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How Insurance Really Impacts Real Estate Cash Flow (What Investors Miss)

By February 5, 2026Real Estate Pros Show

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Show Summary

In this conversation, Beth Boisseau-Coots, a commercial insurance broker, discusses the critical role insurance plays for real estate investors, particularly during property acquisition and in high-risk coastal markets. She emphasizes the importance of planning for insurance early, explains the cyclical nature of insurance pricing, and highlights the need to understand different coverage types for rental and investment properties. The discussion also explores unusual insurance requests, tenant-related risks, and why requiring renter’s insurance is essential for protecting landlords from potential damages.

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    Investor Fuel Show Transcript:

    Beth Boisseau-Coots (00:00)
    I have a number of neighbors, as a matter of fact, who are selling their coastal properties in Texas because the insurance costs have gotten so outrageous. It’s more than their house payments.

    on these vacation homes and even the short-term rental income does not make up for the cost of the insurance. So it impacts their cash flow significantly. So I would say if an investor is looking at a tier one or even a tier two county property, they need to start looking at what the insurance costs are going to be immediately because even if it’s a great deal, it may not be worth

    Dylan Silver (00:12)
    Wow.

    Beth Boisseau-Coots (00:41)
    what their insurance coverage is going to cost.

    Dylan Silver (02:16)
    Hey folks, welcome back to the show. Today’s guest, Beth Boisseau-Coots is a commercial insurance broker in Austin, Texas. Beth, thanks for taking the time today.

    Beth Boisseau-Coots (02:26)
    Hi, thank you. Thank you for having me. Excited to be here.

    Dylan Silver (02:30)
    Now, I mentioned to you before hopping on here, I’m particularly interested in speaking with you because I come from a background of working with investors and specifically single family home investors, flippers, and then also folks who may be buying small multifamily duplex, triplex, quadplex. I know this is a large part of your book of business. And I’ve literally never had this conversation with them, which is what type of insurance do you have? And believe me, I’ve seen…

    Lots of cases where they would need some insurance. In your perspective and through all the investors that you work with, when do investors really most reach out to you? Is it when something goes wrong? Is it when they’re looking at buying a property? When are you typically hearing from investors?

    Beth Boisseau-Coots (03:23)
    is a very good question. It really varies. you know, unfortunately, often it’s kind of a last minute, my goodness, I’m going, you know, I’ve got a closed date for this investment property, and I need insurance and the closed dates tomorrow. And that’s really not the best time to go looking for your insurance. ⁓ So, ⁓ and that’s all too often that that is the case.

    Dylan Silver (03:44)
    Yeah.

    Beth Boisseau-Coots (03:52)
    I would say the best time to start looking for insurance is as soon as you decide to become a real estate investor, period. You don’t even have to have a house. yeah. Or start looking at the options, yeah.

    Dylan Silver (04:00)
    I’d to.

    Get some. Yeah, you know, I

    I’d like to, if I can, get into the weeds a bit here with you on some of this because for myself and other folks, there’s so much that can go wrong when you’re buying real estate. This is why there’s greater risk, it’s more speculative, there’s also, potentially you could lose your shirt doing a flip. So of course, people, when you talk about insurance on these properties, you’re thinking about weather and things that can go wrong as far as that. Are there also types of insurance for

    you know, when like a foundation could shift or something like this that could potentially cause the property to need repairs at some point in time in the future.

    Beth Boisseau-Coots (04:48)
    So foundations are typically not covered on a property investment policy. ⁓ So it’s going to be usually the structure itself, the roof, the interior fixtures, things of that nature. I think that when you’re looking at a potential property, it’s always a good idea to really take a

    hard look, you know, have the inspector that you trust look at all of the components of the property so that you’re not biting off more than you can chew. And with that, knowing that most property policies aren’t going to cover a foundation. So if there are foundation problems, first of all, know that they’re there, what needs to be done to fix it, and then you can make a decision on whether it’s something that you’re willing to take on.

    Dylan Silver (06:30)
    Yeah, mean, foundation is a big, big deal. I mean, I’ve seen properties get flipped. And then once the flip is done, there’s a foundation issue that was not there beforehand. And you’ll see a crack from up the side of the building. say, that’s not good. I would like to maybe pivot a bit here, Beth, and talk about when people are buying in different markets, you know, one of the big factors is the cost of insurance in general, and how that can not just impact insurance, but the price of the homes.

    Houston being a great example of this. I’ve looked at some deals in like Galveston and just different areas of Houston and I’m like, that’s a really nice, it looks like it could be a short term rental even, but it’s being sold at a price where I’m like, how’s that even possible? So if we’re looking at like Houston, Texas in particular, can you break down some of the difficulties with insurance that people may be facing when looking at buying these properties?

    Beth Boisseau-Coots (07:26)
    Where should I start? So we’ve got, Houston is coastal and in insurance we call that a tier one property. So any county that has the county line is touching the coast is a tier one county. And then any county that’s county line is touching the county of a ⁓ tier one, how to say this, a tier one county is called tier two. Both are extremely difficult to

    get insurance in in the first place. And when you do find the insurance, it’s expensive. Houston, being a tier one county, is going to have very expensive insurance costs.

    I have a number of neighbors, as a matter of fact, who are selling their coastal properties in Texas because the insurance costs have gotten so outrageous. It’s more than their house payments.

    on these vacation homes and even the short-term rental income does not make up for the cost of the insurance. So it impacts their cash flow significantly. So I would say if an investor is looking at a tier one or even a tier two county property, they need to start looking at what the insurance costs are going to be immediately because even if it’s a great deal, it may not be worth

    Dylan Silver (08:25)
    Wow.

    Beth Boisseau-Coots (08:55)
    what their insurance coverage is going to cost.

    Dylan Silver (08:57)
    Now, is there a way where you could see this trend changing over time? if people were, and I don’t know, because I’m not in this space, but if they were more maybe like disaster resilient structures in place or different construction methods, would that potentially change the way the insurance underwriting is done? Or is this basically one of these deals where, it’s expensive now, but it’s going to be more expensive in the future. So, you know, buy now type of thing.

    Beth Boisseau-Coots (09:25)
    That’s a good question. It’s actually cyclical. So the answer is two parts. Insurance is cyclical just like any other financial realm. And you’ll see costs go up and down according to what the insurance costs in that area have been leading up to that time period. You’ll see with that,

    reinsurers, which are the insurers for the insurance companies driving a lot. if, you know, costs have been significant in an area, the reinsurers are going to say, Hey, we either don’t want to, we won’t insure you insurance company if you’re writing in this area, or they’ll put stricter parameters on it.

    So, um, you know, that’s when you see premiums go up, you see, uh, deductibles go up and

    and the underwriting become more difficult. So that’s part of it. The other part of it is, of course, the building materials, the age of a structure, just the proximity to the coast and different things like that. So you’ve got a brand new wind resistant roof on a cinder block building that was built six months ago.

    you know, it’s going to be much more favorable to underwriters than something that, you know, is 50 years old, ⁓ not well cared for, doesn’t have all the same ⁓ building code compliance things for those areas.

    Dylan Silver (11:42)
    Right.

    I want to ask you, what’s some of the more unusual requests that you had when it comes to ensuring some of these investment properties?

    Beth Boisseau-Coots (11:54)
    my gosh.

    Well, I mean, there’s been some weird ones, that’s for sure.

    trying to think of just one of the weirdest, was, threw me for a loop there. Well, one of the weirdest scenarios, so one of the things that I do along with real estate investors and it’s actually kind of the other side of the coin and it’s a similar program in a lot of cases is called forced place insurance.

    Dylan Silver (12:07)
    Or a scenario. Yeah, something that couldn’t be plausible.

    you ⁓

    Beth Boisseau-Coots (12:26)
    So if you don’t know what forced place insurance is, it’s when a lender has a borrower that doesn’t keep the insurance on their property and they have to force insurance to cover their interest in the loan, what they’ve lent on that property. Okay, so that’s something I do as well. Well, I had a call from an attorney a few years back and they were looking to get forced place insurance on a property.

    Dylan Silver (12:27)
    Sorry about that.

    Beth Boisseau-Coots (12:56)
    that they had foreclosed on because that’s the other part of it. a bank forecloses on a property, they would force place and then that would add the general liability as well. Well, he was looking for this insurance coverage because he had just taken back this property and the deed wasn’t taken, changed over yet and whatnot. Well, the reason he needed it is because there was a director of a nonprofit and he was stealing from the nonprofit.

    Right? And the reason he was stealing from the nonprofit is because his home had gone into foreclosure because he was also a gambler. And so he used the money he stole from the nonprofit to go to the auction and buy back his house. as when all of this came to the light, the nonprofits insurance company

    Dylan Silver (13:38)
    goodness.

    Beth Boisseau-Coots (13:55)
    I guess they had gone, he went to jail and then they of course took the house and then they were subrogating through, know, anyway, so they needed through all of this to get forced placed insurance on this property because this guy, Anyway.

    Dylan Silver (14:10)
    Wow, who ended up but who

    you know who ended up owning that property that they did the insurance company on the phone in that property.

    Beth Boisseau-Coots (14:17)
    They did and then, no, no, I’m sorry. It eventually went back to the nonprofit, I believe. That’s a good question. I think it went back to the nonprofit and they sold it, of course. But you think, ⁓ the TangleWebWeWeave, know? Yeah, things like that. That’s, yeah.

    Dylan Silver (14:26)
    my gosh.

    That is a crazy story.

    Have you had anybody

    come to you asking for something like super granular about a property like, can this be insured or hey, there’s this super about whatever it is on the property that may be unique that could potentially be destroyed. Is that a request that happens from time to time?

    Beth Boisseau-Coots (15:35)
    Not the weirdest thing or the most I guess outrageous thing I was asked to cover was a I don’t know who they were but they were building a compound. It was an artist a famous artist. He was building a compound in a very nice ski area in Colorado and it was going to be 34 million dollar compound and they needed insurance for that and that’s really

    kind of outside of, but because I have access to a lot of specialty excess and surplus lines carriers, they thought I could help, but nobody would do it because of the fire at risk. So, and because the amount of coverage that they were asking for was so extreme.

    Dylan Silver (16:21)
    ski compound in Colorado but the fire these things

    Beth Boisseau-Coots (16:24)
    no, it was a family

    compound. It was for his family. It was going to be a personal home, $34 million near ⁓ Aspen, Colorado. And I don’t know if it ever was completed or what, but you know, when people, say sometimes you’ll get, you know, investors, they need builders risk coverage because they have decided to, you know, do some extreme rehab on a property that’s just terrible.

    Dylan Silver (16:30)
    getting it.

    Beth Boisseau-Coots (16:53)
    but they’ve already begun the project. Well, no, I’m sorry. You know, we can’t give you insurance on something you’ve already started because you’ve already started it and nobody’s going to do that. So things like that, you know, come up, but.

    Dylan Silver (17:02)
    Yeah.

    Pivoting a bit here, Beth, I would like to ask you about aspiring investors or people who may just be getting into the space. I’ve heard so many folks on this show, outside of the show, talk about how investors can get started. And one of the things that I’ve heard ⁓ time and time again, and I’m personally interested in it, is this idea of house hacking, not just house hacking, but being able to use a duplex, triplex, quadplex, those other doors really as income. Many people aren’t aware that you can do this, but…

    you can have that second door, a certain percentage of it based off the appraisal, that rent can be added to your income. But then of course, one of the concerns when it comes to that is, okay, well, now that there’s gonna be a tenant in there potentially, is this gonna maybe increase the cost of my insurance? And then as well, do I need different types of insurance? Because there’s gonna be a tenant in there. If someone is house hacking specifically, let’s say they have a duplex somewhere in Texas.

    Is there a different type of insurance that they would need than standard like homeowners insurance?

    Beth Boisseau-Coots (18:11)
    There are carriers that will allow for, well, we know that it’s owner occupied on side A and then side B is occupied by a tenant. And so they’ll cover it specifically with that aspect of things. So yes, I would say though, from an investor standpoint, if an investor or if somebody decides to become an investor with whether they’re doing rehabs,

    or rentals or a mix of both, start investigating, how am I going to protect my investment? What’s the best way to do it? Am I going to, once I grow to 30 properties, am I going to have 30 individual insurance policies and with all different renewal dates with maybe various carriers? Or am I going to be a little bit more strategic? What are the options?

    And get educated. What’s the difference between a special form policy and a basic form policy? What’s the difference between replacement cost, actual cash value? At the core of it, ask themselves, what’s my risk tolerance? Am I willing to self-insure more? Or do I want to pay higher premiums and self-insure less and have the insurance company cover more of the claim? Take this seriously enough to

    get a basic understanding and find an insurance professional who understands your business and can, you can consult with and they can guide you through the process and develop a plan.

    Dylan Silver (19:51)
    One of the

    one of one of the questions that I have really somewhat selfishly because I’m curious what what happens when there is you know, massive tenant damage tenants hopefully are not going to damage, you know, the roof but they could certainly damage, you know, the plumbing they could certainly damage, you know, fixtures and they can be it could potentially be you know, upwards of $10,000 worth of damage that a tenant could do to a home. Is that ever going to be covered by some type of

    insurance policy if it’s not like structural damage to the home.

    Beth Boisseau-Coots (20:23)
    Possibly, it depends on the policy. Many of the policies that we write will cover vandalism and malicious mischief. And that would then speak to any tenant damage. And I would say that it’s very important for landlords to make sure, or property managers to make sure their policy has that coverage included.

    Dylan Silver (20:50)
    Yeah,

    I mean, it’s it’s critical because, you know, I’ve seen this happen more than, you know, dozens of times where you have a landlord who becomes a tired landlord because, you know, there’s the stress in the property caused by a tenant and they they’re like, hey, I don’t have the, you know, however many thousands of dollars is needed to to get this up to speed right now for a new tenant. They destroyed the place. Well, if you’ve got some type of insurance like that in place,

    That is huge. It might be probably costly, it’s gonna save you from having to get out of the game entirely or just have it sit vacant and you’re incurring holding costs.

    Beth Boisseau-Coots (21:23)
    yeah.

    You know, honestly, Dylan, it’s not that much more expensive. And oftentimes it’s in a special form master policy, it’s going to usually be included. ⁓ Individual landlord policies or builders risk, maybe, maybe not, but it is important to know. But when I see it, doesn’t really add a whole lot to the cost. The other thing I would say, and I would strongly, strongly encourage is landlords,

    make sure your tenants have a renter’s insurance policy, which is an HO4. Because if they do damage to your property that you own, that renter’s policy is going to cover up to $100,000 of the damage so that you don’t even have to make the claim, which keeps your claims history clean and thus over time reduces your overall insurance costs.

    Dylan Silver (22:27)
    Do you help folks with that as well? If someone has a tenant, could the tenant come to you to get renter’s insurance?

    Beth Boisseau-Coots (22:33)
    No, I don’t do that, but I can refer to people that do. And the other option for that is some landlords will put into place what’s called a tenant legal liability policy. And it’s going to really offer the same coverage. The difference is the named insured is the landlord, not the tenant. And so the tenant can’t just go get the insurance to get into the property and then

    cancel it as soon as they’re in. you know, if it’s a lot of these folks aren’t, you know, the landlords aren’t tracking to make sure the tenant keeps the coverage in place. So tenant legal liability is good too. What?

    Dylan Silver (23:15)
    Yeah, that’s a huge issue. That’s what I’m

    thinking. It’s like, well, they could have it when they sign up and then, you know, a month, two months later down the line, they get canceled. Now they’re uncovered. This is a whole other area of conversation because I can tell you, Beth, and I’m sure you’ve seen it as well. There’s so many issues with people becoming, you know, tired or distressed landlords because of a tenant that, you know, doesn’t take care of the place. And now what do they do? But we are actually coming up on time here.

    any new projects that you’re working on and then also what’s the best way for folks to get in contact with you or your team.

    Beth Boisseau-Coots (23:51)
    Well, okay, so first part of that new projects, really we’re scaling up, we’re trying to increase our, we’ve got a wonderful portal that our clients use to manage the insurance on multiple properties. so we’re, and we’ve had that for some time, but technology just keeps on getting better and better. So we’re really scaling up in that way, which is exciting. ⁓ We’re also increasing our staff.

    because you’re only as good as your customer service. And just always looking to bring on new ⁓ and more carriers that offer these types of programs so that we can stay at the top of the game. As far as contact, my contact information, my email, we also have a website which is www.lloyd-ins.com.

    I can be reached either way, either through the website or through email.

    Dylan Silver (24:55)
    Beth, thank you so much for coming on the show today. Thank you for taking the time.

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