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We’re going to talk about insurance, everyone’s favorite subject. Probably one of the most boring things in the world to talk about is insurance. However, as a private lender, insurance policies keep those properties that we invest in and we put liens upon. It keeps them safe and keeps us safe and our borrower safe. They’re a good thing. We want to talk to you about property insurance and the concept of indemnity, but before we get into all that fun stuff, I’d like to direct you over to the PrivateLenderPodcast.com/expo. This will be a link to take you to get tickets to the Quest Trust Company Self-Directed IRA Expo that’s happening in Houston. You get a 25% discount with the promo code PLPODCASTS. I don’t get any money from the tickets, but I get pride. Whether it’s realistic or not, my goal is to drive as many people more than any other sponsor at this event because it’s a cool thing to do. August 22nd, the night before the expo, there’s going to be a happy hour at the Royal Sonesta Bar. Come on out if you’re going to be in Houston. You can meet the vendors, a lot of VIPs and other people from Quest. I look forward to seeing everybody.
Let’s get into the heart and matter of the episode. Let’s talk about property insurance and the concept of indemnity. It is an insurance term that is often misunderstood. I want to walk you through a couple of terms and this is one of them. The word indemnity, to put you completely back in school though, it’s a Latin root, indemnis meaning unhurt, undamaged or without loss. That is at the heart and soul of every insurance policy. If something bad happens, then that policy will pay you back to get you to the position that you were in right before the incident occurred. To get back to where you were at the moment before the loss, that’s the whole idea. You’re not supposed to profit from insurance even though I think a lot of people do when it comes to claims, especially I’ve seen on houses. You can do some of the work yourself, save some money. You can make some money. The whole principle of the insurance is to put your property back to where it was right before whatever that incident was. That peril that occurred, whether it would be a hurricane, tornado, fire.
Indemnity insurance is a contractual agreement or an insurance policy in which one party guarantees compensation for the...
