These days, nothing is more important than protecting your assets.
Recently, REALTOR® Nick FitzGibbon sat down with Commercial Account Executives Michael Durigon and Mathew Nelson of BrokerLink in Guelph. They talked about how they got their start in the insurance field (and what they most love about it), potential pitfalls investment property owners should be on the lookout for and how catastrophic events affect insurance coverage.
NF: What drew the two of you to the insurance industry and how long have you been working as brokers?
Michael Durigon: We have been working as insurance brokers for close to 15 years each. My father worked in the insurance industry my entire life and when a position opened at HJM Insurance and Financial Services, I was offered a role servicing home and auto insurance. It wasn’t long before I realized that I was ready to make insurance a career.
I always loved sales and working with people. I love being an insurance broker because you get to build relationships with your clients, as well as the underwriters and staff at the insurance companies.
Mathew Nelson: As a close friend of the family, I was given the opportunity to start my career at HJM Insurance and Financial Services, which was owned by Michael’s father, Ivan Durigon. The sales aspect and working with clients directly was definitely the main driver for me. I really enjoy working with business owners and real estate investors to find solutions and ensure their assets are protected.
NF: What would you say is your specialty when it comes to insurance?
Michael & Mathew: We work closely together and specialize in the construction and real estate space. Residential and commercial builders, land developers, property managers and real estate investors are just some of the areas in which we specialize.
NF: Are there any pitfalls owners should be on the lookout for when arranging insurance for their investment properties?
Michael & Mathew: Leaving insurance to the end is a huge mistake. The earlier you get us involved in the process, the better your pricing and coverage will be. Also, know what you’re buying and have a plan. Insurance companies are extremely detail-oriented and ask a ton of questions about the physical characteristics of the property, so it is a good idea to be prepared.
If the house is older and renos are part of the plan, then that is perfect, we have solutions for that. If the property is going to be rented to students or used as a short-term rental (i.e., Airbnb), we have solutions for that as well. Most importantly, review your coverage. Too often investors are focused on the premium and not the coverages and exclusions.
NF: Have there been any recent changes in home insurance coverage or policies (in general) that landlords should be aware of?
Michael & Mathew: The property insurance sector is one of the toughest to insure. Forest fires, floods, windstorms and catastrophic claims in general are more frequent and more severe than ever before. Forest fire season has already started in Alberta, right on the heels of flood season.
Insurance companies are forced to insert special limits of insurance, higher deductibles, stricter wordings and exclusions, so it’s very important you have a broker that understands the real estate sector and can help guide you through the process of buying property insurance for your investment properties. An increase in catastrophic events, including weather-related events across the globe, affects insurance coverage locally here in Ontario.
NF: What are some of the main factors that contribute to the cost of rental property insurance?
Michael & Mathew: The majority of the rental property insurance premium is based off the replacement costs of the dwelling. Therefore, as construction costs and labour increase, so do insurance premiums. The age of the building, geographical location and type of occupancy are three of the largest contributors to the cost of insurance properties.
That said, we typically have good solutions for whatever your investment strategy is so it’s important that you look for opportunities that make sense financially and then work with us to ensure it’s protected. Anyone with an investment property will also need to have landlord insurance.
NF: What advice do you typically give these investors?
Michael & Mathew: Insurance for investment properties is much different than typical personal home insurance. Landlords should look at their investment property portfolio as a business and as such, they should have an insurance policy that protects that business. There are certain coverages that must be in place to ensure your business is protected for both property and liability claims.
It is best practice and risk management to recommend that your residential tenants have a Tenants Insurance Policy to insure their own personal contents and personal liability exposure. A landlord’s policy will not cover this for the tenant.
NF: A big part of the work you focus on is multi-residential insurance. What kinds of businesses or landlords have you helped arrange this for and have there been any stories that stood out to you?
Michael & Mathew: As your investment portfolio grows or you become a more sophisticated investor, you may look towards larger apartment buildings, retail buildings, commercial buildings, etc. It’s imperative that you work with a broker who understands this space and speaks the same language. Larger purchases may mean joint ventures, incorporating and different strategies that will help you scale.
This is where a knowledgeable broker becomes an important part of your team. As an investor, you need to focus on growing your business and as your broker, our job is to ensure that business continues to be protected.
NF: Thank you both so much for your time and insights.
Connect with Michael and Mathew online here.
Reach out to REALTOR® Nick FitzGibbon for help finding your next home.