Volition Meetup - Insurance for Investors

@volitionproperties
www.volitionprop.com
Volition Investment Mastermind:
Insurance for Investors – “Insuring”
you avoid coverage pitfalls!
March 2021

@volitionproperties
Who is Volition?

@volitionproperties
Who is Volition?
● Mission Statement: To help people navigate the complex world of real
estate and to be the team who has your back.
● Complete Solution Provider: Everything you need to be successful.
● We Figure It Out For You: Cutting-edge research, analysis, and (more
importantly) synthesis in putting together solutions for the competitive
Toronto market.

@volitionproperties
Who is Volition?
● Credentials:
○ $30M+ personal holdings in Toronto Real Estate (over 50+ doors)
○ Certiﬁed Real Estate Investment Advisors
○ Michael Millenear Real Estate Investing Leadership Award nomination
○ Investor Realtor Awards: Chairman Award, President Award, Top Producer Award
○ Featured in Real Estate Investment Magazines
○ Expert Speakers on national stages & podcasts
○ ...and more.

@volitionproperties
Mentorship,
Education &
Consultation
Leasing &
Property
Management
Toronto’s Leading Real Estate Investment Advisory & Realty Firm
Volition Services
Realty Management
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Properties
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Renovations

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Toronto’s Leading Real Estate Investment Advisory & Realty Firm
The Volition Team
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Founder & Partner
Ming Lim
Advisory & Realty
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Design
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Founder & Partner
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Advisory & Realty
Janny Fu
Leasing Services
Shelby Hagymasy
Operations Coordinator
Brian Li
Construction PM

@volitionproperties
The Investing Maze
The Volition Team!

@volitionproperties
Private Volition Mastermind Chat Group
● Exclusive to Investor clients & Advisory
clients ONLY.
● Talk about news, tenant issues, share
contacts, basically help navigate the difﬁculty
of this investor world!
Let us know if we missed you!!

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Ming’s Market Minute

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Average Resale Home Price

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New Listings

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Volition Metrics - Downtown SF Detached

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Article Spotlight

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Volition Metrics - Downtown Condos

@volitionproperties
Volition Metrics - Toronto - Everywhere else

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Volition Metrics - Uptown SF Detached

@volitionproperties
Case Study:
CityPlace Condo

@volitionproperties
Should you prune your portfolio?
● What are your goals?
● Does this property map to your goals?
● If you reﬁ at 80% LTV will it still cashﬂow?
● Do you want to take your investing to the next level (ie.
from condo to multifamily)?

@volitionproperties
Case Study: CityPlace Condo
● Purchase price: $305,800
● 2007 pre-construction, registered in 2010
● First rented for $1,850 including parking + locker
● Cashﬂow positive the entire time
● Only 2-3 weeks of vacancy when the owner
did cosmetic renos
● 823 sqft 2 bed + den, 2 bath, 2 balconies
● Parking and locker

@volitionproperties
Case Study: CityPlace Condo
● The unit has run its course
● The owner had already pulled equity to buy another
property a few years ago
● Is now looking to re-allocate equity to real estate that
provides more opportunity to create value (major
reno or development), which is difﬁcult to do with a
condo

@volitionproperties
The Main Event!
Insurance for Investors – “Insuring” you
avoid coverage pitfalls!

@volitionproperties
Dan Tetzlaﬀ – Insurance Expert
Dan oversees the HUB Ontario regional real estate practice,
manages $5,000,000 in insurance real estate premiums and
has 10+ years of experience.
He specializes in rental properties, rent-to-own, student
housing, construction, surety, and large complex real estate
schedules.
Dan has partnered with some of the most prominent real
estate groups in Canada including the Canada Landlord
Association, REIN, OREIO, REITR club, and more.

© 2017 HUB International Limited.
27 © 2017 HUB International Limited.
27
Advocacy. Tailored Insurance Solutions. Peace of Mind
Volition
Properties
Coverage pitfalls to look out
for in your investment
property insurance policy

28
Most Common Pitfalls
• Named Perils/Fire & Extended Coverage vs. Broad Form Coverage
• Actual Cash Value vs. Replacement Cost
• Permission for vacancy period
• Limited Coverage during vacancy
• Vandalism caused by tenants
• Rental Income Insurance
• Sewer Back-up, Flood & Earthquake, and failure of sump pump coverage.

29
Named Perils/Fire & Extended Coverage vs. Broad Form
There are two forms that your investment property may be currently insured
under:
• Named Perils Coverage This form is limited to the causes of loss that are
named on the policy. Named Perils form is a more “restrictive” coverage
form. You do not get as much coverage as you would get on a Broad form.
OR
• Broad Form Coverage This form is highly recommended as it covers “all
causes of loss” unless excluded.

30
Actual Cash Value vs. Replacement Cost
Methods by which your insurance company may calculate the settlement
amount are as follows;
• Replacement Cost is the cost to replace the property with new materials of
like kind and quality, without depreciation. This is the most favorable.
• Actual Cash Value is the cost to replace the property minus deduction for
depreciation. Also known as market value. It represents the dollar amount
you could expect to receive for the item if you sold it in the marketplace
excluding the land value.

31
Vacancy Allowance Period
Most policies have an exclusion on the policy that indicates that if the home was vacant for
more than 30 consecutive days, a loss would not be covered. You must notify your insurance
broker if your property is vacant for more than 30 days. They will have to add a vacancy
permit to your policy. There is typically a charge for this. However, some insurance packages
designed speciﬁcally for investment properties may have a longer vacancy period allowance.
This is certainly helpful considering a rental property may be vacant until tenants are found.
• Conditions to keep in mind relating to this permission:
• All doors and windows be securely closed and locked.
• All rubbish be removed from within the described buildings and premises.
• Buildings must be checked a minimum of once a week or more depending.
• You have shut oﬀ the water supply and drained the system and appliance of water, or you
have maintained heat in the building and have made arrangements to assure heat is
continued.

32
Damage/Vandalism Caused by Tenants
• This is a common exclusion on most rental property policies. You retain the
loss if your tenants damage or vandalize the building. It is recommended that
you double check with your insurance carrier to ensure that this is included.
• Damages can be signiﬁcant. From our experience we notice this is most
common during an eviction process.

33
Rental Income Insurance
• After an insured loss and during the period of restoration, rental income insurance
will reimburse you for the rental income that you were getting prior to the loss.
Check with your insurance broker or agent to be certain that you have this
coverage.
• Is the Rental Income Insurance on an Actual Loss Sustained basis? Actual Loss
Sustained basis means that there is no limit on the rental income. However, this
does not mean an unlimited source of payment for your loss. The loss must still
be proven and the proof is the amount that will be paid.
• There is also a limit as to when the rental income coverage is paid out. For
example,12- 24 months. It varies between policies.

34
Sewer Back-Up, Flood & Earthquake
Always ensure you have these as part of your insurance package.
• Sewer back up – Loss or damage caused directly by the backing up of
sewers, sumps or drains.
• Flood – waves, tides, tidal waves, and the rising of, the breaking out or the
overﬂow of any body of water, whether natural or man made.
• Earthquake – snowslide, landslide, or other earth movements occuring
concurrently with and directly resulting from an earthquake shock.

35
Tenants Insurance Recommendation
• Always recommend that your tenants have tenants insurance. It is not
uncommon to ask for a copy of their policy for your own peace of mind.
• If there is a loss and the tenants are negligent, your insurance company can
recover the loss from their insurance company if they are insured. This
avoids the payout from showing on your record.
• If there is a slip and fall incident and your tenant was negligent, it will likely
be your policy that responds if your tenant does not carry insurance. Even if
there is no payout, there is still defence costs that are involved in lawsuits.
This means that the claim will be shown on your loss history report, hence
could result in higher insurance premiums on renewal.

36
How much should you insure your building for?
• You should insure your building for the amount of money it would cost to
re-build the structure. The cost of land or the market value of the property
does not have any bearing on the cost to rebuild.
• Don’t forget to take into consideration Detached Structures – Coverage for
sheds, detached garages and other structures not connected to the main
dwelling itself.

37
Contents Insurance Limit
• You should insure your contents for the ﬁgure it would cost to replace them.
Being a “landlord”, there may be some items such as appliances and
furniture that you own and would want to replace following an insured loss.
• The tenant should be insuring their own contents. Your policy does not cover
their contents.

38
38 Advocacy. Tailored Insurance Solutions. Peace of Mind
Introducing Investment
Property Asset Protection
Program for Investors:

39
What type of properties are eligible?
1. Single Family Homes
2. Duplexes/Triplexes/ Etc.
3. Apartment Buildings
4. Commercial Buildings
5. Rent to owns
6. Student Housing
7. Condominiums

40
Highlighted Coverage Beneﬁts
1. Broad Form/All Perils Coverage
2. Replacement cost
3. Vandalism caused by tenants -$50,000
4. Permission for vacancy – Up to 120 Days, all other carries oﬀer 30
5. Days.
6. Flood, sewer back up, and earthquake included up to the limit of the policy

41
Highlighted Coverage Beneﬁts, continued…
6. Loss of rental income for 12 months
7. Building by law upgrades
8. Contents coverage of $5,000 free
9. Ice Damming coverage
10. Debris Removal – Additional limit of $25,000
11. Liability coverage of 2 million dollars with option to increase to 5 million

42
HUB Commitment to Investors
1. Dedicated Sales/Service Team only for this investors
2. Internal Claims Handling free by claims specialists
3. Knowledge and expertise in the Real Estate sector, example rent to own,
law oﬃce relationships
4. Free review of your current policy
5. We oﬀer educational workshops and presentations.

@volitionproperties
Now what?

@volitionproperties
Sign Up for Advisory!
● Sign up for a complimentary Advisory
Consultation session
● We will help you determine
○ Where you are at
○ Where you want to go
○ Help you build a customized plan to get there
● Fill out the form (link in chat) or send us an
email at info@volitionprop.com to schedule a
session!

@volitionproperties
Next Investors Mastermind: What does
construction REALLY mean?
● Wednesday, April 21 from 7:00 - 9:00 pm
● RSVP at www.meetup.com/Volition
● The Volition team will guide you through the
construction process of legal multi-family
conversions while pointing out potential
problems and offering up solutions.

@volitionproperties
Masterclass 201: Advanced Business Models
● Summer 2021!
● Deep dive into the EXTREMELY complex world of Legal
Luxury Multi Conversions & Laneway Housing.
● Bigger $$$$$, but bigger ROI.
● Overview of:
○ Process (Volition’s Stepping Stone Approach, COA, Permits, etc.)
○ Financials
○ Timelines
○ Costs
○ How to avoid major pitfalls that can make or break
● You will walk out being familiar with the process and
the business model.

@volitionproperties

@volitionproperties
THANK YOU!

Volition Meetup - Insurance for Investors

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