Are You Buying Wasted Insurance?

Let me start with a simple observation. Insurance companies are in the business of selling policies, and one of the most effective ways to sell more coverage is to describe what could go wrong. Fire, flood, fraud, lawsuits. Every scenario sounds plausible when someone paints the picture for you. And once you've heard the worst-case story, saying no feels reckless.

But here's the thing. A scary scenario is not the same as a scenario that is likely to hurt you. Your job as an owner is to separate the two.

Let me give you a recent example from my own portfolio. My previous insurer had included loss of income coverage as part of our commercial property policy. On paper, it sounded sensible. If the building is damaged so badly that you can't occupy it, the policy pays you for the income you lose while the space is being repaired.

The problem is that this isn't how our business would actually respond to that situation. If the building were damaged to the point of being uninhabitable, we would not shut down. We'd find a temporary sublease, move the team and the operations into that space, and keep running while the original building was repaired. The business would continue. The income would continue. We would never collect on that policy.

When we removed the loss of income coverage from the policy, our premium dropped by more than 50 percent. Think about that. More than half of the premium was tied to a coverage we would never realistically use in the way it was written.

Now, I want to be careful here. I'm not telling you to strip coverage from your policy. Loss of income coverage can be essential for some businesses. If you operate a restaurant, a medical office, or a manufacturing facility that can't easily relocate, a shutdown really could be catastrophic, and that coverage may be worth every dollar. The point is that the right answer depends on how your business actually operates, not on how the salesperson frames the risk.

----------

**Real Estate Espresso Podcast:**
Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)  
iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)  
Website: [www.victorjm.com](http://www.victorjm.com)  
LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)  
YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)  
Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)  
Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  
**Y Street Capital:**
Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)  
Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)  
Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)