Real Estate Investors Are Making THESE Insurance Mistakes

Why It Matters

Neglecting proper insurance strategy can erode investor returns; proactive adjuster engagement safeguards assets and cash flow.

Key Takeaways

• Hire a public adjuster before contacting your insurer.
• Insurers often underpay claims to maximize float profits.
• Common coverage gaps include loss‑of‑rent and business‑interruption protection.
• Early adjuster involvement can cut fees from 20% to 10%.
• Short‑term rentals need extra Airbnb or fire coverage.

Summary

The Taxmart REI podcast episode spotlights a common blind spot for property owners—insurance protection. Host invites Michael Frerieded, vice‑president of Strategic Claim Consultants, to explain how investors can avoid costly claim mistakes.

Frerieded argues that insurers have an inherent conflict of interest, treating claims like the IRS prepares taxes: they aim to underpay and keep reserves, earning a “float” on the money. He recommends hiring a public adjuster before any contact with the carrier; early involvement keeps fees around 10% versus 20‑25% when engaged later.

He likens a public adjuster to a CPA, saying, “The IRS will do your taxes for you—doesn’t end well.” He cites a recent Airbnb fire where the adjuster secured both the property’s loss‑of‑rent and an excess Airbnb policy, achieving near‑full recovery. He also offers a free consult to answer policy questions.

For investors, the takeaway is clear: audit policies for loss‑of‑rent and business‑interruption coverage, add optional fire or Airbnb riders, and engage a qualified adjuster at the first sign of damage. Doing so protects cash flow, reduces out‑of‑pocket expenses, and maximizes claim payouts.

Original Description

Most real estate investors spend a lot of time learning how to build wealth, but far fewer know how to protect it when disaster comes.

In this episode, Thomas and Nate sit down with Michael Fried, Vice President and Partner at Strategic Claim Consultants, to break down what real estate investors need to know about insurance claims, asset protection, and avoiding costly coverage mistakes.

Michael shares why insurance claims are so often underpaid, when investors should bring in a public adjuster, and how poor policy design can leave owners exposed after fires, water damage, storms, and other major losses.

Whether you own one rental or a large portfolio, this episode will help you think more strategically about protecting your properties.

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00:00 Intro – Protecting Your Real Estate Assets

00:32 Meet Michael: $1B+ in Insurance Claims Experience

01:04 Guest Background & Shift to Public Adjusting

03:09 What Does a Public Adjuster Do?

04:26 Why Insurance Companies Underpay Claims

05:32 When to Hire a Public Adjuster (Critical Timing)

07:03 What Size Claims Should Investors Care About?

08:22 Why You Should Always Get a Second Opinion

10:14 Biggest Insurance Gaps Real Estate Investors Miss

11:56 Short-Term Rental (Airbnb) Insurance Mistakes

13:35 Hidden Risks with STRs (Fire, Water, Guest Damage)

15:01 Why Cheap Insurance Policies Cost You More

16:36 Multifamily Insurance Mistakes (Loss of Rent Issues)

18:50 Hotel & Commercial Property Insurance Challenges

20:14 Deductible Buydowns & Risk Management Strategies

22:00 Turning Property Loss into Opportunity (Data Centers)

23:12 Data Center Investing Trends & Insurance Insights

24:17 Why Most Policies Lack Proper Coverage

26:10 Understanding Umbrella Insurance Policies

28:02 When to Update Your Insurance After Renovations

29:38 Filing Claims: Your Policy vs Third-Party Liability

31:34 How to Prepare BEFORE a Disaster Happens

32:28 Documenting Your Property (Drone Footage Strategy)

34:10 Avoiding Policy Lapses (Real Case Study)

35:04 Building Your Insurance & Advisory Team

35:40 How to Contact Michael

37:18 Disclaimer

The Tax Smart Real Estate Investors podcast is for general information purposes only and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Information on the podcast may not constitute the most up-to-date legal or other information. No reader, user, or listener of this podcast should act or refrain from acting on the basis of information on this podcast without first seeking legal and tax advice from counsel in the relevant jurisdiction. Only your individual attorney and tax advisor can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this podcast or any of the links or resources contained or mentioned within the podcast show and show notes do not create a relationship between the reader, user, or listener and podcast hosts, contributors, or guests. Any mention of third-party vendors, products, or services does not constitute an endorsement or recommendation. You should conduct your own due diligence before engaging with any vendor.