How to Protect Your Real Estate Assets (Before It’s Too Late)

In this episode of the Tax Smart REI Podcast, Thomas Castelli and Nate Sosa sit down with Michael Fried, Vice President at Strategic Claim Consultants, to break down how investors can properly protect their assets and avoid costly insurance mistakes.

Michael has managed over $1 billion in insurance claims, and what he shares in this episode could save you hundreds of thousands (or more).

Meet Michael Fried

Michael Fried started his career working for insurance companies before transitioning into a consumer advocate role after Hurricane Ike in 2008.

Since then, he’s worked extensively with real estate investors, especially those with large multifamily portfolios, helping them navigate complex insurance claims and recover what they’re truly owed.

What Does a Public Adjuster Actually Do?

A public adjuster works on your behalf, not the insurance company’s.

Michael explains it like this:

Hiring a public adjuster is like hiring a CPA to do your taxes. The IRS can do your taxes for you… but it won’t end well.

Insurance companies are businesses. Their goal is to minimize payouts, often through:

• Delays
• Disputes
• Denials

A public adjuster ensures:

• Your claim is properly documented
• You receive the full amount you’re entitled to
• The process moves efficiently

Why Insurance Claims Are Often Underpaid

One of the biggest insights from this episode: Insurance companies profit from delay.

Funds for your claim sit in reserve accounts earning interest. The longer they hold onto that money, the more profitable it is for them.

This creates a system where:

• Claims are intentionally slowed down
• Investors feel pressure to accept less
• Payouts are often reduced

When Should You Hire a Public Adjuster?

Most investors get this wrong.

Best time to hire one:
Before you even call your insurance company.

Why?

• It prevents mistakes early in the process
• Avoids costly delays
• Keeps your claim on the right track from day one

Waiting can cost you:

• Months of time
• Higher fees (up to 20–25% on new money recovered)
• A weaker claim position

The Biggest Mistakes Real Estate Investors Make

1. Choosing Price Over Coverage

Many investors reduce premiums by cutting coverage, especially:

• Loss of rents
• Business interruption insurance

2. Not Insuring to Replacement Value

Rebuild costs are often much higher than purchase price, especially today.

3. Underestimating Risk

Tenants don’t treat properties like owners do, which increases:

• Fire risk
• Water damage
• General wear and tear

The Most Overlooked Coverage: Loss of Rents

This is one of the biggest gaps Michael sees.

Example:

• Building insured for $750,000
• Only $75,000 in loss-of-rent coverage

If a fire knocks out units for 12 months:
That coverage runs out quickly, and you’re left covering the rest.

Short-Term Rental Risks (Airbnb, VRBO)

Short-term rentals come with unique risks:

• Guest-caused fires
• Water damage
• Improper use of appliances

One key takeaway:

Check the box for additional platform coverage (like Airbnb protection)
It can cover excess losses beyond your primary policy.

Multifamily & Commercial Property Risks

For larger assets, common issues include:

• Underinsured buildings
• Per-building coverage gaps
• Low business interruption limits

Michael emphasizes: You need to insure based on true replacement cost, not what you paid.