What is title insurance and why do I need it?

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Welcome to the Ask Ralph Podcast where listening to an experienced financial professional with over 30 years of experience can help you make sense of confusing questions, current headlines and industry trends about taxes, small business, financial decision making, investment strategies, and even the art of proper budgeting. Ask Ralph makes the complex simple by sharing his real world knowledge from a Christian perspective with all things financial.

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You ever worried about losing your home because someone from the past claims they own it? Imagine if you're spending your life savings on your dream home, only to discover that someone else has a legal claim to your property. I'm addressing a crucial question that could save you from a financial nightmare. The question is this. What is title insurance, why do you need it, and how does it protect your biggest investment? That's our question of the night. It's our first question of the night. Then I want to answer your questions. Well, thank you for joining me. This is your weekly opportunity to get your questions answered. Feel free to ask your questions in the chat or make a comment.

If you do send over a question, do me a favor and just put a Q and a colon with your question next to it so I can see it. Feel free to comment and I want to encourage you to take our show survey. I'm giving away a $250 Amazon gift card to anyone who completes our show survey. It takes less than five minutes, and I promise you it won't take you more than that.

Here's the deal. Go to askralphpodcast.com/survey. And the deadline for entering the survey is December 10th at midnight, because on December 11th, some lucky person that completes the survey is going to win an Amazon gift card for 250 bucks. That's right in time for Christmas. Again, go to the survey.

You can go to askralphpodcast.com/survey and stick around later in the show. I'm going to award somebody here that's listening right now a hundred-dollar Amazon gift card. We'll do that later in the show. Now let's get to our first listener question and this one comes to us from Michael in Atlanta and he writes this.

"Dear Ralph, I'm in tears as I write this. My wife and I finally found our dream home after searching for two years. It's perfect for our growing family and in the school district we wanted for our kids. But now with all these closing costs go piling up, our lender mentioned something called title insurance.

Listen, we're already stretching every dollar we have for the down payment, and honestly, I'm worried we might have to walk away from this house if we keep getting hit with more fees. The lender says it's required, but it feels just like another way for someone to make money off us. My father-in-law says we're being too cautious and should just get the minimum required coverage.

Ralph, I'm losing sleep over this. We've always spent, we've already spent $1,500 on inspections and appraisals, and now this? Can you please explain what title insurance is and if it's really worth draining our savings account. I don't want to make a mistake that could hurt my family's future, but I also don't want to waste money on something we don't need.

The stress of this decision is affecting our marriage, and I'm praying for guidance." Now listen, Michael, I hear the emotional part in your voice. I hear it in the struggle that you're going through. I get it. You're trying to balance emotions and you're trying to balance this difficult financial decision.

And listen, I get it. Buying a house is probably one of the most stressful things you go through. And listen, there are unexpected costs during the home buying process. I've been through it a few times and then you add to it the family dynamics, it sounds like you're getting information from all sides. You've got this decision-making pressure coming at you and the good news is I've got answers for you. Now if you're facing a similar financial dilemma, remember you can submit your questions for the show. Maybe you don't want to put them in the comments tonight, but you can just go to justaskralph.com, or like I said, put them here in the chat. Well, now let's start off with our Bible verse tonight. And this one comes to us from the book of Proverbs, and it says this, it says, "The prudent see danger and take refuge, but the simple keep going and pay the penalty". You know Michael, your question reminds me of the wisdom found in this Proverbs verse, and it talks about that prudency. So let's break it down. Let's get right to it today. Let's break down. There are really two types of title insurance, and then we'll get into some more details.

There's a lender's title insurance and there's the owner's title insurance. So let me talk about the differences. Let's start with lender's title insurance. This is going to be required by most mortgage lenders. It's going to be part of the deal. If you want them to finance your house, they're going to require it.

And it only protects the lender's interest in your property. So it's only going to help them. It doesn't help you at all. And coverage will decrease as you pay down your mortgage, because obviously there's less risk. The other component to this or the other part of insurance, and you will see those listed separately.

If you have a closing attorney, they will explain this to you. It's called owner's title insurance. Now owner's title insurance is optional. You heard me right. It's optional, but it's one of the things I highly recommend because it protects your equity in the property. Unlike that lender's insurance, it's only protecting the lender.

This owner's title insurance protects you and the coverage increases as your property value appreciate. So as the value goes up, this coverage is going to be more valuable to you as compared to the lenders, because as they get that loan paid down, it's less of an issue for them. And I've got the perfect story for you about this.

And this one comes right from one of my clients. So let me tell you about the youth pastor, David. And his story, let me tell you, it deeply affected me and it changed how I view title insurance and why I talk about this on the show. And I talk about this with clients when they tell me they're buying a new property.

So picture this, him and his wife. They spent seven years scrimping and saving to buy their first home. And he told me, he said, Ralph, we found the perfect home. And he really saw it as God's perfect blessing. It was this charming three-bedroom house. Just picture the three-bedroom house, the white picket fence.

It had a great yard for their two young children. And that's where things got challenging. So all of a sudden, you know, David was a pastor, youth pastor. He was trying to be a good steward of his finances and he was working on buying this house. They were reviewing the sales contract and the closing documents and his real estate agent said, hey, David, listen, there's one thing you need to talk about on here and that's title insurance.

And David thought about it for a minute, and he says, you know, we're trying to make this house work and we're scrimping and saving just to get to what we have now. So he considered this just one of those unnecessary expenses. Like I said, he had already saved for seven years. He didn't have extra money, and the lender already acquired a policy for the lender.

So that wasn't even negotiable. The attorney was going to handle that. But then when he saw the price tag for this personal or the, you know, the borrower's policy, he saw it was $850. And he said, oh, you know, I don't have the money for that. He could use that money for his emergency fund or help decorate this new place.

So he went to closing, turned down the buyer's title insurance, and he started enjoying their new home. Well, you know what's coming next. Two years later, the crisis came. I remember he told me this story. He said, I was one, it was one day Ralph, during the week. I was preparing for my Sunday sermon and all of a sudden Ralph, he said, I got this knock at the door and I thought, well, this is strange.

Why’s somebody knocking on the door? He usually wasn't bothered when he was home working, and it was the mailman standing at the door and the mailman had a certified letter. If you're like me and you're like David, when a certified letter comes, it usually means there's a problem. So David's heart sank. He just didn't, he was just sick with thinking about what could this be? And it turns out, this is really a sad story. Well, the seller had a brother. We call this as his estranged brother. And it was an unknown heir and a former owner of this house. And his brother had been serving overseas. And now all of a sudden, he claimed he never signed off on the sale of the property.

And he demanded his full rightful ownership percentage. And I remember David called me. I was his tax advisor. I helped him on his finances. Once a year we met, you know, occasionally if there was something going on and mind you, listen, I'm not an attorney, not giving you legal advice, but I'm giving you practical advice. And think about it for a second.

So now all of a sudden David's got this demand letter that this guy was estranged from his brother. He was serving overseas. And now he's saying that he owns the house that David and his wife owned. And let me tell you why this situation was so devastating. See, when you buy a home, you got to think about this for a second.

You're not just buying the property. Yes, you're buying the property. You're buying the house. You're buying all the stuff that's in it, but you're buying its history as well. It's kind of like adopting a child. When you adopt a child, one of the questions you ask and I've never adopted a child, but my clients have done this. They told me this.

You want to know that child's medical history. You want to know their family background. You want to know everything that could affect their future. Well it's the same when you buy a property. Like I said, you're not just buying that property. You're buying this property's history. So let's talk about what title insurance actually protects.

One of the things that protects, just like in David's case, it protects what's called this unknown heirs. And that's people who might have inheritance rights. This brother, estranged overseas. If David had bought this title policy for himself, it would have protected it. Just like family members who weren't properly notified of the sale.

If there's a missing signature on critical documents, all of those things are covered as part of this buyer's title insurance. That's the first thing. Unknown heirs. Second thing, documentation issues. Let's say for example, it's a remote closing and somebody forges documents. It would cover that. Maybe the attorney makes a mistake or somebody at the recorder of deeds make a mistake, and it's improperly recorded. Maybe there's a mistake in the public record.

Somebody puts something wrong, or maybe there's missing or invalid notarizations. All of these things would be covered if you bought that owner's title insurance. It also covers financial claims. Let's say for example, the attorney did the settlement. And as part of that, the attorney's supposed to do what's called a lean search and that lean search goes out and sees if anybody has a financial claim on the property. Is there a mortgage?

Is there a lien? Is there a levy? Is there some kind of outstanding loan on this? Well, sometimes these searching people make a mistake. So this lenders, excuse me, this individual policy, the borrower's policy, the buyer's policy would cover if for some reason, all of a sudden there's this outstanding mortgage that's found. Same thing goes along with property taxes.

The attorney's supposed to convey what they call clean title, but sometimes stuff gets missed. So maybe there's an unpaid property tax. It's going to cover that. It also covers any contractor's liens. Maybe somebody had done some work on the property, and they filed a lien because he didn't get paid. It would cover that.

And last but not least, it also covers HOA dues that weren't disclosed. So let's say for example, the homeownership association, you weren't aware that there was dues at the time of settlement, it would cover those things. It also covers some legal rights. Those are things like undisclosed easements.

Like when you bought the property, the seller is supposed to disclose if there's any easements or way people go in and out of the property, it would cover that. It covers any boundary disputes. If you have a survey done and there's an argument, I can still remember we had this situation. It wasn't too long after my wife and I got married, we bought this house in Townsend, Delaware. And it was new construction.

Every house in there was new. And we moved in, and we had the two young kids, and we had a German shepherd dog. And we said, you know, we're going to put a fence up around this property. And we had the property survey. We found the buried survey markers and all that stuff. So we put the fence up and listen, when we put the fence up, we moved everything in a little bit from where those boundary lines were. Well all of a sudden, the neighbor that lives behind us starts getting upset. Start saying your fence is on my lawn. Your fence is in my yard. Now I knew very well that we had come in from that. Well, on this one day, I can never, I’ll never forget it. My wife and I are sitting on the back patio or something and this dude starts taking our fence down. I say whoa, dude, you need to chill. So I walked out there to him.

I said, look, here are the stakes. You can see that it's in our yard. But if you had that type of issue and you had bought that buyer's title insurance, it would cover that. It also covers right-of-way issues or zoning violations, all those things. It covers many things. Well, let's talk about costs because we said in David's case, it was $850.

But think about that. That's a one-time fee and it's actually quite reasonable. It's there's no annual or monthly fee like other insurances. Like, listen, if you're buying homeowner's insurance, that's an annual policy. If you're buying, you know, policies for your major systems in the house, that's an annual policy.

But this thing is a one-time fee that covers you for the life of you owning this property. And think about it. It's not expensive. It's about a half to 1 percent of your home's purchase price. And it's lifetime protection. And think about it. Most people, your house is your biggest investment. Why wouldn't you want to get the maximum coverage?

Well, let me tell you how title insurance saved David's situation. Because the lender required their policy, he didn't have his own policy, but the lender required their policy. The title company had actually done a thorough search before closing. That's what I was talking about. That lean search, they went out and hired a search company.

And in David's case, they were able to prove that the seller's brother had in fact, sign off. He was full of crap at this point. They had documents that showed that he had signed off on this property. So the lender was covered, but here's the problem. The lender was fine, but David still had to hire an attorney to defend his rights.

And this is the truly tragic part. It cost him $3,500. And listen, that's a whole lot more than the $850 that he would have paid for that owner's policy. And also the stress on his family was immense. It affected his ministry work and his children's sense of security. They were all rattled by this. And it taught me something profound about stewardship.

And I want you to hear this. Sometimes what looks like wise financial management in the short term can truly expose us to significant risks in the long term. It's just true. We can make short-term financial decisions that seem like they're the right decision. Now, David's a Christian guy. He's a prayerful guy, but he looked so short sighted.

He didn't want to spend that $850 cause he was thinking so short sighted, but he wasn't thinking about the long term consequences that that was just a cost of buying a house. And it ended up costing him three or four times what it would have cost him had he bought the insurance. See, and as Christians, we're called to be both wise and being prudent with our resources. Wise and prudent.

You got to balance these and think about, listen; in doing this show today, I found these statistics. And listen to this. These will rattle your cage. 25 percent of all title searches. This is every time a property is sold. 25 percent of title searches reveal serious issues that have to be resolved.

So a lot of people just take that for granted because the attorney that's handling the closing is handling that. Now, maybe sometimes you got involved in those. I know in some of the properties we've bought, we've had to get involved in those because a name was wrong or there was some kind of claim that needed to be resolved.

But think about that. One in four of these title searches reveal serious issues. And think about this. This is the numbers that go alongside of that. The average title claim, that's when there is an issue, costs between $20,000 and a $100,000 to defend because usually they're not simple situations.

And one in every hundred title policies results in a claim. One in every hundred. It's 1%. It's still a lot. And see, here's the thing. The beautiful thing about owner's title insurance is that it doesn't just protect you. It also protects your heir. So if you're leaving your home to your children or to somebody else, they're protected as well, because you've got that, that proof that you bought that title insurance when the property was conveyed to you.

So you got to think about it. It's truly legacy protection and you're leaving it for your children. Now let's talk about when you'll encounter title insurance. A lot of people, this is foreign to them. They don't even know when it happens. Most of the time you're going to incur it at the time of purchase.

And like I said, most lenders are going to require it because they want to make sure that you're going to pay them the mortgage. They're going to make sure there's no issues that they have a clean, a note and a mortgage so that if you don't pay, they can go take that property back. And it's optional, but critical for owners.

That's what we've talked about tonight. If you haven't heard or anything else I said. It is optional, but it is crucial for owners and usually you can negotiate who pays for it, whether it's the buyer or seller, that's all during the purchase price. You also encounter this when you're doing a refinance, because then a new lender is going to have a policy required because now you've got a refinance.

One lender is paying off another lender and they want to make sure they've got clean title to this. So again, they're going to talk about this title insurance. Now here's the thing. Don't get snookered on this one. If you bought the buyer's title insurance or owner's policy, that policy still remains in effect. And you don't necessarily, and again, I'm not an attorney, so I'm not giving you legal advice.

Talk to your attorney, talk to your real estate agent, but generally that existing owner's policy will remain in effect. And if you want to buy a new one, you can usually get it at a lower rate because there's not as much issue because they already had clear title. There was already a policy but see a lot of attorneys don't want to tell you this.

So ask questions. Now, you could be doing a situation, I got a client right now that's going through what I'll call a cash purchase. They've got other people that are going to be the quote lenders, but it's really a cash deal. So there's no lender requirement. And when I had this conference call with them the other day, I said, listen, make sure you mentioned to your attorney that you want to buy title insurance because you're not going to get that requirement from the lender, but you still want this.

It's critically important for owner's protection. And like I said, it's often overlooked, but equally necessary in those cash purchases. Now, before we get onto the next topic, we'll see if we have any questions and then we're going to do our drawing. Let me ask you a question. Are you losing sleep wondering how you'll afford everything on your holiday list this year?

It's the Christmas season. Thanksgiving's coming up in just a few days, black Friday after that, and people are in that rush to buy, and maybe you're like a lot of people. You're tired of starting every new year buried under a mountain of holiday debt. Listen, we all want to create those magical Christmas memories, but we'd like to do it without the financial stress that usually comes along with it.

Well, I'm going to give you some ways to discover peace of mind. I wrote a guide. It's called surviving the holidays without going broke. It's free. And by getting this guide, you're going to learn a proven budget system that actually works. If you follow what I say in the guide, you will be able to get through the holidays unscathed and create a budget to get you through it.

I also share some smart shopping strategies to help slash your cost. I give you some ways to create magical memories without maxing out those credit cards. Cause you don't need that. You don't need that debt come January, February, March. Listen, I got clients that are paying off Christmas debt in the summertime.

Also in the guide, I have tips for teaching your kids gratitude. Listen. We live in a gimme more world. These kids are crazy. They want this. They want that. Now, mine are older. They're not like that anymore, but I can remember they were young and listen, I was young too. I was the same way, but we can teach kids that gratitude.

We can show them how to be grateful for what they have. And finally, the whole core purpose of this is how to keep faith and family at the center of your celebration. Listen, don't let January's credit card bills steal your holiday joy. You can download your guide now. You get that by going to askralphpodcast.com/christmas. Again, that's askralphpodcast.com/christmas and make this your most meaningful and dare I say affordable holiday season yet. Listen, your stress-free holiday season starts here. Go to askralphpodcast.com/christmas. Well, now let's talk about some action steps. You know, I always like to give you something to take action.

I can give you all the information in the world, but if you don't put it to work, it's useless. So let's talk about some action steps. Number one, this is Ralph's recommendation, but again, talk to your attorney, talk to your real estate agent. I always recommend purchasing owner's title insurance when buying a property.

Yes. If you're getting a loan, the lender's going to buy it, but I recommend you buy it for yourself as well whenever you buy a property. The other thing you can do is you can research title insurance companies to compare rates and coverage. Now in Delaware, it's a little weird. I don't know how it all plays out, but it seems like the attorneys, they have a relationship with one title company.

So you have to ask your attorney and ask your agent if they're willing to negotiate that or willing to compare prices. Number three, this is really important. Keep your title insurance policy in a safe place with other important documents. You're going to want to have that in the event that you need it.

And a lot of people look, I've been through many settlements. You're getting all these doc. It feels like you're signing for days. You get this whole stack of stuff. And what do you do with it? A lot of times it goes in that cabinet. It goes in that drawer in the top of the closet somewhere, but make sure you're aware of where that document is.

And here's the last thing I'm going to mention. Number four, consider title insurance even in refinancing situations, because it's not very expensive and it might give you a little bit more peace of mind. Well, now let me take a look and see if we've got any questions in the chat. I don't see any right now.

So let's move on to our drawing. Now, last week, when I tried this, this did not play out well. So we're going to try to do it tonight and see what we can do. So let's go ahead and see if this works tonight. So we're going to hit start. There we go. So if you look at that, all you've got to do, if you want to be entered into the drawing, and this is going to run for five minutes, let me go ahead and kick that off here.

And see if we can, all you got to do is comment at Ask Ralph to enter. So click on what should be on your screen right now. Like I said, this is the first week we're doing it, but I'll encourage you to go check it out. Click on the screen. It should be running right now. And let's see what it's doing here. And like I said, yeah, it looks like it's running.

It's like we've got seven people who are on the live show right now that are in the mix. If anybody wants to comment let me know whether it's letting, there we go. So now we're getting some people enter. That's what I wanted to see. So you can see the countdown starting. So we've got another four minutes and 47 seconds. If anybody has any questions, you know, feel free to put them into the chat.

I welcome everybody here. Connie, I see you're here. I want to thank you for joining the program. And I apologize if I seem a little tired. It has been a long day, you know, we always get Fresh turkeys for thanksgiving and today I drove down to the farm there. It's just west of Dover. We always get fresh turkeys, and they've got a great production going down there.

It's amazing to me how many turkeys they sell but then I also went to the chiropractor today. So it's been a day. Mary Lou’s, I welcome you to the show as well. Hopefully you entered there. So again hit, just pound Ask ralph to enter. You got to enter that in order to enter into the contest. It looks like we've got a Dallas Cowboys fan here tonight. That's pokemonguy3309. Looks like he did it correctly.

So again, you have to put in pound Ask Ralph. Make sure you do it right. It's pound A s k R a l p h with no spaces. So Connie, make sure you enter that. Salty waters, you're going to want to enter that as well. Marylou's, it looks like you did it but you want to put Ask Ralph but put it all in one word. So don't have the don't have the space. They're just pound Ask Ralph.

So far only one person's entered. So if nobody else enters it looks like Pokémon guy. Okay, there we go. Now we've got somebody else that's entered. So we've got Ask Ralph, excuse me Salty water says enter Mary Lou’s don't forget to enter yourself and Connie make sure you enter. So we're going to give away this hundred-dollar gift card right in time for Christmas here. Actually, you'll get it here in the next few days but I just wanted to get people to come to the show and to really enjoy the show and while we're wrapping that up,

I don't see any questions coming in. There we go. It looks like Connie's entered. That's fantastic. Well, we got another person here that's entered as well. We are making progress. There you go. And again, just put in their pound Ask Ralph and there'll be an automatic drone here shortly. And I'm just happy that it's working tonight because last week, we were struggling.

And while we're doing that, let me just bring something to your attention. Listen, I'm really trying to grow the show. I'm trying to reach more people and I'm trying to share the show with others who will benefit from the information I present. And remember, I do a daily podcast and then we do it, um, every, uh, Tuesday night.

So. That's a fantastic thing. Yeah. And, salty water just said, it looks like you got it. You got to do pound ask Ralph, all one word and a capital letter. But if you see your picture pop up on the screen, that means you have been entered into the contest. So I apologize for any, any confusion.

But like I said, I'm really trying to grow the show. One of the best ways I can do that is for you people who are listening. Those of you who are joining us, share the show with somebody. It could be simple as sending them an email with a link and say, listen, there's this show, go to ask Ralph. com and tell them how it's impacted your financial and faith life.

Because listen, word of mouth is the key and you're sharing with your friends and family will help us grow the show and reach more people. So it looks like we got about a minute and 44 seconds. Does anybody else have any questions for me to answer tonight on finance or faith or accounting? Yeah, we're getting close to the end of the year.

So I think next week or the next couple of weeks, I'm going to be talking about how to get ready for year-end for taxes and all that sort of thing. It looks like Mary Lou's you are entered. So you're good to go. It looks like salty waters. Is entered it looks like Pokémon Number 3309 Pokémonguy3309 is entered and it looks like Connie Corn silk you're entered as well.

So I really do appreciate all you being here I think there's more people on than that So if you don't forget if you want to be a member in the contest Make sure you go and put in that comment pound a s k r a l p h. You got 56 seconds left to get into this hundred dollar amazon gift card drawing and I want to give it to somebody because it's that time of year And we're trying to grow the show So again, if you know somebody that would benefit from the show Do me a favor this week or do me a favor tonight Share this episode share the show.

All you got to do is send them an email and say listen There's this guy on uh on the internet that you can go and listen to he does a daily show. He answers questions You know And again, you can send questions by going to just ask Ralph. com. You can join me on Tuesday nights, all of that information and Mary Lou, thank you so much for your comment.

I truly do appreciate that is, that is very nice of you to say, let's see if I can. I can make this work. Let's see. There we go. Yep. Great info. Hey, thank you. I truly appreciate that You know, it's great to get feedback and the other thing I will mention like I mentioned at the beginning of the show since we got It looks like we've got about four seconds left.

So hopefully everyone has got their entry in so Let's see what happens next, so it looks like it's going to there we go. And what's picking the winner right now So let's see who the winner is tonight, and I will be in touch with you to get your answer Gift card to you. So let's see who the winner is.

This is exciting. The winner is Mary Lou's. Congratulations. You've won a hundred dollars Amazon gift card, so I will be in touch with you to get that to you. And thank you so much for being involved today and looks like one WFC. You missed a deadline by just a minute. So make sure you come back next week.

We're going to do it again next week. So now I guess I don't have any more questions. Let me get back to where we're at here and let's go to my Just ask Ralph question screen here and I’m going to wrap up for today. I just again I want to thank everybody for joining us You know, like I said every Tuesday evening 7 pm. Share it with your friends and family. Remember this was you as I close tonight, I wish you all a happy thanksgiving and I am grateful that you've taken time to join me I'm grateful that I can help you In mastering your finances and doing it with this Christian perspective because listen, here's the truth My passion is to help you achieve financial success.

I want to see you live out. Oh, wait a minute Oh, we got we do have a question. So let me go ahead and switch here. We’re going to do this on the fly because I want to make sure that I get to the question here. Let's see. There we go. Let's go to and uh, where is the screen I want? I think it might be right here.

There we go. Okay. So we do have a question from Eric Johnson. So let me drag that over here, Eric, and thank you for the question. Okay. It says quick questions about insurance. Does my umbrella policy cover me with my real estate? So that's a great question. And generally, yes. So the whole point of an umbrella policy is that it ties all of your policies together.

So like, for example, my wife and I, we have an umbrella policy. And basically what that does is it takes and ties together your automobile policies. Maybe you've got watercraft. And real estate policies. And what it does is it boosts the total amount of coverage you have. So for example, let's say you've got an auto policy and it's a great questionnaire, by the way, you've got an auto policy that maybe you've got a total limit of 300, 000.

And then maybe you've got a real estate policy with a, maybe another 300, 000. Those are sort of standard policies. Well, if you add that umbrella on it, you tie the two policies together and maybe you go up to a million dollars in coverage. And it's a lot cheaper, like umbrella policies are dirty, but, and I'm shocked that more people don't have them.

And in fact, if you go out on the ask Ralph website and click on the search icon, you can look at umbrella policies. And I have an episode that I did all about umbrella policies because they are so cheap and people overlook them and they have such a great amount of value because the truth is, and I've had situations, I remember I had a client, A few years back.

And here's the problem. This is a crazy story. So picture this. It's like 30 years ago, I was just getting started in my career. Yes. I've been doing this for 30 plus years. Well, actually I've been doing this since I was eight years old. If you want to hear the truth, but nobody believes that, but that's a story for another time.

But here, let me tell you that story too, while we're here, because. Eric will appreciate this. I grew up in accounting. You know, my father has an accounting practice. So this is what I've been doing since I was eight. I was copying tax returns at eight at 10. I'm doing short form 10 forties by 12. I'm answering the phones.

So I grew up in this, but anyway, getting back to the story. So about 30 years ago, I had this client come in and I remember them telling me about this homeowner's claim. They had, they had hired somebody to come once a week and do cleaning on their house. Well, these people always entered into the garage because the parking area for their house was right off the garage.

Well this one day it's snow and it's ice. And these folks decide they're going to walk around the front of the house down the sidewalk that wasn't cleared because it's snowing and maybe they were opportunists. I can't say that for sure. But anyway, long story short, person falls, hurts themselves. And then of course they sue.

Well, this person's homeowner's insurance, you know, the truth is they want to settle because they want to cut their losses. And this was a pretty bad fall. I think there had some, some back issues and all this kind of stuff. So the insurance company says, hey, fine, we'll write you a check for 300, 000 because that was the policy limit.

And the person that the person and I knew my client at the time says, okay, well that sounds good, but here's the problem. They were getting sued for six or 700, 000. So my client says to the insurance company and to their attorney says, hey, wait a minute, who's going to pay the difference? And the insurance company says, I don't know what to tell you.

We're only on the hook for 300, 000. So if they want to see you for more than what we're willing to settle for, that's on you. So Eric, that's exactly the situation where an umbrella policy would cover them. So let's take that same scenario and let's say that they had that umbrella policy. Now all of a sudden, they don't just have that 300, 000 coverage.

Let's say they have a million-dollar umbrella policy. Well now, and here's the thing, like seriously, I think for the umbrella policy that I have in mind is a little complicated because we have the farm and all this kind of stuff. I want to say it's less than 800 a year. So I go from 300, 000. And this is on a car claim.

So if you're out driving, you'll have an accident. And God forbid somebody gets killed, it's going to give you a higher amount of coverage. So like I said, in this case, had they had that million-dollar umbrella policy, they could have claim anything up to a hundred or up to a million dollars and it wouldn't have cost them a dime.

So I'm a big proponent of those umbrella policies. And Eric, I thank you so much for that question. That is a great question. And it's, it's one of those things that so many people overlook and it's something you don't have to overlook. You really can. It's really not that expensive. Now I will throw one more thing out there.

It does mean you have to make sure that you're under coverages, like your homeowner's policy and that you, Your car loan policy, there are certain requirements that the umbrella policy people are going to require. Like they may say, your deductible can be no more than this, and you have to have at least this level of coverage.

So just talk to, I'm not an insurance agent. I'm not an attorney but talk to your insurance agent and find out if you can do that and what it will cost. And I'm going to tell you right now, like I said, I did a show about this, so go check that out. Well, if I don't see any more questions, I am going to call it a night because we have got an answer tonight.

I want to thank everybody again for coming out. And as I always close the show, remember my passion is to help you achieve financial success. I want to see you live out your dreams. I want to see you grow in your faith. And I know working together by coming to see me here, by tuning in daily, by watching our YouTubes and our, and our, all the things we put out there, we can master your finances from a Christian perspective.

So as always in this show. I'm going to add it a little bit, a little bit different time. I want you to stay financially savvy. I want God to bless you. And I also want to just say one more time, I am grateful and I'm thankful for all of you who tune in and listen every week or every day if you're a listener.

And thank you, Eric. I appreciate that too. So God bless all of you and have a great and safe evening.

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