The Truth About Rising Texas Insurance Rates & How to Save Money

Brad Bingham
00:00:00

A couple of things about the, the coverage. A lot of people don't even realize what they cannot be comparing apples. Apples. But deductible is the same, Right? Right.

Because most companies in the old days, replacement cost was pretty much the standard.

Mike Mills
00:00:10

Right?

Brad Bingham
00:00:10

Right.

With the roof situation where it is, replacement cost is becoming, I would say, I'm not going to say obsolete because it's definitely not obsolete, but you've got insurance companies that are, that are slipping in their policies, some type of a payment schedule, depreciation, whatever you want to call it, it's all depreciation. Right. So as your roof gets older, the, the value of your roof goes down, which it doesn't.

It still costs the same to replace it, but the, the amount of coverage that they're going to give you goes down. Right. And so some companies will start out at year one where they don't even do replacement costs.

There's some companies that at the 5th year, the 7th year, the 10th year, 15th year.

So not all policies are the same and the deductible may be the same, but if you take a depreciated value policy that the roof's 10 years old and they depreciate at 3% a year, they're going to cut 30% of your value of your roof off just because it's not replacement cost. Right. And so if you buy a non replacement cost policy, they can sell us a lot cheaper because that's where they're saving money on their roof claims.

Mike Mills
00:01:04

Right.

Brad Bingham
00:01:05

And so not only deductibles, but the coverage is the same when you're shopping around and people just start stripping things out, they leave it up to you to lay it side by side and say, this is what I got and this is what I'm getting. They're not going to tell you anymore.

Mike Mills
00:01:16

Right.

Brad Bingham
00:01:16

This, this, this is where we're better. This is, this. I just got a cheaper price. Right, right. And right now, people just want cheaper.

Mike Mills
00:01:30

Well, hello everybody and welcome to the Texas Real Estate Finance Podcast. My name is Mike Mills and I am joined today with Brad Bingham of All State Insurance.

And without all the, you know, time consuming intros, we're just going to kind of jump right into everything and get rolling here.

So if you guys have been paying attention to your car bills or your home insurance bills, you have noted that increases in insurance has gone through the roof. And especially here in Texas, we've seen pretty dramatic price increases across the board. And it's not just one company, it's all of them.

And you know, Just to give you a little historical preference or a historical reference on this, I got something here. It says in 2023 insurance companies in Texas requested over 150 double digit rate increases with some as high as 73%.

And the trend continued into 2024 with 74 additional double digigit increase requests. So these requests, is that auto, home, Both. I think it's just kind of. No, I'm sorry, that's homeowners specifically.

Yeah, that's homeowners specifically, yes. And it says cumulative between 2014 and 2023, the number of double digit rate increases requested in Texas surged by 560%. Wow.

So to say that insurance has gotten unaffordable for many folks would be a bit of an understatement.

So what we're going to do today is we're going to unpack a little bit of the whys and what fors and see if we can come up with any ways possibly to even save some money. We did an episode, like one good.

Brad Bingham
00:03:01

Thing about it, it's cut my marketing budget down.

Mike Mills
00:03:03

Yes, absolutely. Pull that thing up to your face there, by the way. So Brad is here. We've didn't.

We've done an episode like this previously, but, you know, it's been about a year or so since we've gone through this and, and they keep going up. So we want to kind of revisit why we've gotten to this point. You know, different reasons now. Yes, yes, they're all different. So.

So let's start with Brad. Brad's been in business for 25 years. Really good friend of mine. We've known each other for a long time. Kids play sport together.

So we've, we've been around the block. I refer as a mortgage professional. I refer a good chunk if not all of my business to Brad. And not because we're friends, but because I trust him.

And he can explain things about how all this insurance works better than anybody else that I've ever met. And for, especially for me personally, I hate insurance. It makes me want to fall asleep.

So when I can call Brad and be like, what the hell's going on with this? He'll tell me the truth. And I know that he's doing that and he does that for my clients too.

So if you got anybody out there that is muddling through all this insurance BS and they need a little bit of clarity, Brad's not going to try to sell you. He's just going to explain it to it.

So, Brad, first off, give us a little Background as to why all these double digit rate increases have happened over the last couple years. And you know, what kind of the impetus of it. Is it all insurance based? Is it claim based? Is a little bit of both.

You know, where are we at with all this?

Brad Bingham
00:04:23

Well, it's, It's a lot. 25 years ago when I got in the business, an insurance premium for homeowners, it was like 5, 800 bucks.

It was, it was, it was a quarter of what we played.

Mike Mills
00:04:34

Or maybe even a, it's like a 12th.

Brad Bingham
00:04:36

Yeah.

Mike Mills
00:04:36

Depending on the policy we pay now.

Brad Bingham
00:04:37

It's pretty crazy, but we had great policies, we had low deductibles and the premiums were, were stupid, cheap. And so over that 25 years, obviously inflation happens the last four years with COVID and all the changes that have, have impacted the industry.

What we have a big issue with right now is just an availability issue. And people don't realize what availability means.

Mike Mills
00:05:00

Okay.

Brad Bingham
00:05:01

That means the number of people out there willing to take the policies on and you have to have enough companies that want the premium to, to have solid premiums.

And when you have less people that want the premium more, you know, the bigger companies have to absorb more and so they have to have to charge what they have to charge.

Mike Mills
00:05:18

So it's just competition. I mean, what competition in the expect in the respect of if you're not competing with anybody.

Brad Bingham
00:05:23

Right.

Mike Mills
00:05:24

But also too, if there is nobody to compete with, you kind of want to, because you don't want to bear all the, all the brunt of taking a particular area. Right.

Brad Bingham
00:05:30

So, so as a company, they don't want that. As an agent, I'll take what they give me. Right?

Mike Mills
00:05:34

Right.

Brad Bingham
00:05:34

And so availability is probably the biggest issue. I mean that happened in California. That's why what they're going through in California is just a completely, it's availability issue out there. Right.

Nobody wanted to sell. And at that point you have to have a good legal relationship with the state because everything's regulated by the state.

And so if you don't have good regulatory atmosphere to play in, it makes it very difficult. And that's what happened in California is just the regulatory system here. In Texas it's different.

Our, our state regulators, they still try to regulate, but they also want to have an availability situation where people can still get insurance.

And so when you have that, that double edged sword where you don't have a place to go and the rights are going up, it's the, they get kicked like a football. Right.

Mike Mills
00:06:20

So on the California thing I'm curious.

You know, we heard, you know, the Internet's full of conspiracies, but you hear about all this, all this company, these companies canceling the fire insurance like you know, three to six months before it ripped through the Palisades. How is that true? Or it was. Do you know anything about that? I don't know if in the insurance.

Brad Bingham
00:06:37

Circles, I can't imagine that would be like all staters, state farmer, when the companies, some come to Texas saying we're not going to sell hell insurance anymore.

Mike Mills
00:06:46

Right.

Brad Bingham
00:06:46

Well how do you just build that coverage out of the policy?

Mike Mills
00:06:48

Yeah, right.

Brad Bingham
00:06:49

You have to completely change the whole policy, start a new policy. I don't know what they do in California, but I don't think you could just come peel fire coverage out of a policy in Texas.

Mike Mills
00:06:57

Right.

Brad Bingham
00:06:58

So if they lost their homeowner's insurance in Texas, there's only a few reasons you can lose your insurance. Right. As long as you're willing to pay that premium, they can't just come take your insurance from you.

Mike Mills
00:07:07

Okay.

Brad Bingham
00:07:08

Now if you let your house get dilapidated, they can come inspect it and non renew you. Don't pay your premium, you can definitely get canceled.

And then in Texas, if you have three non weather related claims in a three year period, then they can non renew you, but they can't just non renew you for claims.

Mike Mills
00:07:23

Gotcha.

Brad Bingham
00:07:23

Right. So three non weather in a three year period in the state of Texas makes you non renewable.

Mike Mills
00:07:28

What would be non? I mean most, most claims these days are tied to roofs and things of that nature.

Brad Bingham
00:07:33

To me it's typically you got hail 65, but that's a weather.

Mike Mills
00:07:37

What I would say. What was non weather related?

Brad Bingham
00:07:39

Water. Like a water, a water heater, dishwasher, you know those probably the second most popular claim.

Mike Mills
00:07:45

Okay.

Brad Bingham
00:07:46

But you know, hell's what drives everything in Texas just like the fires drive everything in California. Everybody's got their regional issues and so Texas is just. Our weather has become very volatile.

You know, I'm not a conspiracy theorist about weather or anything, but you know, when I got in this business, we had one hell season. It was probably February, March to June, July, and that was your health season.

Now we've got that hell season and then we have the, the fall hill season when the weather's changing back. And then we have December and we have tornadoes down in Houston and in December. And so yeah, we had a bunch.

Mike Mills
00:08:22

Of hell like not before last, didn't we? Have you got calls yet?

Brad Bingham
00:08:26

I have not. Like we have hell somewhere every Day I woke up.

Mike Mills
00:08:29

I mean, we woke up in the middle of the night and it was just hammering on. I mean, we have a metal roof, so, you know, it sounds louder. Yeah, yeah, it sounds a little louder. But I mean, it was, it was hitting pretty hard.

Brad Bingham
00:08:37

Really? Yeah, I had one out, you know, I'm. I'm 10, 15 minutes from Mike's house. And I had one a few months ago where it was spat on the windows pretty good.

And yeah, nothing that did any damage. But you know, it's just the weather patterns, they're different.

And so when you have volatile weather, you're going to have higher premiums because we cover weather.

Mike Mills
00:08:55

Explain a little bit too how inflation impacts this. Because I think when people say inflation, their eyes glaze over like, oh, everything's inflation. But. But explain perfect example why that matters.

Brad Bingham
00:09:05

So this is a little different because we had Covid, but I tell this story probably every day in the office just so people can understand the explosion of the cost.

Mike Mills
00:09:13

Right.

Brad Bingham
00:09:14

2018, I have a customer by Lake Arlington. They have about a 2000 square foot, 2200 square foot house. Health hailstorm. We put a new roof on it. The insurance portion of that claim was $12,400.

Mike Mills
00:09:26

Okay.

Brad Bingham
00:09:27

That's 2018, 2024, the customer passed away. Is the state sold the property. They found new hail damage on the roof.

In the six year period that the new roof was on there, they would go to replace that roof. And the cost to that roof, if you want to guess, $34,500. Six years.

Mike Mills
00:09:45

Tripled. Yeah, basically.

Brad Bingham
00:09:47

Yeah, it's tripled. So you're talking labor. We can't triple our prices every year. Right. The state won't allow that. Right. So we talk about the regulatory.

We can go ask for rate increases. As you pointed out there at the very beginning, we have to continue to ask and ask because we can't get adequate enough.

Mike Mills
00:10:02

Oh, that's right. Yeah. Because you guys are so regulated like us, you can only raise your premium so much on a. And you have to get permission from the state to do it.

Brad Bingham
00:10:10

We're a file for eight state, which means we can take our rate. We do have to file. And if they don't find that rate to be adequate or it's predatory of some sort. Right.

Can come back and penalize you and make interest back and all that kind of stuff. Okay, so we can take the rate, but we do have to file for the rate. Right.

Mike Mills
00:10:25

You have to prove that it was. That it was justified. Got it. And so with pretty easy to justify.

Brad Bingham
00:10:30

These last few years with those costs.

Mike Mills
00:10:32

Yeah, I mean with the cost. I mean just, just when you look at materials, you look at labor, wood, everything that goes along with that.

I mean, you know, I guess it's, it's just added an extra layer. And then not to mention, like you said, all the weather events that have happened.

I think I read, I mentioned this last time I read somewhere that we had had, you know, it was, I think when they measured from like 2020 to 2021 to 2020, it was like a three year period.

It maybe been prior to 2020 they went from, you know, say 10 what they call significant weather events a year, which would be in the way they defined it was anything over you know, a billion dollars or whatever. And it went from 10 to like 20 the next year and then to like 40. The like, it was basically doubling every year.

And it had to do with more weather events, but it also had to do with the cost because it was defined as a billion dollar event.

Brad Bingham
00:11:23

I think a lot of it comes down to population as well. Yeah, I mean we. Last year, in the 25 years, I've never been in a market where they really just shut areas down that they're not right.

New policies or if they do, there's certain criteria in the last year, the number of companies that just didn't want coverage in certain areas. The four counties up here in North Texas, Dallas, Denton, Collin and Tarrant county, we have such a population growth.

I think that's a big part of as well. I mean small people out here in Mansfield, 10 years ago we had, you know, it wasn't rooftops, it was, it was cow, it was cow pastures getting hit.

Right now all those cow pastures have rooftops in them.

And so when you have the explosion of the population growth, the population growth and the number of rooftops, it's just every time it hails, something's getting hit, Right.

Mike Mills
00:12:13

Something's getting paid out and hit because it's damage.

Brad Bingham
00:12:15

Yeah. So it's just, it's a multitude of things. I mean it's just a perfect storm. I mean Texas is growing faster than any state out, out there.

We can't keep up with inventory here. So they're just going to continue to keep building. So I don't see the problem going away.

Yeah, I mean unless the cost of roofing comes down, I just don't see that, you know, cost construction period. But you say roofing because it's 65% of the claims, right? Yeah, that's 65% percent of what we do is going to be a rooftop.

So when that's tripling in a six year period, what do you think your rates are going to do? We're not going to lose money as an insurance company.

Mike Mills
00:12:51

So are you having more, are you seeing more and more uninsured individuals especially. I know it doesn't happen on the home side of things because they can't. If you own a home you can, but on the auto side you can.

Brad Bingham
00:13:00

If you own a home. If you, if you have a mortgage, you can't.

Mike Mills
00:13:02

Correct? Yeah, yeah.

Brad Bingham
00:13:03

So most people have a mortgage. So it's very unlikely.

But yes, you know, it's your older generation, they call and you know they're, they'll raise the deductible to 5 when they try to cancel the policy. Our, our response to them is, look, raise your deductible to 5%.

Mike Mills
00:13:18

Yeah.

Brad Bingham
00:13:19

Have, have a thousand dollar fifteen hundred premium. That way if your house burns the ground, you get a tornado. It does. Destroys your house. You have coverage. Right.

You're not paying this all out of pocket. Right. Some of them are, you know, they're okay with that. Some of them are, I don't want it, I don't need it. And they cancel it.

And so yeah, they do go uninsured. I can guarantee. I used to never see people going uninsured because it was affordable.

Mike Mills
00:13:40

Right, but that's on homes.

Brad Bingham
00:13:42

On homes, right.

Mike Mills
00:13:42

What about cars?

Brad Bingham
00:13:45

Oh, I mean it's just so much liability that you're taking on with, with a car, I mean.

Mike Mills
00:13:51

Well, of course, but I know around every day. No, no, I'm not saying, I'm not advocating for it. I'm saying are you seeing that increase because it has gotten so expensive?

Brad Bingham
00:13:58

I don't know if I have the statistical numbers to prove that. Yeah, I would think that it's, it's become more afford. Unaffordable for people to drive.

So I think affordability is a lot of the reason people go uninsured.

Mike Mills
00:14:08

Right? Yeah.

Brad Bingham
00:14:09

So. But I would assume, yes, we have more uninsured.

Mike Mills
00:14:13

Like when you, I guess what I'm asking is like when you get, because you obviously get auto claims. Right.

How often do you see them come across and say I hit somebody and they're uninsured or they hit me and they're uninsured, you know, one of your customers or whatever. Do you. And is it. Has that increased that uninsured doesn't stick.

Brad Bingham
00:14:29

Around, they just take off?

Mike Mills
00:14:30

Yeah.

Brad Bingham
00:14:30

So it becomes uninsured.

Mike Mills
00:14:32

Sure have. That has. Do you feel like that's increased or you feel like that's about the same as it's always been.

Brad Bingham
00:14:35

I think it's probably a little bit.

Mike Mills
00:14:36

More than okay, but not dramatically. Nothing that you. Okay, well, I mean, that's good to know at least. I mean, if it's, you know, when you add in more population.

Brad Bingham
00:14:44

You know, when you're not paying your bill, we're calling to remind you politely, hey, yes, we didn't get your premium payment. Yeah, yeah, those folks, they don't care if you cancel, right?

Mike Mills
00:14:53

No, so they don't care. So how much on the insurance side of things? I mean, we know the cost for, you know, the repairs have gone up. We know the populations increase.

We know, you know, the weather events have increased, all this stuff.

But I mean, you know, just, just seeing what you see on the corporate side of things, you don't have to speak specifically about your company, but how much do you think insurance companies are trying to take advantage of this? Or how much do you think they just can't because of the way the laws are?

Brad Bingham
00:15:19

So I think that they went a while. Quarters of losses.

Mike Mills
00:15:24

Okay.

Brad Bingham
00:15:24

So when we went through the 2020-2024 with the cost exploding and everything, there were quarters that insurance companies had underwriting losses.

Mike Mills
00:15:34

Right.

Brad Bingham
00:15:35

And I'm talking, you know, you're talking 4, 5, 6, 7 quarters in a row where they're taking losses. They're just not going to continue to take those losses.

So I think what happens is kind of a snowball effect is they just, we got to take more, we got to take more, we got to take more. And then. Have we taken too much? I don't know.

Mike Mills
00:15:51

Yeah.

Brad Bingham
00:15:51

I don't know the answer to that. But I can tell you when I see these guys going and doing their quarterly reports, the profits these days are a lot better than they were.

Mike Mills
00:15:59

Yeah.

Brad Bingham
00:15:59

Two, three years ago. Right. And so there's, there's always a, there's got to be a correction, hopefully of some sort.

I, I just don't know when it's coming and if it's coming. Yeah, I'd like to see it come.

Mike Mills
00:16:11

Will you also explain. I mean, I know this, obviously, but I want you to explain.

Anybody that hears this, I think people have a misconception that if they call you, Brad Bingham, to get an insurance policy that they can, you can negotiate some rates for them, you know, try to work some. Hey, we're buddies, Brad. Magic wand, work it out for us, you know, and, and I know that you can, obviously you.

We can adjust different coverages and whatnot. You can talk about that. But, but explain how it generally works.

So when someone calls you and says, hey, Brad, my interest, what can you do to help me out? Can you do to help me out here? Well, explain that a little bit.

Brad Bingham
00:16:50

He says it's very difficult.

Mike Mills
00:16:51

Right.

Brad Bingham
00:16:52

I mean, these, the systems are, they're made kind of dummy proof now, where it used to be a little bit more difficult. I could pull a manual out and I could give you a rate out of a manual. Right now they want everybody to be able to do it online or, or on the phone.

So they try to make it easy. Right, right. And so there's not a whole lot of variables these days that change premiums. It's really just your coverages. Right.

And so obviously, insurance is risk. The more risk you take, the less you pay, the more risk you want them to take, the more you're going to pay. So there's the give and take there.

And so what most people are doing right now is just, they're raising deductibles.

And it, it hurts me because I went from, you know, 250 to $500 deductibles back in the day when I started to a 2% deductible on your roof or some are doing 3% deductibles on roofs.

And you know, that's great when you reduce your price by 800 to a thousand bucks a year, but when you got to pay 6,000 more out of your pocket next spring, you know, it, there's a, there's a risk reward there.

Mike Mills
00:17:53

And another, this is another simple question or another simple answer, I should say.

But, but I want to, I want to make sure that again, people understand this, explain how a deductible works because I, it's still like, look, I talk, I talk finance and mortgages all the time, and people don't understand. I literally talk to people every day that don't know how much money they make. Like, that blows my mind.

I will ask them what, you know, how is your, how do you get paid? What's your, what's your salary? How do you make hourly? Like, oh, I don't know. I'm like, you give me a ballpark. You don't have to be exact.

Like, just an idea. I have no idea. I have to look, I'm like, you don't, you don't have an idea of how much money you make. So, yeah, they need a cheeseburger boy.

But so my, my expectation would be that the deductible concept, because I'll admit, up until probably about five or ten years ago, because I didn't give a damn about insurance as far as paying attention to it. I didn't really know what it exact. I knew what it was, but I didn't know how it was determined and all that. So, yeah, it's.

Brad Bingham
00:18:48

It's pretty simple. It's your stop loss. I mean, where do you want to stop paying?

Mike Mills
00:18:51

Right, Right.

Brad Bingham
00:18:52

So if you're okay with the first $5,000 out of pocket for a loss, that's Your deductible is $5,000. The carriers kind of determine what they allow you to choose as your deductible. You can't just say, I want an $851 deductible.

Mike Mills
00:19:05

Right. But it's a percentage. Or they have certain.

Brad Bingham
00:19:08

Yeah, yeah. So with, with my carrier, you have a flat deductible, 2000-2500-3000-5000, 7500, 10,000.

Mike Mills
00:19:16

Right.

Brad Bingham
00:19:16

Most carriers don't give options like that. They just say you can get a 1%, 2%, 3%, 5%, whatever.

Mike Mills
00:19:22

That's the percent. 1% of the dwelling value.

Brad Bingham
00:19:25

So whatever you're covered for, not your market value, your replacement value, you have a $500,000 house, 1% deductibles, $5,000.

Mike Mills
00:19:31

Right.

Brad Bingham
00:19:32

2% is 10,000. Right. And so back in the old days, you know, just like the example I had earlier, $10,000 that almost paid for the guy's roof.

Now, that's our deductible, right. Because our roof is $35,000. And so, you know, it's kind of all relative.

But, you know, people say, I can afford this now, but when it comes time that you have that loss and your car just broke down and, you know, I. I explain people's deductibles to them because it's very important.

Mike Mills
00:20:01

Right?

Brad Bingham
00:20:01

Right.

Mike Mills
00:20:02

Well, that's the part that you're paying out of pocket.

Brad Bingham
00:20:03

That's what you're paying out of pocket. And so back in the old days, people, oh, they'll just eat my deductible. Well, there's. There's laws against that now. Right. So it's always against.

Been against the law. It's just what enforced everybody forcing it. Right. And so you got the people that want to do the things. But.

But look, they're charging it somewhere, right? I mean, they're not making less money.

Mike Mills
00:20:22

Yeah.

Brad Bingham
00:20:23

So are they overcharging the insurance companies? Probably. I mean, just, you know, get off the roofs for a little bit and talk about a water Claim. Back in the old days, I, I have the, I'd have them.

Hey, get the, get some restoration people out here. Let's see how much damage you have because you have this deductible. And if it's not at your deductible.

Mike Mills
00:20:40

Then why would you allow it?

Brad Bingham
00:20:41

Right. And, and so now these water restoration companies come out there. Well, it always starts with a plumber, right?

So the plumber, the plumber comes out, fixes the problem, and then he's got his buddy that does restoration and he brings his guy out there and they've got, yeah, we'll dry you out. We got our van out. It's already out front. We can do this right now.

And so they, they, they get in the deal and they're, they're giving a kickback to the plumber. Right. And so they're going to charge somebody for that kickback. And so a water claim I could use to.

They would be under deductibles and we wouldn't file a claim. Now a normal water claims, 15, $20,000. And so there, there, there's. It's the, the cost of all these claims have just got stupid and a lot of it.

There's some greed in the system. And, you know, I do a lot of these days when I'm at the office, I'm fighting claims, and it's not fighting because they're not covered.

It's fighting with a contractor that says they want to do this and this is how much it's going to cost. And Allstate says, well, we can get it done for this. And there's a common ground. You always got to get to it. They're always asking for the mountain.

Right. I want $50,000 for this $20,000 job. Well, don't we all?

Mike Mills
00:21:44

Yes.

Brad Bingham
00:21:44

Right, right. But who's paying that premium? Yes, we are.

Mike Mills
00:21:46

Right.

Brad Bingham
00:21:47

And so there's, there's a lot of that in, in the system, too.

Mike Mills
00:21:50

Yeah.

Brad Bingham
00:21:51

And it's the adjuster job. Everybody looks at an adjuster as, man, these guys just don't want to pay me.

And they're like, well, it's their job to make sure that you pay a fair premium for your policy as well. And so we're not going to just pay. Pay for things that aren't covered by the policy. Right, right. So they have a really tough job.

I mean, it's probably the toughest job. I tell them all time in an insurance company, the adjuster is the face of the company.

Mike Mills
00:22:12

Everybody hates them.

Brad Bingham
00:22:13

They hate them. Right. The insurance company Hate me too. Right? I mean, when you turned me on this morning, I'm, I'm surprised they weren't throwing eggs.

I can't see eggs being thrown at the screen, but there probably was. Yeah, but I get it. I mean, I pay my premium and when I, when I pay it, I cringe, too. So.

Mike Mills
00:22:27

Yeah, it's not like you get a break there.

Brad Bingham
00:22:28

A little 5% discount.

Mike Mills
00:22:29

Yeah. All right. You, you said something about claims a second ago that you kind of blushed through.

But I elaborate on a little bit, too, because I think the general public assumption about insurance agents in general is like, well, when I call you and you tell me, probably try not to make a claim. Well, of course you don't want to make a claim. You don't want to have to pay out. Right.

Brad Bingham
00:22:49

But we don't want to pay $30,000 out of our pocket for nothing either.

Mike Mills
00:22:51

Exactly. So.

So can you explain a little bit about the mentality behind, you know, not only you're not trying to talk about making a claim, you're just trying to help them understand the math equation of how much is it going to cost you to, to do it on your own versus what is going to impact on your premium by having this claim and how to change.

Brad Bingham
00:23:08

So we go through that all the time. When they, when they call and they say they've got a situation, you know, I, I'll counsel, I counsel all the time.

Mike Mills
00:23:13

Which, which, by the way, I want to. Why, before we start that. This is a part where I want to explain why, when, when.

As a mortgage professional, I have people call me and they want to use GEICO or Progressive, which, whatever. I don't, you know, no knock against them. I'm saying this, this isn't. Brad.

I typically tell them if, when it comes to your house, you know, I know everything's bundled now, so it's hard to do them separately.

But when it comes to your house especially, you do not want the 1, 800 number, because if you've got the 1800 number, you're going to be in phone tree hell. They're on your side for two days and they're going to beat you up and push you to this person until you kind of just give up.

I, I really, truly believe the business model in those circumstance is to filter you through as many channels as we can. And if you're going to hang on. Yeah, eventually you're just going to get pissed off and go away.

So the idea that, you know, that, that you need somebody when it's time to make A claim when my, when my wife backs her car, her, her new Tesla into a rock in a parking lot, you know, at, at a restaurant, I need her to be able to pick up the phone and call somebody and say, okay, what do I do?

Brad Bingham
00:24:19

I have a real good one for you.

Mike Mills
00:24:20

Yes.

So my, my whole point of all this is to say when you're picking insurance providers, at bare minimum, I'm not saying you got to use Brad, I highly recommend it, but at bare minimum, use somebody that's an agent model that you can pick up the phone and call them and ask them what to do, that they can walk you through it because there's so many pitfalls.

Brad Bingham
00:24:36

Time to do it.

Mike Mills
00:24:37

Yes.

Brad Bingham
00:24:37

Yeah, some just want to sell you a policy these days.

Mike Mills
00:24:39

Sorry, I didn't want to end of that. But okay, so go into, someone calls you and they say, okay, this is what happened.

Brad Bingham
00:24:44

So they, you know, they call and say they have a hot water discharge on the floor.

Mike Mills
00:24:47

Right.

Brad Bingham
00:24:48

And I've got carpet or I've got wood or depending upon what they've got, it depends on how much the claim is going to be. Right. So first thing you got to do is get it professionally dried out. Get it dried out.

You want a good reputable company that's not going to come rip your head off and say, oh, how big of a insurance claim can we make this Right?

Because there's times I tell the I, I'll get on the phone with their contractor and say, look, either treat this like your grandma or we'll call the next person. You don't have to do this job.

Mike Mills
00:25:12

Yeah.

Brad Bingham
00:25:13

There's other people out there, right?

Mike Mills
00:25:14

Yeah. I can work with you or I.

Brad Bingham
00:25:15

Can work in the kitchen. Doesn't mean you got the job.

Mike Mills
00:25:17

Yeah, they know me. They don't know you. And I can work against you or I can work with you.

Brad Bingham
00:25:22

I'll be the jerk.

Mike Mills
00:25:23

Yeah.

Brad Bingham
00:25:23

So, you know, I'll explain to them, you know, let's keep the cost down. Let's, let's, let's help the customer out.

Let's do the right thing for the customer, which should be the center of everybody's idea of what's right for the customer, not what's right for my pocketbook.

Mike Mills
00:25:36

Right.

Brad Bingham
00:25:37

And so if we can, if we have situations where we can get that dried out and we can replace that carpet and it's not over your deductible, then there's really no need to file a claim or even it may be over deductible by a couple thousand dollars.

Mike Mills
00:25:49

Right.

Brad Bingham
00:25:49

But you're looking at $5,000 out of pocket, or you're looking at your insurance going up $700 for the next five years.

Mike Mills
00:25:55

Yes.

Brad Bingham
00:25:56

Right. So there's a fine balance there of what's the real reward here? And if you don't know that, you may be filing claims that aren't benefiting you.

Mike Mills
00:26:04

Right.

Brad Bingham
00:26:04

And so as an agent, if you have a good agent, it's their job to explain, hey, look, here's what your policy does. This is how it works. This is the type of claim that doesn't affect you, so file it, it's okay. Or this is a claim that this one's going to hurt you.

And this is the benefit of it. This is the, the, the, the, the cons of doing a claim. And you got to figure out what's best for you.

Mike Mills
00:26:22

Right. You said you had a, you had a story about cars backing in the parking lot.

Brad Bingham
00:26:27

No, no, I, I have a story about. So I have, have some really good clients of mine. They're, they're always a joy to talk to. They're probably 50, 51, mid-50s, something like that.

Mike Mills
00:26:37

Right.

Brad Bingham
00:26:37

So they teach their children at a very young age that they need a Brad. Right? So, okay, you need a Brad because when you need him, you got to claim this.

Mike Mills
00:26:45

What?

Brad Bingham
00:26:45

You, you got to call Brad.

Mike Mills
00:26:46

Right.

Brad Bingham
00:26:47

And so the other day they've had a claim that's been going on for a while that's. They had a storm chimney pulled off the house and so fill in the pool. And so they've been having a pretty nasty time with their claim.

And their daughter, their daughter looked at her the day and she was having some issues and she goes, mom, why wouldn't you just call Brad? So I love it when a 20 something year old is telling 50 year.

Mike Mills
00:27:06

Old, mom, yeah, what are you doing?

Brad Bingham
00:27:07

Call Brad.

Mike Mills
00:27:08

Yeah, what are you doing? What are you doing?

Brad Bingham
00:27:09

That's what they trained him, right?

Mike Mills
00:27:10

Yes. Yeah, they taught him the right way. That's good. Yeah.

Brad Bingham
00:27:12

The younger generation doesn't believe in that. Right. They just like, how quick can I get this and get it off my.

Mike Mills
00:27:17

They want to Google it and see what they can find out there. Yeah. I mean, it.

Look, there's a lot to be said for knowing and having somebody on your side that can help you navigate through things and figure out what's going on.

Because the insurance process and the claims process is a nightmare if you haven't been through it before and you know, don't recommend it on to anybody. Sometimes, yeah, sometimes it can be okay. But for the most part, it's kind of a huge pain in the ass.

So at least having someone that can say, okay, try to do this. Make sure you say that. Whatever. You know, just walking you through how to file it if you need to.

If you actually need to file, maybe you don't need to.

Brad Bingham
00:27:47

Or you got a contractor telling you something, and those are red flags. I'm like, hey, it's time to find the new one.

Mike Mills
00:27:52

Yeah.

Brad Bingham
00:27:52

Right. This is not the person you want in your house.

Mike Mills
00:27:54

Yeah.

And that's difficult, too, because unless you, you know, regularly have issues on your property, then you don't know very many people that are contractors. And if you're going, you know, unless you're going to Mansfield Mom's talk or you're going to, you know, all the.

Brad Bingham
00:28:10

Good ones out there.

Mike Mills
00:28:10

Yeah, yeah. Somewhere on Facebook or whatever, then, you know, you don't know who to call.

And then these guys come in, and there are really good ones and there are some really bad ones. And I mean, I can speak from personal experience I've had.

Because this house is just old and has stuff go wrong all the time, and this damn gate in the front is. Is constantly a pain in the butt. And I've had multiple people come out and look at it and all. I mean, I want to be a renter, Mike. 80.

Yeah, I would say 80 of them are wrong. Well, if I had been a renter, I wouldn't have the equity that I have right now. So. That's true. Practice, whatever.

Yes, I practice what I preach on that for sure. But, you know, having someone that you can trust, that's going to tell you the truth and not try to take over the calls, and, man, I will.

I can't even tell you how many people that I've spoken to that speak with a ton of confidence, like, oh, well, this is what you need to do, and blah, blah, blah. And then they totally mess it up or they don't show up back because they realize they were wrong.

And then somebody else comes out and you're like, well, the last guy said this. And like, that guy's a.

Brad Bingham
00:29:05

This is over promisers and under deliverers, Mike. It's.

Mike Mills
00:29:09

It's crazy. And so, like I said, just having a person that can help you navigate that stuff when it comes to the claims is so important because you just can't.

You can't replace the knowledge and the wisdom that they have. And, you know, it's.

It's the old adage, like, when you hire a plumber, you don't pay the plumber $500 for his 30 minutes of work that it took to fix the thing that you didn't know how to do.

You're paying him for his 20 years of experience knowing exactly how to fix that thing when he came to the door and so, and fix it right so it doesn't break again most of the time.

Brad Bingham
00:29:38

So unless you know another plumber that'll do 300.

Mike Mills
00:29:40

Yes, yes. You told me a little bit about, we were talking before we started about, you know, like I said, we know inflation's had a big issue.

We know weather events have had a big issue. Population, concentrated areas, lack of competition.

All these things have kind of driven prices up a little bit of insurance companies trying to recoup losses that they took in the beginning as well. But fraud these days, or, or you know, if, if you want to be nice and not be technical about and call it direct fraud, but for the most part, fraud.

You know, these days everybody's incredibly.

Brad Bingham
00:30:17

Litigious.

Mike Mills
00:30:17

Litigious, yes. So talk a little bit about how that works on the auto side. Yeah, yeah.

Brad Bingham
00:30:24

So.

So the last, last four years, starting in Covid, it was all about parts and log jams and can't get your car in the shop was sitting in rental cars for two year, two months, whatever. Now what's really kind of pushing the, the rates for auto is bodily injury claims.

Mike Mills
00:30:45

Okay.

Brad Bingham
00:30:45

And it's all driven by attorneys. Attorney represented claims are through the roof. The payout on attorney claims are higher than non represented attorney claims.

And you're sitting there saying, oh, so you're saying I can make more money. Well, the attorney's making money too, right? So what I tell people all the time, like, do I need an attorney?

And I'm like, is the insurance company not treated you right? And they're like, well, I haven't even talked to them yet. Then why do you need an attorney? Right, right.

You need an attorney when somebody doesn't do you. Right. And if you give them the opportunity to do you right, then maybe you're in a position that you get treated. Right, right.

And you didn't have to go through a fight for two years because when the attorney gets involved, it's a fight for two years as long as you're willing to settle it. You know, wait out and not settle. They'll just keep dragging it out.

Mike Mills
00:31:27

Yeah, yeah.

Brad Bingham
00:31:28

And so on the bodily injury side of things, it's, I mean, it's disgusting. Yeah, it's absolutely disgusting. And it's, you know, you get the attorney up front. Then they're going to find you a doctor to see you.

Whether the doctor is a good doctor.

Mike Mills
00:31:43

Yeah, it's like its own little ecosystem.

It is, because those attorneys know the doctors that are going to do what they need to do and collect as much as they need to make sure that you get the amount that they want to get.

Brad Bingham
00:31:52

That's right. And. And when they get that amount, then they'll turn around and negotiate a. A figure with that doctor. Right.

Because they're not getting the $30,000 bill they provided you. They're getting probably 15 of that. Right, right. And so it's just a circle. It's a circle game. And we're paying the premiums, right?

Mike Mills
00:32:11

Yeah, it sounds good. If you're, if you're the one. I mean, it's, it's unethical, but if, if you're the one making the money, they're like, oh, I'll make my money.

But everybody else is paying for your. You making your money because all the premiums get spread out amongst everybody else because you're suing the insurance company. And there's.

Look, there's a reason that the Texas Hammer can afford to pay for commercials, you know, for the Super Bowl. During. Yeah.

Brad Bingham
00:32:35

During the Super Bowl.

Mike Mills
00:32:35

During the Super Bowl.

Brad Bingham
00:32:36

Like, I think that one guy's getting on his jet during the Super Bowl.

Mike Mills
00:32:39

Yeah, the law. We, the. What's the guy's name? We call it. We have a turkey here that. She calls it the, the law turkey. I can't remember the guy's name.

There's another one that's on TV all the time. But, but those guys, they're on everything. Yeah, they're on everything. They.

And you don't pay for commercials like that unless it's a lucrative business that you're making a lot of money.

Brad Bingham
00:32:58

I've always told commercials are the most expensive line of advertising. Yeah, but they send. They spend a lot on them.

Mike Mills
00:33:03

Yeah, well. And you know, you think. And I, I think it's a good point because when you were talking about is the insurance company wrong? And I'm not.

Look, we're not here, I'm not sure. Shilling for insurance companies, I don't feel sorry for billion billion dollar companies.

But at the same time, and everything is effect on a lower level, and we were dealing with a human being on the other side, and you're saying, hey, look, I'm trying to help you. Trying to work. You work through this with you, and I'm going to help you, and it's going to make sense.

But if you go get an attorney now, this is an adversarial relationship, and now we're not on the same page, and I'm not going to help you. And then you're going to have to figure that out on your own and hope that that attorney that you saw on TV is doing you right.

Because if you think that he's looking out for your best interest, you're crazy. He's looking out for money. He's trying to get paid.

And, and that's, I mean, this, this ties back to the, the recent stuff with nar the national association of Realtors and the commission settlements that they made with all these plaintiffs in this Sitzer Burnett case. Because, and I don't. I'm gonna mess the number up. But let's say they paid out $380 million or billion dollars or whatever it was, millions.

I think the attorneys got 85 of that money. Oh, yeah, because of the billing hours that they put into it.

I read somewhere that, like, the average plaintiff that actually was a part of that class action suit got something like 30 bucks. Or I mean, something ridiculous like it was, well, well, bullet maybe in a couple hundred. But whatever it was, it was not worth all, like, divorce.

Brad Bingham
00:34:27

Right. The attorneys, only the ones that make out on those.

Mike Mills
00:34:30

Yes.

And so, you know, when you look at that and you go, okay, the attorneys are the ones making the way and they're making the most of the money on the settlement. So who is the attorney looking out for? They looking out for you or they looking out for their pocketbook? And I think we all know the answer to that.

Brad Bingham
00:34:43

How deep they can get.

Mike Mills
00:34:44

Yeah, yeah, it's, it's unfortunate that they're.

Brad Bingham
00:34:47

Not coming to your Christmas party next year.

Mike Mills
00:34:49

No, no, no, they're. They're certainly not. No, they're certainly not. All right, so things are expensive. We know this. This is what it is.

And, you know, all you can do is kind of learn the ro the rules of the game and try to navigate those a little better. So I want you to explain now kind of about how if I x insurance company, okay, and same exact search of circumstance, me, the house, everything else.

My premium is 200 bucks a month. Okay. Then I call y insurance company and my premiums, $350 a month in the same area, same thing. What is.

What is likely to have occurred in that scenario, knowing nothing else about it.

Brad Bingham
00:35:30

Man, some of these rate increases I have seen have been stupid. Right, right. And, and because they can't non renew you, the only thing I can think they're doing is running the business off. Right, right.

And so you have different sizes of companies, different availability of, of, of risk. And so one company may have more availability. Right. For every dollar we bring in, we got to put money up in reserves to be able to sell that premium.

Mike Mills
00:35:56

Yeah.

Brad Bingham
00:35:56

Right. And so if you've got somebody with deeper pockets, they've, They've got more leverage than somebody with less pockets.

So they all face the same risks.

Mike Mills
00:36:07

Right.

Brad Bingham
00:36:07

They all face the same costs. You would think premiums would be relatively the same, but it just comes down to a company that wants to be in the business in that area or not.

And so sometimes you just got companies that don't want to be there, and they'll sell it. They'll sell a price that you don't want to buy at.

Mike Mills
00:36:22

Well, that's, yeah, that's certainly part of it. But where I was kind of going with that question was more about how they change coverages on you.

Brad Bingham
00:36:28

Okay.

Mike Mills
00:36:29

Without you realizing I got you.

Brad Bingham
00:36:30

Yeah. I wasn't picking up what you're doing down there. Right. So, okay, so you're comparing your current policy to a new policy.

Mike Mills
00:36:36

Correct.

Brad Bingham
00:36:37

Right.

Mike Mills
00:36:37

Or just, just two new policies together.

And you're just looking, as a consumer, you're just looking at that bottom number and you're going, oh, this, I like this bottom number better than I like this bottom number.

Brad Bingham
00:36:46

And so their, their proposal may high deductibles or different coverages.

And so, you know, I always tell my staff and, and, and myself when I'm selling a policy, I sell policies how I would buy them, not for the price of them. Right. And so I start out with the quote of what I want. Right. And so I'm going to put the sewer backup coverage on there.

I'm going to put the coverages that I want on a policy, and then I explain them to the customer and say, these are what these coverages do. This is how much they cost. It's your choice whether you want them. I would purchase the policy with them. But if you want to cut that out, you can.

Mike Mills
00:37:16

Right.

Brad Bingham
00:37:16

A lot of agents start the opposite way. They start with everything out of it.

Mike Mills
00:37:20

Right.

Brad Bingham
00:37:21

With the cheapest price.

Mike Mills
00:37:22

Yeah.

Brad Bingham
00:37:22

To see if they can get the policy.

Mike Mills
00:37:23

Right.

Brad Bingham
00:37:24

And then if they see your comfort level is, oh, okay, I like this. Like that. And they may try to upsell them.

Mike Mills
00:37:29

Right.

Brad Bingham
00:37:30

Everybody has their way of selling things.

Mike Mills
00:37:31

Sure.

Brad Bingham
00:37:31

Right. I, I'm, I'm very transparent. I sleep very well at night just because when I talk to somebody, they Know what they're getting. Right, Right.

And it's just crazy to me. And you know, the roofer, sometimes they'll. These people had no idea what their ductable was.

Mike Mills
00:37:45

That's. Yeah, that's the biggest one. A lot of times they don't even realize.

Brad Bingham
00:37:48

Yeah. The roofer comes like, hey, yeah, didn't know he had a $12,000 deductible. I'm like, well, that's why his price was $2,000 cheaper.

Mike Mills
00:37:54

Yeah.

Brad Bingham
00:37:54

Right. And so everything's not the same. They're not going to tell you it's the same. Right, right. They're just going to say, here's my quote. Right, Right.

And, and, and most of them don't have a 1% deductible option. And so when you don't have that.

Mike Mills
00:38:06

1%, did those just go away almost.

Brad Bingham
00:38:10

Then it's like, yeah. I mean, was it just because so.

Mike Mills
00:38:12

Few people wanted them simply because of the cost, or was it just like they just don't want to be responsible for all of it?

Brad Bingham
00:38:17

It's just, it's just the insurance company pushing off the wrist to the customer.

Mike Mills
00:38:21

Because that used to be pretty standard.

Brad Bingham
00:38:22

Right. Well, I mean, when I got on the business, it was 500 to a thousand.

Mike Mills
00:38:26

Right.

Brad Bingham
00:38:26

That was. Yes. $500,000 roof deductible.

Mike Mills
00:38:29

Right.

Brad Bingham
00:38:29

Then it went to 1%.

Mike Mills
00:38:30

Yeah.

Brad Bingham
00:38:31

And 1%'s pretty. Been pretty much been a standard for, I'd say, 20 years.

Mike Mills
00:38:34

Yeah. Yeah.

Brad Bingham
00:38:34

I mean, at least.

Mike Mills
00:38:35

And now it's just basically gone.

Brad Bingham
00:38:37

And now, I mean, we still have one. There's a few companies that still have a 1% deductible, but I will tell you, most carriers are at 2% on your roof.

You can still get 1% or a thousand on everything else, but for your roof, they want a 2% deductible. I mean, I've seen, I've seen carriers go to 3%.

Mike Mills
00:38:52

Yeah.

Brad Bingham
00:38:53

And it's just like we don't, we don't want to cover the roof and.

Mike Mills
00:38:56

Not even tell people, really. That's the part, that's the part that gets me, is. And I, again, I see this every day because, you know, we're always.

Look, in the world of mortgages, I'm trying to get your payment manageable so you can pay it. And I'm also trying to get you to qualify. And sometimes those insurance, you know, I try.

I've had to up my estimations on what I think insurance is over the years, and it still comes in and blows me away sometimes. And, you know, I'M like, I'm putting it at 300. They're like, well, this is a 400amonth. Like, geez, so.

Or they will come back and say, oh, I got this one for 175. And I'm like, whoa, what's going on there? Something's not right about that. Like, you need to. Sure. That's an insurance policy. Yeah.

Like you need to call somebody on this one.

This doesn't seem right, but it's, it's crazy to me because again, and that's why I asked you is like, people look at that bottom line number, they just look and see, here's how much I'm paying every year. I want the cheaper number very over the bigger one. But then they don't realize until the, until you get your roof replaced.

Which by the way, if you live in Texas, okay, your roof is going to be replaced at some point. What's, what's the average right now? Do you know? I don't know.

Brad Bingham
00:39:53

I'd say around here it's probably six, seven years.

Mike Mills
00:39:55

Six or seven years?

Brad Bingham
00:39:56

Yeah.

Mike Mills
00:39:56

So you're going to have a deductible on that roof. So if you don't know what your deductible is and that roofer shows up and gives you the bid, you're ready to go.

And you call your insurance company and they're like, yeah, you're going to pay 15 grand out of pocket on this. And you had no idea because you had a, you know, 3, 2 to 3 or 20,000. If you had a 3% deductible on something, I mean, that is a wake up call.

I mean, how many calls do you get from people that.

Have you ever get calls from people that left and then call you back and like, okay, like, oh, crap, Brad, I just got my roof claim and I didn't even realize. Okay, explain this all to me.

Brad Bingham
00:40:27

Yeah, yeah. So a couple of things about the coverage. A lot of people don't even realize what, you know, they cannot be comparing apples to apples.

But deductible is the same. Right, right. Because most companies in the old days, replacement cost was pretty much the standard. Right, right.

With the roof situation where it is, replacement cost is becoming, I would say, I'm not gonna say obsolete because it's definitely not obsolete, but you've got insurance companies that are, that are slipping in their policies, some type of a payment schedule, depreciation, whatever you want to call it, it's all depreciation. Right. So as your roof gets older, the, the value of your roof goes down, which it doesn't, it still costs the same to replace it.

But the, the amount of coverage that they're going to give you goes down. Right. And so some companies will start out at year one where they don't even do replacement costs.

There's some companies that at the 5th year, the 7th year, the 10th year, 15th year.

So not all policies are the same and the deductible may be the same, but if you take a depreciated value policy that the roof's 10 years old and they depreciate at 3% a year, they're going to cut 30% of your value of your roof off just because it's not replacement cost. Right. And so if you buy a non replacement cost policy, they can sell us a lot cheaper because that's where they're saving money on their roof claims.

Mike Mills
00:41:36

Right.

Brad Bingham
00:41:37

And so not only deductibles, but the coverage is the same or it may not be the same. Right.

But when, when, when you're shopping around and people just start stripping things out, they leave it up to you to lay it side by side and say, this is what I got and this is what I'm getting. They're not going to tell you anymore, right? This, this, this is where we're better. This is, this, I just got a cheaper price. Right, right.

And right now people just want cheaper.

Mike Mills
00:42:00

Because it's stupid, because everything's expensive.

Brad Bingham
00:42:02

It's so stupid.

Mike Mills
00:42:03

Yeah. Because I see memes all over the Internet about how being rich means having a dozen eggs in your house.

I mean, it's, and, and inflation, oh, by the way, is creeping back up again. I'm telling you, it's getting more and more expensive.

I, and, and look, I, look, I will never hate on anybody from, for wanting, you know, to just saying, hey, look, if something happens, it happens and I'll figure it out when it does. But I just got to keep things cheap as long as I can, as much as I can. I get it, I get it. I absolutely do.

Take, take the 5% deductible or take, you know, the less cost it. I'm not going to hate on anybody for, for needing to do that for themselves. The key is though, is just know what you're doing.

Brad Bingham
00:42:38

Absolutely.

Mike Mills
00:42:38

Like just know. Yeah, if you're making that decision, that's fine, make that decision. But know why you're making that decision.

Not just because you thought that God smiled upon you and gave you cheap insurance. And I was like, no, no, you're, you're, Nothing is free, right? You pay for everything one way or another.

You know, there if it's, you know, it's the old say it all the time. In my business, if it sounds too good to be true, it usually is. So you need to be conscious of that.

If something surprises you to the positive, as cynical as this sounds, it's probably not reality, and you need to dig a little deeper.

Brad Bingham
00:43:09

It's like in your business, Mike, when, you know, I'm doing a quote for somebody and they're. They're shopping their. Their mortgage, right? And like, oh, this guy's telling me my payment's going to be this. And this guy's telling me I'm.

Well, I was like, what is he telling you? Your insurance is. Yeah, because if he can get it for 50 bucks a month, like he's telling you, you know. Yeah, you probably can't.

Mike Mills
00:43:25

Yeah, well, and that's true. And that's what, you know, unfortunately, the.

That's always been a nemesis of ours over the years with like the Zillows of the world and, and not them directly, but the way they build out their payment quotes. Because when someone goes and sees a house online, estimates, yeah, it'll give them an estimate of their payment.

You know, the zestimates like the value of the house, but it'll give the estimate of the payment, and it's always low. And they may have the taxes, but the problem with the taxes is, is the taxes that they're pulling are usually input by the agent.

And if the agent's not paying attention to if it's got an over 65 exemption, which for whatever reason they never do, or, or anything else that would artificially bring that payment down, or the fact that the person's lived there for 15 years and their, their taxable value on that $400,000 house is only 200 because they've been capped. And as soon as you buy that sucker, your taxes are doubled up. Yeah. So. And then they do the same thing on the insurance.

They put a $50 policy in there or something stupid, cheap, 125 bucks.

And so I'll go through this whole exercise with somebody about their payment, explaining all the things they can impact and the things that they can't. And then I'm like, okay, so all these things being equal, this is what your payment would be on a house about this price.

And they're like, oh, that's not what Zillow said. Zillow said it's. Why are you so far off? Zillow is lying to you.

Brad Bingham
00:44:39

They sell 1% interest rates.

Mike Mills
00:44:41

Yeah, that too. Yeah. But I mean, it happens in all in the entire thing. And it always comes down to, unfortunately, people just not knowing.

And, and it's not their fault. Like I said, insurance bores the hell out of me. The only reason I know anything about it is because I know you and because I do mortgages.

But if you want to talk about, like, what could be going wrong in my truck, in the engine, I got no clue, man. I'm purely relying on what somebody else is telling me and if I trust them and what they're saying.

And so I don't, I don't, you know, I don't have a negative thought on someone who doesn't understand this stuff, but when you're in the situation and you're going through it, that's the time that you need to at least learn it at that time, because otherwise you're going to make decisions from an uninformed position. You're going to buy again and obviously get taken advantage of.

Brad Bingham
00:45:25

Yeah.

Mike Mills
00:45:26

So it's, it's, it's unfortunate, but, but that's just, you know, what it is.

So what, everywhere, Mike, what, if anything, you know, and I know there's limits on things, but what, what, if anything, can people do to try to keep their premiums as low? Is there certain, you know, things that they can do as far as the way they drive or keeping the log on?

I mean, you know, I know they have all these little bells and whistles these days that, that you can do, but, you know, obviously the, the normal don't. Fewer claims you make, you're going to save money. The fewer accidents you get into, you're going to save money. But you know what, what else?

Other than taking those big deductibles, what else?

Brad Bingham
00:45:59

First thing is just reach out to your agent. Right. And, and if you have a 1% or I have people that still have 500 deductibles. Right. You can't pry, you can't pride away from them.

Mike Mills
00:46:08

Right.

Brad Bingham
00:46:08

They, they know the value of a deductible and they'll pay for it.

Mike Mills
00:46:11

Yeah.

Brad Bingham
00:46:12

But just, you know, just realize when you do go shopping, if you're at a 1% deductible and you're getting a 2%, it's different.

Mike Mills
00:46:19

Yeah.

Brad Bingham
00:46:19

Call your agent, get a quote. At 2%, it may be cheaper for you to stay where you're at and just modify your policy. Right, right.

But everybody always calls and says, I don't want to change anything. I just want you to make it cheaper.

Mike Mills
00:46:31

Yeah.

Brad Bingham
00:46:31

And I'm like, well, so, so do I.

Mike Mills
00:46:34

Me too. I would love to.

Brad Bingham
00:46:36

And unfortunately right now there's not a whole lot on the, on the homeowner side of anything you can do. Right. Other than shopping. Because there are some companies right now that are just not competitive. And you don't know that. Right.

I mean, but I mean when your price goes from 4,000, 9,000, you're, there's your red flag should go off. Yeah, right? Yeah. I literally had one of the day that was paying 62 and her renewal was $15,000. Right. We rewrote her for 62.

She, she changed her deductible a little bit. But I mean you just have to be a smart consumer. You can't just sit there and take it. Right. So pick up the phone, deal with somebody that you trust.

Right. And that you feel like they're doing you. Right. And on the auto side, yeah, I mean everybody could be a better driver. Right.

But the problem is, is with the roads we drive on around here, I mean you got construction everywhere and you got road debris everywhere. And I mean the claims are, they're stupid once again. Used to, I call, you know, people call me and say, hey, I, this is what happened.

What should I do?

Mike Mills
00:47:35

Right?

Brad Bingham
00:47:35

And used to, I could say, okay, go to this shop and you know, they'll do this and it's less than, than filing it for a claim and you'll, you'll come out better over a three year period. Right. It's hard to do that now these days.

Mike Mills
00:47:45

Yeah.

Brad Bingham
00:47:45

I mean a small little claim is a 3, 3, $500 claim now. I mean I used to, I used to be able to get claims that were less than $1,000 that people could fix stuff for.

Mike Mills
00:47:53

Right.

Brad Bingham
00:47:53

Can't do it anymore for that. It just with labor and everything, the cost for parts, it's just, it's just very difficult. So always be a better driver.

Most of the companies have the trackers now where they, they want to track your driving and if you'll let them track your driving. I don't want anybody tracking my driving.

Mike Mills
00:48:12

Could work against you too though. Yeah, yeah. Yeah. Be careful. Yeah. You better be a damn good driver.

Brad Bingham
00:48:16

That's right.

Mike Mills
00:48:17

Yeah.

Well, having the, the we I had when we bought our Tesla, there's insurance that comes with it or not comes with it, but you have option to buy and of course it knows everything that you're doing, doing all the time. And I read all about it and it will like in the car, it'll like yell at basically Yell at you.

If you're not changing lanes the right way, you better slow down. It's like, you know, it's like having my wife in the car with me all the time, you know? Yeah, no, no, she doesn't watch this.

But, but it's constantly barking at you for your driving.

If you're like, when I pull into my driveway, like when I'm coming through my driveway because I have a car parked and you know, like, I pull in quickly, quickly. And I pull in and like every time it's like, oh, there's a car, like, slow down.

And so like, I noticed when I first got the Tesla insurance, it was cheaper. And then it kept going up and up and up and up and it was like, you look at your driver rating. I'm like, why is it rating me such a terrible driver?

Well, it's because it reads everything that I'm doing all the time. So I was like, all right, well, I'm getting rid of that.

Brad Bingham
00:49:13

Like what you may think is safe, they may not think it's safe.

Mike Mills
00:49:16

Correct. Yes.

Brad Bingham
00:49:17

So, yeah, it's. So those, those trackers are becoming the way of insurance. Right, right. It's, it's telematics is everything.

Mike Mills
00:49:24

You may not be able to get away from it at some point. Huh.

Brad Bingham
00:49:27

You know, I've got an older truck, I don't really ever plan on getting it because it doesn't have all the telematics in it.

Mike Mills
00:49:31

Well, I'm just saying in order to even have coverage, the insurance companies might be like, we're not going to give you coverage unless they'll be able to underwrite.

Brad Bingham
00:49:38

But I will tell you on the front end, it you opting in is a 10 difference.

Mike Mills
00:49:43

Yeah.

Brad Bingham
00:49:44

So just on your auto industry.

Mike Mills
00:49:45

Oh, just right off the top, stop.

Brad Bingham
00:49:46

Opting in is 10 cheaper.

Mike Mills
00:49:48

Wow.

Brad Bingham
00:49:48

Right now they're going to rate you based on your driving. Right, right. The old way it was discounts. Right now it is actually performance based.

Mike Mills
00:49:56

Right.

Brad Bingham
00:49:56

So if you're real time data, it's, well, not real time, it's every six months. But, well, but I mean, tracking the data's life.

Mike Mills
00:50:03

Yeah, yeah, yeah.

Brad Bingham
00:50:04

So as, as they're tracking your driving habits, they're creating a rate for you individually. And that's, that's really what, what most people don't realize is in the old days, everybody was a 1A driver or a 1B driver.

And the polls were so big of people. Right. Now all they're really trying to do is, is individualize your premium to you. Right.

So if you're less risky driver, then they think you should pay less risky premiums. Right. Than if you're a more risky driver.

And so really, all the telematics and all the dissecting insurance policy to a premium is really just try to individualize that policy premium.

Mike Mills
00:50:41

Right.

Brad Bingham
00:50:42

Which some people like and some people don't. Yeah. Right. And. And so miles driven a year is a big deal now where it used to be, either to and from work. Right.

Well, they don't even ask you to and from work anymore. They just want to know how many miles a year you drive. Right. They can figure out if you drive to and from work or your girlfriends or what.

What you're doing.

Mike Mills
00:50:57

Right.

Brad Bingham
00:50:57

They. They can figure all that out. But that, you know, the rating factors have changed over the years from what it used to be.

And it's funny that it took Covid for the insurance companies to realize miles driven was a big deal. Yeah, Right. Because during COVID nobody.

Mike Mills
00:51:09

Nobody had an accident because nobody went anywhere. Right, right. Right.

Brad Bingham
00:51:12

So the miles driven went.

Mike Mills
00:51:14

Yeah.

Brad Bingham
00:51:14

And the claims went. They're like, wait a minute. People don't drive. You don't have claims. And so they went into miles driven. A big rating factor.

Mike Mills
00:51:21

Yeah. Yeah, that makes sense. So it's amazing it took them that long to figure that out.

Brad Bingham
00:51:24

Funny that. A pandemic. It's a pandemic for an underwriter to figure that out. Right.

Mike Mills
00:51:28

That's crazy. I got another hot tip for you if you want to keep your insurance down. Don't have teenagers, that is, don't have kids, period. Yes, yes.

That will save you so much money. I have a. I mean, Brad knows this because he went. He's doing my insurance for this. But I have two kids.

I have a daughter who's 17, and I have a son who's 15 who's soon to be driving. Soon Brad as well. Kids are the same age. And when I got our insurance change premium update from adding my daughter to it last year without Katie.

Yeah. I just about fell out of my chair because, I mean, it was almost double what I was paying before.

And girls, from what I understand, are cheaper to insure than boys. Not really. Okay. All right. Thank goodness. All right, so that's.

Brad Bingham
00:52:13

That's one of those old 1A 1B kind of deals.

Mike Mills
00:52:15

All right, all right, Good, good, good. At least they're classifying.

Brad Bingham
00:52:18

Girls have cell phones, too.

Mike Mills
00:52:19

Yeah, it's a good point. Yes. Well, yeah, the girl that plowed into my. My mailbox out front, she was. She was looking at her cell Phone.

And your story earlier about your friend who is looking at the daughter looking at her cell phone. So, so yeah, that's a, that's a hot tip if you want to keep your insurance premiums down. Don't have teenagers because they don't have cell phones.

Yes. And yeah, don't let them drive with their cell phone.

Brad Bingham
00:52:39

Tell me how that works.

Mike Mills
00:52:39

That's got to be a thing. That is so such a impactful piece for not just kids, but adults, too.

Like, I, I drive down the road every single day, obviously, and I see people, I watch people in front of me and they're, they're moving a little bit. And used to, you'd be like, man, that person needs a drunk. Know, had a few drinks, but now it's 2:00 in the afternoon.

Now they could have had a few drinks, but 99% of the time when I pass by them pissed off because I'm, I drive a spaceship when I go by them, I'm looking at them, they're just staring at their phone and, and they're not even. Look, I'm not going to say that I don't do it because I do. I don't do it as much, but I do it. But at least I like, I keep my phone kind of down here.

So I'm like, not necessarily looking. They don't know that I'm like, people.

Brad Bingham
00:53:20

Don'T see you doing.

Mike Mills
00:53:20

Yeah, but these people, like got it on their steering wheel and they're just staring at, like it's a screen in front of them. And I'm just like, oh, my God. And I just watched them for the past 10 miles, you know, barely weave in and out between different lanes. It's real.

It's unbelievable.

Brad Bingham
00:53:33

So the attorneys, when the attorney gets involved, the two things they look at is, you know, alcohol.

Mike Mills
00:53:38

Yeah.

Brad Bingham
00:53:38

One cell phone, too. And I mean, they go back and look at your records. Were you texting? Were you, what were you doing at the time of the accident? They can pinpoint it.

And so driving, driving, driving distracted with a cell phone is, is almost as bad as driving under the influence.

Mike Mills
00:53:55

I think it's worse.

Brad Bingham
00:53:56

Well, there's no, there's no penalty to it legally.

Mike Mills
00:53:58

Yeah.

Brad Bingham
00:53:59

Right. But as far as the amount of claims that it causes.

Mike Mills
00:54:02

Yeah.

Brad Bingham
00:54:02

The damage it causes, the life lost from it. Yeah, it's, it's, it's, it's legit.

Mike Mills
00:54:07

Yeah. Because people don't think, I mean, they, everybody knows these days that drinking is bad. Drinking and driving is bad. We all know this.

There's still plenty of people do it, but we all know it's bad.

But people just, I think they know looking at their cell phone is bad, but they just don't see it that way because, like, oh, I'm just gonna check for two seconds, or someone just texted me or whatever the case may be. And, you know, I wish there was a device, you know, where you could turn it off. Yeah, you could.

Like, once you, once my child gets into the car, their cell phone is.

Brad Bingham
00:54:30

Basically an insurance app. Would do that. Right. I'm gonna track your, I'm gonna track your driving. But you're not gonna use this phone while I'm, while I'm on here.

Mike Mills
00:54:38

Yes. Yeah, you can't. I mean, you can use your, your nav.

Brad Bingham
00:54:41

Yeah.

Mike Mills
00:54:41

And maybe like your music. Right. And then other than that, nothing else is working.

Brad Bingham
00:54:46

But that's not violation of your privacy.

Mike Mills
00:54:48

M. Yes, I know, I know.

And, and there is a, it's a delicate line or whatever, but it's still, I think that would save, I mean, I, I could just only imagine the increase in premiums that have occurred just from the cell phone usage. I, I, I would bet you it makes up 10%.

Brad Bingham
00:55:02

Oh, more than that, I bet.

Mike Mills
00:55:03

Yeah. Being nice, you know, that just, if you don't want your insurance premiums high, stay off your damn phone.

But, you know, nobody, nobody wants to do that. Before we go, we got about five minutes here. Let's talk a little politics.

So, you know, the, the big red machine is, is in there wrecking stuff with his, with his good buddy from South Africa slinging the hammer. Yeah. And everybody's pissed, which, you know, I, I, you know me, I, first time around, Trump was there. I did not vote for Trump.

I don't particularly like him as a human being, but sitting there watching, you know, four years of what just occurred with the president, who basically wasn't there and has such, you know, there's been plenty of stories since that have basically proven that. And then Trump deciding he's going to bring in RFK and Tulsi Gabbard, who both got confirmed, which ouye. And then along with Elon, too.

Look, say what you want about Elon, he went into X or Twitter and bought that company. He overpaid for it. He cut 80% of the staff.

He lost a billion dollars the first year of owning that company, and since then has turned it into the most profitable with the least amount of people employed, you know, social media site. And oh, by the way, some of.

Brad Bingham
00:56:16

Our insurance companies need to do the Same thing.

Mike Mills
00:56:17

Traffic. Traffic on his site is. Is competing with Google now or compete, excuse me, competing with YouTube. So. So there's a lot of positive things.

There's some negative stuff.

Brad Bingham
00:56:27

Excitement.

Mike Mills
00:56:28

Yes. On his excite. So you know, I think, say what.

Brad Bingham
00:56:31

You want, the man's smart.

Mike Mills
00:56:32

Yes. Well, when we're looking at, you know, we've talked today all about cost and inflation, everything else.

And that was what people voted on this year, at least in my opinion, was that they voted on the fact that everything is incredibly expensive and nobody seemed to care about it or at least gave it a lot of lip service. And at minimum. Look, do I think it's more like.

Brad Bingham
00:56:49

What are you going to do right now?

Mike Mills
00:56:51

Do I think that, you know, because you can pick out things when you go through the USAID piece, you know where maybe they cut some funding to a company that was doing cancer research. Okay, do we want that? No, but there's a thing called zero based budgeting. Do.

Have you ever heard of this before where you go into, and this is all done in all most Silicon Valley companies where they basically go in and they cut their cost to almost zero and say, okay, now we're going to build back from there what we can put in because we got to get rid of all the waste in order to understand what it really takes to operate. And there's always pains with that, a lot of growing pains.

But the idea at least being put forth right now is that if they can reduce government spending down dramatically, which they claim that they can, then that will cause inflation to start to fall simply because just interest rates alone, if you, if you reduce government debt, if you cut down government debt or government spending dramatically, that causes government bonds and 10 year treasuries to fall because the, you have less being issued so there's less supply in the market. And if that happens, then the yields come down.

Well, if treasury yields come down, then mortgage bonds become more attractive in that market and so interest rates for mortgages will come down.

So if we're talking about the expense for housing, when you look at insurance, which you really can't control right now, taxes on your property taxes, they're trying to do some stuff in Texas, but they just passed the big thing about the $100,000 home exemption, which is great, but, but that's, you know, there's only so much you can do there because your value is going to keep going up. And then, you know, I don't see the price of homes crashing anytime soon.

They might slow down their ascent, which they have inventory is building, so that's a good thing. Helping with the price of homes, but they're not going to crash 30% anytime in the next five years.

So the only other thing that you can really impact to help with housing is interest rates and if you can reduce government spending and reduce the 10 year yields, that will help reduce mortgage rates and bring stuff down. So do I like every single thing that they're doing. Do I like the idea that they want to make a luxury hotel in the Gaza Street?

This, this completely war torn, you know.

Brad Bingham
00:58:50

Hey, maybe it works.

Mike Mills
00:58:51

I don't know. I don't know. I don't know. I don't, I don't know how he went.

Brad Bingham
00:58:54

He's trying to create us a solution.

Mike Mills
00:58:57

Yeah, yeah. I don't know how we went from America first to like, let's go own Gaza. But whatever, that's, that's nothing.

I'm never going to agree with everything that happens there.

But I do like the way that things are headed and I do think that, you know, in the long term or at least over the next couple of years, I think we will see an impact on, on what we do economically. But I mean, do you see that's everybody's life.

Brad Bingham
00:59:18

I'm an insurance pro for Dave Ramsey.

Mike Mills
00:59:19

Yeah.

Brad Bingham
00:59:20

And so when you, when you're an insurance pro, you have to go through this program and it's very time consuming. So. But the very first thing they teach you is a budget.

Mike Mills
00:59:29

Yeah.

Brad Bingham
00:59:29

Right. And it's a zero based budget.

Mike Mills
00:59:31

Yeah.

Brad Bingham
00:59:31

And it's, you can't spend more than what you got coming in.

Mike Mills
00:59:34

Yeah.

Brad Bingham
00:59:35

And when you do, you go into debt.

Mike Mills
00:59:37

Yeah.

Brad Bingham
00:59:37

And when you're in debt, you're controlled.

Mike Mills
00:59:39

Yeah.

Brad Bingham
00:59:39

Right. When you're free of debt, you're free.

Mike Mills
00:59:43

Yes.

Brad Bingham
00:59:43

Nobody controls your spending. Nobody controls. And so what most people don't realize is how being debt free can be freeing. Yeah, right. Yeah.

And so it goes back to what you're talking about, to our whole country. Right. But on just, just a micromanage, this individual person, if we all live within our means, can you imagine what a different place this would be?

Mike Mills
01:00:05

Oh yeah, absolutely.

Brad Bingham
01:00:06

I mean you look at people's stuff all the time.

Mike Mills
01:00:08

Oh yeah.

No, it's, it's, you know, and it gets progressively worse too, because over the last couple of years the money was flowing so well for every industry on the planet. Just about that people expected was cheap. Yeah. Debt was cheap. People kind of expected their life to remain that way and continue that way.

And that's just not the reality of the situation. A lot of people didn't save up very much money. And so then there became this phase where they went through.

Of, okay, no, things aren't going as well as they were, but something's going to happen and we're going to get back to that. So I'll just take on a little bit of debt just to get me through the meantime so I don't have to change my lifestyle. And.

And now we're two years later. And look, trust me, if.

If Realtors and mortgage professionals and anybody in the housing industry is listening to this, they know exactly what I'm talking about. Because this is the vast majority. We. We are the, what I call the canary in the coal mine as far as the economy is concerned, because we have.

We've been suffering for. For two years. And there's some people that have great years. And it drives me nuts all the time, too, is I say, like, oh, it's the inter.

Like, oh, I had the best year of my life. Okay, fine, all right, you're the. You're the outlier. Good. But most people are not. And, and the way that I always.

Brad Bingham
01:01:12

Know that I probably work 90 hours a week that. That year.

Mike Mills
01:01:14

Yes. And I saw.

I'm seeing this more and more these days, and I'm right there with everybody else is I know the real estate's not going well because when I go on social media, everybody's on social media now. Everybody's got their commercial, everybody's got their video. Everybody's got, you know, that's still doing it.

Now, obviously, that's a channel to reach people, but at the same time, there were plenty of people that weren't doing that stuff before. And now when businesses slow down, you got to start doing it.

So I know that people are out there, you know, struggling and suffering with it and, and having a hard time.

And, you know, just to wrap it back to where we started with this or in the middle of what we were talking about is you have to make sure that you know every aspect of what you're doing in your career. So you have to help people all the way through. Because if you want to get repeat business like you do, um, you have to help them as a.

If you're on mortgages or in real estate value, you got to bring them value, you got to show them every step of the way where they can save money, where they can't explain to them why, if, look, if there's nothing you can do about this, there's nothing you can do about it. But you need to understand why and then just walk them through that entire process.

So that way when they come out the other side, even if they don't decide to buy right now, or maybe they do decide to buy, but they go with someone else and they go through an experience that wasn't going to be with you, I know that you resonate because I know you resonate with clients because when you are one of the few in the industry and your insurance side of things that really walks and explains things to people, well, even if they don't use you, they will always refer back. And I know that because I've sent people to you like, well, I decided not to use Brad and they went with somebody else.

And then I'll do another loan from her again, like, oh, give me that guy's number again. Because the other people that I went with were terrible. And, you know, I don't want to go through that again.

Brad Bingham
01:02:47

Well, that's. That's what I try to do for my referral partners is, is I'm not going to give you nothing.

Mike Mills
01:02:52

Yeah.

Brad Bingham
01:02:53

I'm not gonna buy you nothing. I'm gonna give your customer a great experience.

Mike Mills
01:02:56

Yes.

Brad Bingham
01:02:56

Right. And. And when I do, they're gonna remember next time they buy the house. Hey, Mike referred me to Brad.

Mike Mills
01:03:01

Yep.

Brad Bingham
01:03:02

Right. And I'm gonna call Mike, Brad back because he gave me good referrals.

Mike Mills
01:03:05

Yeah.

Brad Bingham
01:03:05

Right. And he took good care of me. And so that's. That's really what it's all about.

Mike Mills
01:03:09

Yep. If you take away nothing from this, just take away the fact if you're in real estate of any kind, get good referral partners.

Just find people that you can tend to. Not because they give you money money, not because they give you perks, but because they take really good care of your customers.

And if you want to have a sustained career and continue to do things even when times are slow, they're always going to go back to the people that they trust and that they. They know we're going to treat them.

Brad Bingham
01:03:30

Right just about say the same thing. And those people will be around for your career.

Mike Mills
01:03:34

That's right. They'll be around for a long time, and you won't have to find a new person every week. So. All right. Well, thank you, Brad. Appreciate you, as always.

You know, insurance is certainly a topic. Topic that is not fascinating to me, but is incredibly important.

I just, you know, like everybody else, when you start talking about deductibles and coverages and all this kind of stuff, my eyes glaze over. But it's incredibly important, and you don't need to know it all the time.

But when the time comes, and you do need to have it, and you need to have a Brad. So if you know anything, walk away from anything from this. It's just make sure you have a Brad. Maybe it's not Brad, but a Brad of some kind.

You need one. All right, brother. Thank you very much, everybody. Have a great weekend, and we will see you next time.