, it just basically removed almost all of the shingles that were on the roof so that that this house was perfectly fine during the storm. Like it flooded. That, that, that's not good. Obviously had flood damage, but the roof itself was undamaged. There was no high winds in Houston. It was just ton of rain. So in addition to having that the flood damage of multiple feet of water in the house, then their roof got blown off the helicopter, which was just crazy. That the amount of force that that helicopter has that's sitting there hovering, question those people up. Fortunately, that was a covered claim from our perspective. So the landlord was indemnified, but obviously not ideal when you're already dealing with a ton of flood damage.

Dan: That's crazy because, I mean, a helicopter, it's essentially whatever is below it is within the eye of the tornado. And if you're picking people up, I imagine you're pretty close to that house. There's a couple of things that comes to mind when a situation like that happens. Does the Coast Guard charge the tenant or the insurance company for that rescue? Or is this like a free service for the taxpayer outside of the roof? Does the Coast Guard give you a bill?

Max: No, they don't. So it's a service. So my cousin who I'm close with, is actually a rescue somewhere in the Coast Guard. So I know way too much about this topic. But no, it's basically like a free public service. There is no charge. Now, there are situations where the fire department has to come out like that type of more regular occurring public service where we do reimburse landlords or the customers in certain cases for those. But a really one off incident, like we're talking about the helicopter now, there's no charge to the insurance company.

Dan: Got you. Because I've heard of ambulances charging people like, you'd know better than me, but two, three, four, five thousand dollars to come and pick you up, obviously you're in an emergency. I'm just thinking that's a car, if it's a helicopter like that, could be, you know, a twenty thousand plus dollar bill.

Max: So those bills you're talking about, Dan, those would go to the Health, the medical insurance company. So for us, when we're paying the fire department is typically like when they come out to put out a fire, that's where we get a charge from the fire department. If they've like, committed resources to go out there and put out a fire, do whatever they're doing, we get bills for those.

Dan: Sure. In a situation like that, when there's just such heavy flood damage, is it more often that you'd rather just bulldoze the house and rebuild just because water is so tricky compared to doing a full gut rehab and fixing the house that way?

Max: You would think so, but the answer is no. So for all the rental property owners that are out there, like, flood insurance is so important. I'm always a big advocate of getting flood insurance, even if you think you're in an area where it's not going to occur because it is so catastrophic and it does cost a ton of money. So, Dan, to answer your question on flood damage claims, it's rare that you will demolish the structure unless the floodwaters, like, compromise the structural components of the home. So in that case, you definitely would. If it doesn't, typically what happens is you'll go into the home and you will basically cut out everything except for the studs up to a certain level in the home. And then you'll leave everything to dry until the moisture level gets down to acceptable levels. Because if you think about wood in nature, wood, trees, all types of wood get water and they are able to handle it. Obviously, water is what makes the trees grow. So the wood is more than capable of withstanding a lot of water, but it just needs to be dried out. Like if it lingers in the wood for a long time, you're going to have mold, you're going to have lots of issues. So it's really important after a flood event like that to go in and remove everything that's soaking wet, like drywall whatever wallpaper, flooring that's soaked, that's all got to go. And then you just kind of let the house dry out via fans or however you're going to do it.

Dan: Do you have a breakdown or a rule of thumb when it comes to how long a property will take to go from catastrophic flood to a livable habitable house?

Max: I can I will give you a rule of thumb, but I'll give you another answer before I go there. So in the event, like a Hurricane Harvey type event, the trouble with flood is typically there's going to be a fair amount of people that are impacted. So if you're looking like a Hurricane Harvey type event in Houston, building materials were just unavailable. Like there was no way for that inventory to be sitting on the sidelines for all those flood damaged homes. So what we saw was the delay was mostly due to, number one, contractors were extended and two, the building materials. You had a lot of band with. So I would say if your home is flooded today and you're one of a handful of people that were impacted by a flood of it, I would say you can go from sticks to rebuild like in three to six months. That's pretty reasonable. After Hurricane Harvey, it can take a year, maybe more. So that's a good plug. For a type of insurance that we call on the landlord side. It's rental income reimbursement insurance. So additional living expenses is another thing. You can claim it, but you want to make sure you have that coverage in place on your policy for flood is different because most standard insurance policies don't cover it. But within your flood insurance policy, get loss of rents coverage because that's what reimburses you for the income you would have had if the event had not taken place.

Dan: Yeah, no kidding. And I'm thinking of all the investors who may be from the up north, I'm thinking here in Chicago we get floods, sure, but we don't get catastrophic floods are pretty rare, like a hurricane type situation. Obviously we don't get them up here near Lake Michigan. But these landlords who went to Texas, to Florida and you just got hit hard by Hurricane Ian and you've got a property that is inhabitable for a year, right? You got to make sure that you got yourself you've got all the bases covered.

Max: My recommendation for landlords is we all mentally want to focus on the areas like Florida and Texas that do get a lot of press for flood. I totally recommend there's tons of websites out there where you can go enter your address on the website and it'll tell you whether you're at high, medium, or low risk of flood. A lot of people buy flood insurance based on what their lender says. So lenders use maps that are like 50 years old for flood, and that is not a good way. The lender is trying to protect their investment, but their means of telling you are very archaic. So definitely be proactive. Go look to see if you are in a high flood zone or not on your own. And don't rely just on your lender's information.

Dan: So we've covered business, right? Going number two on a roof, which nobody ever wants. We've covered. Well, I guess that's why they've got gutters, but we won't go there. We've covered flood damage and hurricane damage from helicopter rescues. What else do you have in store for us? What other stories are you able to share?

Max: Sure. So I got another one that you may find interesting. I had a customer call and filed a claim for a roof leak, which I probably adjusted thousands of those over the course of my career. Typically what happens there is there's shingles missing on the roof. They've gotten lifted or moved, and water gets in that way. A lot of times you got leaks, like around your chimneys or pipes on your roof, those sorts of things. So very used to that. So that's basically what I expected when I went to go inspect this claim. I think this one was actually in Fort Worth, not Dallas. So drove the location and the customer was like, yeah, I've got water coming in my living room. I can't figure out what's going on. I'm like, okay, I'll get on the roof, go take a look. So I go walk this roof. And the roof was really in mint condition. It was almost a brand new roof. There were no issues. Flashing was new. It was fine. And so then I started walking in the area directly above where the leak was, and I was like, wait a second, why is there's a hole here? And so I saw the hole, and I stuck my finger in it trying to figure out what was in there. Couldn't get anything out. Went stood up, and then I saw another two holes, like, pretty close by on the same slope. And so I couldn't figure out what it was. So I had to get down and go back to my car. And I got out a magnet that I used for car repairs that I had and then a pocket knife. I went back on the roof and sort of use my pocket knife. To try and figure out what was in here. And the first hole out pops the slug from a gun. I've by bullet hit the roof and made a hole in it was causing the leak. And so I was able to get three bullets out of this roof. And I'm like, what is going on here? Why are there bullets in the roof? And then I was like, oh, wait, it wasn't that long after 4 July. And you know, in some communities, like, shooting off firearms on the 4 July is a thing. So I'm guessing that's what happened if somebody just walked outside the 4 July shot a few times in the direction of my customer's house, what goes up must come down. And what came down, fortunately, was just in the roof. So it hit the roof, and then it got stuck in the decking under the roof. So it didn't go any further than that. Thank goodness it didn't go into the home. So that was obviously a huge positive. But yeah. And then I guess we had some rain after the 4 July between when I went out there and had a roof leak. It's just the weirdest thing.

Dan: Jeez, that's pretty crazy. And you're right. What goes up has to go down. So the bullet didn't go through the shingle, didn't go through the building envelope into the house. It just kind of lodged in between the shingle and that building envelope.

Max: Yeah, it takes a lot of force to go through a roof. And especially if you think about the structure of a roof, you have the shingles, or some people have tile roofs, let's just say shingles that most people have. And then you've got like a moisture resistant barrier, and then you've got decking that's sitting on your rafters and your roof. That's pretty much it. Those three layers. And then you have drywall that in between the roof and the inside of the home. So it takes a lot of force. If you have hail that's the size of a baseball, you can see that go all the way through into the house, through the sheet, rocking into the furniture of a home, or it takes a pretty big hailstone to do that. Does happen. But yeah, the bullets didn't make it through, fortunately.

Dan: How often do you hear about that? Because it's pretty wild that you end up finding out that you come down and you have to tell the owner that, hey, you got bullet damage up there. How often does that happen? And I imagine it's probably you get that a decent amount in Texas, right?

Max: Maybe. That was the only experience I ever had with well, that's the only experience that I ever had with bullets in a roof. I did have one other claim where there was a drive by shooting with a shotgun and it messed up somebody's garage, but that was a little bit different situation. So I guess I have had two bullet gun experiences.

Dan: That's interesting with the whole drive by situation. And I imagine that's just like a new garage door type situation or was it greater damage than that?

Max: I think it was a new garage door. So I think they didn't hit anybody thinking this. It was like a drive by decommission to blast somebody's house type thing. So I think we did end up replacing the garage door.

Dan: I think that was a pretty straightforward claim because I asked, because I get asked occasionally. And I don't know, maybe people think that I'm some insurance expert, which for the record, I am not. I know very little about insurance. That's why I talk to experts like you. And people oftentimes ask, like, is there a rule of thumb when I should give my insurance company a call about doing a claim or if I should just handle this expense myself? I mean, obviously, if it's a Hurricane Harvey, a whole flood damage situation, that's very clear. You call up your insurance company. But if it's something like a three or four or five or even a $10,000 repair, is there a rule of thumb when it makes sense to call to reach out to your insurance company?

Max: My rule of thumb would be, go look at your deductible on your policy. Some states, you're going to have only one deductible on your policy. Let's just use this example $1,000. Other states, like, let's just say Texas, the Southeast, Florida, you're going to have more than one deductible. So you could have a hail deductible, a regular deductible, and then in Florida, you could have a hurricane deductible, a hail deductible, and a regular deductible. So depending on what's happened, you look at your policy documents and you say, hey, how much is my deductible? Let's just use $1,000. You look at whatever damage you're thinking about filing a claim for. Maybe you even have a contractor. You call a friend that's in the construction industry and say, hey, this is what's going on. How much is it going to cost me? And if it's above the deductible amount, then for sure you want to file the claim. And if you're not sure, I mean, the insurance company is a partner in protecting your risk for whatever you're being insured for, and there is absolutely no harm in calling your insurance company and saying, hey, I do not want to file a claim right now, but I want to understand this is what I'm working on. Like, what is your initial impression of what's going to happen here? Your insurance company is not going to tell you whether it's covered or not until they do a full investigation. But if you tell them that, I don't know, it's a flood claim, and it's obvious that your policy does not cover flood, and they're going to tell you that in the phone. But if this is flood related to Hurricane Harvey, your policy with us does not cover flood. That's an easy on the phone conversation. So really you can use your insurance company as a resource. Look at your deductible. That's usually a good indicator of whether it's an event or some damage that's better off just being retained by you or filing with the insurance company.

Dan: I think that what a lot of people are afraid of is that reaching out and then having their rates go up. Right? And all of a sudden, just because you reached out or because you put in a claim, I guess that's kind of where people sometimes get a little bit gun shy about reaching out, and they'll be like, hey, it's just five grand, or whatever the case might be. I'll just do it myself and save myself that risk.

Max: So different insurance companies do different things, different states have different rules. So I can tell you what steadily does. So we do not charge for claims that are, number one, weather related. So if you've got something that is out of your control, we're not going to charge you anymore for that. And we also don't charge for claims that are under $500. Obviously you're going to charge. You call and just want to have an exploratory conversation. So I think speaking for steadily specifically, that's how we handle claims. So you can call and file a claim for a roof if it's been hailed on and you're not going to see any adverse impacts from that.

Dan: Very cool. Got you. All right. Well, Max, I think we've got time for one more story. Do you have one more good story, you know, in your book bag?

Max: Sure I do. Yeah. So a very interesting thing happened a few years ago. It was the first time I'd ever seen anything like this. There was a chemical plant in southeast southeast Texas. I don't think that made, like, major headlines in the news, but it was certainly newsworthy, particularly in southeast Texas and Texas where this plant I think it was called the TPC plant, a chemical plant down there, I think. In the early hours of the morning had an explosion, like a really scary, really scary thing where this plant partially blew up and the people that lived around the plant were woken up in the middle of the night or early morning hours with this massive noise and massive shockwave from the blast. So you'll see all these like ring doorbell cams or security cameras of like the moments before and after of just this chemical plant just going up in flames and the shockwave blew in people's windows for miles around and blew in garage doors. I don't think there were any fatalities, thank goodness, related to the event, which is good, but it was a super scary thing. I remember getting this is, again, it's scenario where we had a lot of claims, we had a lot of rental properties that we insured around the plan. So we had like an influx of claims. So I was helping out, taking the phone calls of customers that were impacted. And I remember this one older lady calling me and being like, yeah, I was impacted by this plant. And I walked out in my backyard and I have all these pieces of pipe laying all over my yard with this, like, weird stuff in it. And she was like, do I need to go, like, pick all this up? And I was like, no. Not only do not pick it up or touch it. Do not go anywhere near it. Just leave it as it is and call your fire department. It's going to clear out because this is like I think Southeast Texas is one of the probably the largest processing area for refinement of any kind of oil products. That's where all these refineries are. So I think I don't remember exactly what chemicals TBC was working with there wherever the part of the plant feels blown up, but certainly not stuff that you just want to be picking up with your bare hands and throwing in the trash. But it was a super scary thing. People were really worried about it. From an insurance company's perspective, it's not something that you think about every time. Like, imagine if you plotted every chemical plant in the US. And tried to mitigate that risk. You could do it, but that's a pretty tall order. In the insurance industry, we call that kind of an unmodeled event. So if that's something that wasn't anticipated, that you end up paying a lot of money on. But at the end of the day, there were a lot of people impacted by that and it was a very scary, unique event.

Dan: Is an unmodelled event similar to another insurance term, an act of God event? Or do those have separate definitions?

Max: I think you can have active God events that are not contemplated. So think of any kind of freak weather occurrence, like, I don't know, think of, like, a meteor coming from outer space and hitting somewhere and damaging property. It's an act of God, but it's not something that you really just think insurance companies are thinking about on a daily basis. That's an example, I think, that highlights what you're asking about.

Dan: Got you. Yeah, I guess a meteorite is a lot more that's more active Gotty than just somebody I don't know smoking at the wrong spot for the TCP plant. So how far out was the blast radius? Are we talking about houses getting, like you said, garage doors blown in within 5 miles. 2 miles? How big of an explosion are we talking about? It's been a while. I feel like the impacted blast radius was probably around 5 miles. And those people that were super impacted, they were probably within a mile. But there was a lot of houses within, like, a couple of miles, miles of that plan. It wasn't like a small number. That's scary. It kind of brings to mind that's something that was like on 60 Minutes a couple of years back and it was like bomb trains. Like all the trains that have got like, crude oil or oil in it. Like if any of them derailed, they're all pressurized or whatever. Explosions. Those are scary. Those are scary and definitely hard to model. It happens more frequently than you think. This is like a special circumstance. But I've had other ones where you just have a random residential business or just a business in a residential area and like a strip center. Maybe it's like a laundry mat or like a machine shop that explodes and damages a bunch of houses around there. I've had that happen too. Not on that large of a scale, but it happens a lot more frequently than you would think. Yeah, I bet. And what just comes to mind is explosions. More often than you think. Like meth labs, right? Like meth labs have got to be pretty explosive too, right? I know we're kind of short on time here, but do you have any experience with meth lab cleanups? I have to imagine you get a couple of those a year, right? I have been blessed to have not dealt with any meth lab explosions. However, it does not take too much of an imagination to see that happening on a regular basis. Totally get it. Max, thank you so much for taking a couple of minutes here and sharing some of these stories with us. Where can people go to learn more about you and just learn more about steadily, steadily. Make it easy. So go to steadily. If you're someone who likes to handle your insurance by yourself, you can quote, you can bind on our platform directly. You'll find that it is by far the most user friendly experience in the industry. And if you prefer to work with an agent, you can call us and one of our agents will be able to assist you. Or if you have your own preferred agent, a lot of them have access to steadily's products too, on a different platform. And you can call them and say you want to drive business, you want to get your properties insured through steadily. Awesome. We'll have a link for Steadily in the show notes next. Thank you so much for taking some time. I really appreciate it. Yeah. Thanks, Dan. I've relistened this conversation a couple of times and one phrase that keeps on hitting me kind of close to home is unmodeled event. Right. So when Max was talking about that TCP plant exploding, you can't model that, right? You can't model, I guess, an act of God, like a whole different term, a meteor coming and hitting that house so you can underwrite that property as conservative as you want, right? Repairs, capital, expenses. Oh, we're going to need a new roof in ten years and we're going to need to get new water heater and a new boiler. Yada, yada, yada. You just can't model life and life happens. Life throws stuff at you, which is obviously so important as to why you have insurance, to the point where lenders require that we have insurance, right? To make sure that we're responsible and that they are covered and they get their money back, even if there's an unmodelled event or an act of God. The last thing that I took away from this conversation is just how nice and generous the federal government is, right? They will come and they will save you from the roof of your house. If there's a hurricane and a helicopter that will cost them hundreds of thousands of dollars, that's pretty cool. I don't know why I would think that they would build that back. I mean, obviously that would bankrupt on some people and it'd be a horrible situation. But I just don't know why I would think that they would do that for free. It just kind of struck me as very interesting. So I guess that's why we pay our taxes. So that way we and members of our community are saved in situations like that. I guess that's why we have helicopters in the military to begin with, right? We will have a link to steadily in the show notes if you want to check them out. See if you can't save a little bit of money every single month on your rental dwelling insurance policy. And finally, before we head out, if you enjoyed this show, share it. Share it with somebody that you know that's looking to get into real estate or maybe somebody who's got a huge portfolio and just wants to learn more about what they can do in the real estate space. It would mean a lot to us. We're trying to expand. We're trying to help educate more people on how to do better deals, be better landlords, all that good stuff. Because at the end of the day, if we do better deals, we make more money and our tenants enjoy a professionally managed home. That's all I've got for you. You can find us on Twitter. You can find us on Instagram. Subscribe to our newsletter. All those links are in the show notes. Let's go out and do some great deals. Have a great rest of your day.

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