BEN GILLILAND & FUTURE PROOF: AI BLUEPRINT FOR CLIMATE RISK MITIGATION & PROPERTY HARDENING

E112 BEN GILLILAND & FUTURE PROOF_ AI BLUEPRINT FOR CLIMATE RISK MITIGATION & PROPERTY HARDENING

Transcript

Dalton Anderson (00:00.699) Welcome to Venture Step podcast, where we discuss entrepreneurship, industry trends, and the occasional book review. The traditional insurance model is broken because it's built on a conflict of interests. Stock-owned insurers are beholden to quarterly dividends, which is why they have a high risk zone fleeing of these high risk zones. And it gets tough when majority of those homeowners in those catastrophic prone areas are holding the bag or

have a placement with an insurer of last resort. And this is a huge problem in catastrophic prone areas. We need to go back to the model, a concept of mutuality where the goal isn't just pricing the risk, but to reduce the risk for the benefit of everyone in the pool, both the insurance company and the insured. Today we have Ben Gilman, the chairman of Future Proof and

founder of Future Proof and property intelligence. Ben has a wild background. He has been through a whole nine yards, but we're really here to talk about Future Proof. But there was some other key cool things he'd worked on. He has a good background in construction, a background in tech startups and treasure hunting in the Key West. And the list goes on, but

the last 10 or so years, Ben has spent his majority of his time for a nonprofit with pushing forward this initiative on providing the right information to insurance companies and insurers to reduce the risk and to allow not only an insurance company to move into these cashflow areas, but also banks and insurers to feel comfortable. Ben, welcome to the show.

Ben Gilliland (01:54.926) Hey, thanks a lot, Dalton. Appreciate it.

Dalton Anderson (01:59.173) So today's agenda, we're just gonna provide a background about the situation within the insurance market with these catastrophic prone risks and talk about different levers that people are trying to pull. And then we're gonna be talking about what Ben's initiatives are with Future Proof and then his prior initiative that was the nonprofit Hawaiian based company to create, I think the foundations for Future Proof.

And then we're going to dive in to some different concepts and product offerings of Future Proof and the cool technology that they're working on. Some of this quite neat.

Okay, Ben, this is a cool topic because I am actually pretty good at insurance. So this is something where I'm completely dialed in and it's just a weird concept. So I think there's a couple things and I'll talk about high level and then I want you to drive in a little bit more detail. High level. I think there's a couple things in play. One, insurance companies are beholden to one, their stockholders, the board and

Ben Gilliland (02:59.256) Sure.

Ben Gilliland (03:08.078) Absolutely.

Dalton Anderson (03:10.075) the reinsurance market. So some insurance companies are big enough. like high, I would say I was going to say of high nobility or a, yeah, yeah. Like State Farm and the example of high publicity was when State Farm left the California market. But there's also the other end of the spectrum where states have to

Ben Gilliland (03:23.427) Hi, er.

Dalton Anderson (03:39.676) have an openness to collaborate with these insurance companies with a hardened market. But then there's also gotta be a tug and pull between these both parties. And typically one side, and we've seen this before in politics, one side is really far away from the other side and the other side is not budgeting either. So it winds up being one of these.

Ben Gilliland (04:00.558) Well, they're heavily regulated at the state level. You know, you've got every state that's got its own little, you know, piccadilloes that they want, you know, this for our particular constituents, because at the end of the day, politics is local. And insurance is something that's pretty close to the heart for a lot of these people, because it's this we've we've built a system that is so interconnected that when you start talking about the insurance market itself.

Dalton Anderson (04:04.048) Agreed.

Ben Gilliland (04:30.702) If you have a mortgage, which 62 % of the people in the country do, you got to have insurance. You have no insurance, then you're in default. You're in default and you basically have a piece of property that can no longer be sold on the market in terms of finance. And if you're going to pay cash for a house, it's not likely you're going to go put your cash into a home that you can't insure. And it's now in a danger zone, which we have 37 million

homes that are now at extreme risk. That's $22 trillion worth of real estate. So if you think about what the risk could be for only 10 % loss of that over the course of 20 years, you're talking about $2.2 trillion in losses. And if you have 62 % of that that's insured or rather mortgaged, now you start talking about a cascading economic crisis.

that ultimately lands right back with the politicians because most of those mortgages are sold to Freddie and Fannie Mae. And it means that if they go into default, now it's going to be a taxpayer's burden. So, you know, this is where we're advocating to do something now as opposed to wait until it goes critical.

Dalton Anderson (05:45.307) Agreed.

Dalton Anderson (05:52.028) The whole situation is profound how intertwined everything is. It's a situation of the emperor has no clothes type of like, it's going to be a wide, a wide, a wide gasp moment when you realize that everything that we were thinking was true is wrong. But then there's, there's people that just openly ignore it. Like companies were just

Ben Gilliland (06:00.285) yeah, yeah, absolutely.

Dalton Anderson (06:16.633) we gloss over it and it's not necessarily something that's actively pursued because there isn't an incentive to do anything. Like there's no incentive for the property manager or the risk manager on the portfolio side or owner side. When you're talking about sophisticated investors, when you thinking about doing an investment, do you buy a new property or do you risk harden the properties in your portfolio? Like what produced more revenue?

Ben Gilliland (06:22.734) That's right.

Dalton Anderson (06:43.415) And then there is not enough incentive if you were to make changes because some of these things don't have, I would say historical data to back up. Okay, Ben made these updates and it's by XYZ thing and it's innovative and it, it reduces risk, but we don't have 10 years of results on this. So well, actually appreciate it, but we're not going to be taking any discounts over here. So you're,

Ben Gilliland (07:06.424) That's the problem.

Ben Gilliland (07:11.639) Mm-hmm.

Dalton Anderson (07:11.833) all this money you just spent is worthless. And so there's that situation too. And I think another part that we haven't touched on was the financial part where you talked about how there's all this risk, all these real estate value is at risk, but the real estate market doesn't necessarily want to fully admit that necessarily because then they've already developed the land and they've already had the buildings and there was something apparent. I'm from Florida and

there's a lot of development works that were built on like not grasslands. Yeah, sinkholes or, or what is it? Now I'm blanking on, the, on the show, but Swampland, there we go. Swampland. And so like 20 years later, 15 years later, their house is sinking and it's like, okay, well no one really made it clear that this was on Swampland and, now my house is, is not in stable land. And now it's like worthless.

Ben Gilliland (07:44.462) sinkholes.

Ben Gilliland (07:54.35) There you go.

Dalton Anderson (08:09.198) I can't sell it, I can't leave.

Ben Gilliland (08:09.742) Well, have that same phenomena having been in contracting now actually for 25 years. Developers, it's kind of like they try to have to squeeze every little penny out of their development because they're not really working on gigantic margins. But you know, they're handsome, but they're still, you know, everybody would like to make a little bit more. So when you get into these highly desirable coastal areas or like Florida,

for that fact, which a lot of it's basically unstable land or it's fill as you start talking about with the coastal regions, you know, it used to be wetland and now it's just basically been filled and they go out and they build on it. And the metaphor that I always used with contractors and developers both for that fact is that if a shingle to be a disaster or weather resistant in one of these high risk areas needs seven

nails in it, they'll put five. They only save $87, but the five nails is what winds up in the shingle. And that shingles the one that winds up blowing off the house when even like a Cat 1 or a Cat 2 hurricane comes through. So, you you've got properties also that we didn't even really start putting anything heavy in with building codes until the seventies. It used to be that you didn't even have to strap your roof on.

nor did the actual walls have to be tied down to the concrete slab with anything more than nails. I mean, we've gone into some remodels to make them climate stable, and we'll literally cut the sheetrock back and we'll find where they just drove nails into the concrete to anchor the wall, you know, and this, as far's the roof's concerned, it's kind of a nail every couple of feet, you know. They discounted on the fact that there's weight, you know, and there's, and at the time that was fine.

I mean, know, 75 years ago, we were still using lumber that was a two inch by four inch piece of lumber. Now, depending on what day of the week it is, it's kind of fudged. It's somewhere in there like maybe an inch and a half by three. You know, it just kind of depends on who you're buying it from and where it came from and stuff. But I have never gone into a house that the original owner had the plans that it was built from.

Ben Gilliland (10:36.042) and found that it was really built exactly to that plan. It was always, you know, this is kind of, you know, modified here and modified there. So when you have the insurance industry that's having to ensure average property ages now are 60 years old. So all that technology is just dated for the kind of climate events that we're going into now. And, you know, we work with IBM Client Intelligence.

So we've got these forecasting models that go out to the year 2100, which we use those in our little educational app that call Magic Window that allows you to take your address and see what your risks are for the top seven deadly disasters. And it allows you to go forward and backward in time. You can go back 75 years, see what your house looked like in 1950, which is kind of interesting.

Dalton Anderson (11:30.319) Mm-hmm.

Ben Gilliland (11:32.814) In certain cases, we've found certain places that you couldn't build on because it was swampland, 75 years ago. But then you go forward in time, which is what we're worried with right now. Because with those 37 million homes that are at risk and the economics that goes along with it, there's really not a whole lot of options or what you can do. And when we started this project with the

remediation and AI and stuff that we've built into it now. You know, we're looking at a situation that of those homes that are out there, you've got maybe 80 % of them that could be remediated or what we call harden those homes, remodeled basic is what it boils down to in order to understand what the issues are that need to be done to correct it.

you know, in different places in different parts of the country. In California, you've got a lot of fire risk. Colorado, you have hail. Florida, you've got foundational and wind. I think those are probably really the biggest and storm surge that if you're in that close to the coastal areas. And so all of those particular factors, when you roll them together, the insurance company is looking at an old house. They don't really know what the house is that's on the property.

And just to kind of digress for a second on that, these are, if your audience understands that what you have is risk pools. So everybody that say is in the state of California is bought their insurance from let's say all state or whoever the insurer in that state is the dominant player. And they're going out there and they're pooling all of those premiums together.

with the anticipation that they're going to be able to just pay a portion of those out on claims and the rest of it's going to be invested and go into other projects, go into the stock market. A lot of development gets financed by insurance companies. So if you go in and you find that there's new 100 development home that's being built, it's very likely there's an insurance company that put some money into that, which was money that came in from the premiums. So when you have too many losses,

Ben Gilliland (13:51.534) Now what you're having to deal with is say, okay, well, everybody's in zip code 90120, no longer can get insurance because that area has too much wildfire risk. So no one gets insurance. Now you may have a house that is would be resistive to that, that would qualify as being a fire resistant house, but you can't get insurance because you're lumped into where all 200 houses in that area are.

So one of the things that we were thought about when we started engineering this is that how do you identify what each home actually is? How do you bring granularity to the insurance underwriter who can say, well, there's 200 houses in this zip code, but these 50 I can actually write.' So now I've got 50 more premiums going into the risk pool. And that was, I guess, one of our big goals was to

educate the insurance companies to what actually sits on the property, which is where, of course, the AI kind of comes into that. And I can kind of expand on that more here in a minute. But when you look at the fact that three years ago, most of these insurance companies were just basically, you know, getting creamed in the sense that their claims were grossly exceeding what the premiums were. And if for the next kind of stage in

We were talking reinsurance that you brought that up earlier. That's where an insurance company buys an insurance policy from another insurance policy, most of which are in Switzerland, I might add that. they're insuring their own portfolios. Well, those guys, they got creamed, you know, with how I think it was, I don't know if it was Helene or the one of the hurricanes before that.

But it's so the reinsurance people, they're not stupid. So they were saying, we got to raise your rates. So when they raise their rates, that goes down downstream to your insurance company. They're basically saying, OK, I'm going to have to go up 40 % on what your premium is. Or where you happen to be is going to be so much of an increase, you're not going to be able to afford to pay it. And so we're not going to write a contract at all. So and that's kind of what we're

Ben Gilliland (16:12.098) we're sitting with right now. And that is that you're either uninsurable because you're grouped lumped into a whole area and they don't really have any idea how to grade that out into insurables and uninsurables. It's just safer from them to just say none of the above. And so they don't do anything. And of course, the reinsurance companies, they keep raising their rates as the climate continues to warm the oceans and

caused these mega storms, which I always tell people that I said, who would have ever thought you were gonna have a hurricane in Asheville, North Carolina? Okay, just doesn't seem really too probable, because it's right there smack in the middle of the mountains. But the Hurricane Helene came right on up there, and they're still trying to rebuild from that. I feel sorry for those people, because they're not getting.

Dalton Anderson (17:05.02) Yeah.

I mean, you made a lot of great points, Ben. I think the main point there was just information asymmetry between where we need to be and where the marketplace is going. When I say the risk marketplace and then there's also the ability to educate the insured on what they need to do to harden their home. I think that's one of the other confusions that people have is like, well, Dalton's company is saying that I can't get insurance from them.

But then it's also not necessarily super clear. There are rules and regulations depending on where you're operating in different marketplaces, if it's admitted or not admitted. Without getting into too much detail, admitted is very regulated, not admitted is less regulated, but there are some less guarantees and normally has less coverage. Yeah. But if you are in that situation and you don't necessarily know

Ben Gilliland (17:58.178) lot less coverage.

Dalton Anderson (18:07.845) "Hey, Dalton said no to covering my home, the home that I've got a 30 year mortgage for, the home that were my family. I want to raise my family. What then?" Like, yeah, where, where, where do you go at that point? And I know that you guys are working on or have a solution that helps educate the insured. And I think that's also an important point because it's like, okay, now we have a problem. Where's the, where's this, where's the direction?

Ben Gilliland (18:19.086) In my neighborhood. Yeah.

Ben Gilliland (18:30.914) We really, yeah, yeah, we do.

Our feeling about it was is that you can't just kind of regurgitate the 1.5 Celsius argument to where people are just, you know, they've just been beaten to death by it. You know, "Oh, the apocalypse is coming. Well, I can't do anything about that. I'm just going to go out in the yard, play with the kids, you know, and so if it hits me, it hits me." And so they really don't have any resources to go to.

Now, California and their wildfire areas is trying to change that, but that is really singularly unique right now. They're probably a couple of years ahead of most everybody else in their thought processes. But what we've discovered was if you're going to present somebody with a problem, you've got to give them a solution or don't bother. Just, I mean there's nothing to be gained. So what we said is you needed a cradle to grave problem.

And we talked to probably 200 insurance people and we've talked to wildfire remediation people. We've talked to tons of folks. We've got Columbia University involved in it now, as well as Teachers College, as well as we're talking to Livermore Labs. You know, just it's becoming this larger grassroots collective of people who all said, "Hey, there's only really a practical way to address this.

And that's to have to remodel these homes that we can. And we've got to be able to tell somebody whether they have a problem and then how to fix it." So when we started working with AI, what we're doing now would be impossible without it. Just you know, the fundamental way that artificial intelligence works is it's able to take huge batches of information and reduce it down to an answer to a question that you ask it. And that's oversimplification.

Ben Gilliland (20:28.418) But in the process of it doing that, we said, okay, the person, first of all, you know, let's say Tom's house up the street blew away in a tornado. That could have been my house. So the first hurdle is for somebody to understand that, it could have been your house and that maybe you need to figure out whether your house would survive if the thing were to happen to you, because it doesn't take a weatherman to quote Bob Dylan to see which way the wind blows.

And all you got to do is look out the window and you know that these storms are getting more severe. You know, They're getting to be more frequent and we really stay out of the climate causality argument. We just say statistically, it's getting worse. Look back five years, look back 10 years, look what it did last year. It's going to get worse, You know, so if that's in fact the case and it's already terrible, which has been pretty much the case for the last few years,

then you need to prepare for that. And of course, the government programs at a federal level have evaporated. So there's not gonna be any white knights rolling in to help you if you get hit. So maybe you should think about whether or not you should be better prepared for it because it's not only your house, but it's also your family that's involved in that. So the educational side of it was to be able to say, okay, type in your address, it's gonna tell you whether you've got a problem.

If you've got a problem now, great, go to the next level. And that's where our what we're building is a pipeline that can be adapted to all the disasters that's going to bring you everything you need to know in one place. So the first thing that is able to do is just walk around your house with your video camera. And it basically records that information. We then combine that with the satellite and the

telemetry from above and we now have a 3D model just like you would have, you know, in playing a video game of what your house is, but it's to scale. So we're now in the video inception partner and what they're bringing to the party, so to speak, is the ability to take that video quickly converted into a wireframe that's to scale and it also can look and tells you what the materials are that your house is made.

Ben Gilliland (22:53.184) So it's gotten that intelligent now. It knows whether it's wood. Totally, totally, totally. It's almost like some of the video memes that are out now that mankind has disappeared and we've all transferred our consciousness into robots, which I hopefully will not live long enough to see that one, personally speaking.

Dalton Anderson (22:55.37) It's straight up sci-fi stuff, Complete sci-fi.

Dalton Anderson (23:13.149) At this rate, I think you'll be there in no time.

Ben Gilliland (23:17.43) Well, you I'm also a writer. That was one of my other things. I've written novel science fiction novel stuff. And one of I did a short story about transference of your consciousness for your kids, because this body will eventually deteriorate, you know, and you will pass on. So in this particular case, you know, your mother, when she reaches that end of the road, so to speak, now all of a sudden you have mom has been transferred into your iPhone. So

basically, and with the AI, you can go, "Mom, I have this problem with my boyfriend. Can you give me some advice?" And Mom basically is Mom. All of her aspects are transferred in the phone. But anyway, though, yeah.

Dalton Anderson (23:53.692) Mm.

Dalton Anderson (24:00.21) Just before you get on that, I did have an interview with a guest that has a company that is all about what you're talking about, like uploading your AI version of yourself and eventually getting to like 3D models of you and then eventually getting to consciousness and then selling your AI knowledge.

Ben Gilliland (24:09.422) conscious transference.

Ben Gilliland (24:16.206) Yeah, pretty much Hal 9000 from, you know, or any numerous other science fiction movies that have played on that theme. You know, And of course it has the same implication of what there was the movie that he had fallen in love with his phone and the AI chatbot that was in his phone, which of course is now real life. You know, it's

Dalton Anderson (24:43.111) people that happens have seen stories.

Ben Gilliland (24:45.302) Yes, what is it art life reflecting art and fast vice versa that goes along with it. But anyway, what our pipeline basically is to be able to find out what's sitting on your property, what's it made out of, how can we take it apart in a cyber environment to determine what we need to change. And it spits out a set of plans, a set of budgets that goes with it and also a financing plan to where

Dalton Anderson (24:50.525) Mm.

Ben Gilliland (25:13.774) because this is one of the things we're getting out of. The United Nations has a DRR program that we've been following real closely, which is for disaster recovery and remediation, which basically says we can issue mitigation bonds, which are just like mortgage backed securities, but we can do those super cheap. They're also known as green bonds that would allow you to blend if, let's say the state will give you 10 grand.

against your $20,000 remediation, then this will pick up the other 10,000 at like super, super low interest rates that go along with that. The idea is you got to know what it is. You got to know what your problem is. Here's the fix. Here's how to pay for it.

Dalton Anderson (26:01.265) Let's just overview that real quick then, because we got off track and we got back on track, but there's a lot going on when the first thing you really touched on was curiosity or getting the person curious about the health of their home when it comes to catastrophic risk. And then having a way for you to go down that path and follow your curiosity by typing in your address. And then if you do have a problem, then it's a funnel of curiosity, I'll call it.

Ben Gilliland (26:06.702) Sure. Yeah.

Ben Gilliland (26:29.39) Correct.

Dalton Anderson (26:30.295) of mediation with the end goal of mediation, but in mitigation. The next step would be, okay, if you do have a problem, keep pulling on that curiosity thread, download the app, video your home, and then from the satellite imagery and geospatial information you have on the home on the outside and the video on the inside and your partnership with Nvidia, you make a 3D rendering to scale

with high accuracy. think the accuracy that was quoted was like absurd, up to like, it's like crazy. Yeah. Yeah. Like, I mean, who's sweating quarter inches? Like you're not a skyscraper. It doesn't really matter if it's a, you know, it's so there's this, this insane process. And then that 3d model and that quarter of an inch accuracy, like, you know, error deviation then is then transformed.

Ben Gilliland (27:05.805) quarter of an inch.

Ben Gilliland (27:12.46) No.

Dalton Anderson (27:29.501) and you're given a blueprint of how you could change or alter your home to harden against the increased catastrophic risk. And then on top of that, I think you have the option to buy a blueprint and or you can.

Ben Gilliland (27:49.186) Yeah, you can buy the prints or you can punch a button and it'll hook you into a contractor network that we're building as well of people who already have can walk out with their iPad and say, this is how much it's going to cost. You already knew this because we tell you that on the front end. You you don't you buy the plans if you're going to DIY it yourself. If you're planning on having the work done, then the contractor is going to come out, give you the price. You can sign on the iPad.

it's already paid for because he's going to collect the money from the state for a portion of it and the other part from the green bond fund So now, you you get now you just get it scheduled to get the work done because once this is done to we recertify your house with the insurance company. So if let's say you had a six score for wildfire risk and you do these things, you may now qualify to be able to make it a three.

So now you can get, we've seen discounts up to 50%. But the thing I think that's even more important other than the discount from the insurance company, and I'm not saying of course that's, you know, pocket change, but at the same time, in these risk areas, the border realtors just came out about a month or so ago. And these areas are losing value. They're depreciating at about 1.2 % year over year.

Now, if you're buying a house as your piggy bank, that you're looking for the appreciation on that value for the kid's education or your retirement, it's a losing investment. You're losing a point a year. Every 10 years, you've lost 12 % of what your valuation is on your house versus it going up, hopefully, 12, 20, 25%. So, you know, it's a losing investment. Now, that having been said,

why do you want to go and buy a house in one of these areas if you decide to sell it? This is where the real estate agents people had Zwillow pull all the risk ratings off of their listings. That was in the front page of the Times and CNN about two months ago. They were saying, well, they're just not totally accurate. And of course, sales are down 4.5%. So probably if sales were up 4.5%, they'd be going, yeehaw.

Ben Gilliland (30:12.482) But in this particular case, they saw it as a detriment to sales. And it probably does, because if you're thinking about it, if I have a choice to go buy a house that's not in a risk area versus this and maybe, OK, I can't be on the beach or across the street from the beach. I got to be like a 10 minute drive from the beach. I'm going to go for the 10 minute drive because your house is your biggest investment you'll probably ever make, at least it is for most people.

And as a result of that situation, why are you going to go buy there? Now, here's the flip side. And this was in the same study that was done. And that is if you, in fact, do this work on your house, those houses are selling for more than 6 to 8 % premium over appraisal. So to put the money into your house, you're looking at an immediate gain of 6 to 8%.

Dalton Anderson (31:05.03) Hmm.

Ben Gilliland (31:12.95) of the value of the house. And now you've also cut off that depreciation of, you know, of a point plus over the course of each year. So you can now stay near the beach and consequently have your insurance, have a better price on your insurance. Valuation of your house has gone up when you finished the construction, which we would recertify. And at the same time, you're not being hit by the depreciation like Tom up the street's going to get because he hasn't done that work to his house.

So the idea is that this thing scales into an easy to use system that you're going, I've got a risk. I need to go use that Future Proof app and see whether or not what I need to do about this. Because whether or not you want to have to deal with this, you're going to have to deal with it. It's common. I tell people that sometimes, some days when things are going well, I feel like Paul Revere,

You know, and I'm saying the redcoats are coming and everybody's racing out the door with their muskets, you know, and they're going, well, we're going to get something done about this, you know. And then I have other days I feel more like John the Baptist. I'm going to see my head on a plate, you know, as far as that's concerned. So because, you know, the field is so flooded with with noise, you know, right now it's really kind of hard to break through that, which we're getting good traction with people such as yourself because we're trying to spread the word.

Dalton Anderson (32:23.07) You

Ben Gilliland (32:38.936) that this is not a hoax. This is a real thing. I'm not gonna get into whether or not it's, let's just put it this way, mother nature is not happy. The ocean is getting warmer and whoever wants to get into that argument, that's fine. I'm trying to help people. I'm trying to provide a tool that is gonna hopefully stem a major economic crisis that over the next 20 years with the information we have through IBM is gonna get a

Dalton Anderson (32:48.03) Mm-hmm.

Ben Gilliland (33:08.558) whole lot worse. In fact, it's kind of interesting. We were trying to determine what are the top two worst places to buy a house in the United States? And since we had the data, you know, we play with this stuff all the time, you know, it's going to who's going to get burned up, you who's going to get this, you know, and the in this case, it was all all disasters rolled into one. Where's the worst place? And you probably if you want to take a guess.

Dalton Anderson (33:20.306) Can I guess?

Ben Gilliland (33:38.094) I'll give you a hint. It's on the West Coast. Yeah. Yeah. Well, that's the state. The city, though, Riverside. Riverside, California has got it all. We got drought. We got mudslides. We got floods. We got wildfire. We got seismic. It's got every it's got them all. All seven. Hawaii. No, well, we have the thing we have that's going to sea level rise. We're going to see a three to three and a half foot sea level rise.

Dalton Anderson (33:41.554) California?

Dalton Anderson (33:46.995) Riverside.

Dalton Anderson (33:52.788) Why he wasn't on there?

No, but Hawaii, though, isn't isn't Hawaii up there?

Ben Gilliland (34:07.202) between now and 2050. And of course, we're very heavily in how we say invested in beaches and Mai Tais and sunburns. So as a result of those being our industry, a lot of these places around the coastal areas are going to be at, you you've got three and a half feet that's coming up to the door and that's at slack tide. So you start talking about a full moon and you have king tide and you have storm surge.

All those wonderful things that Floridians are intimately familiar with, you know, that's our biggie. Now I live on the big island, so I have a volcano that's a hundred miles to my south. And my house is actually built on an active volcano. We've, the first house that the nonprofit built, which was fire resistant, seismic stable, equivalent to the San Francisco earthquake, and also 150 mile an hour wind for hurricanes.

It's actually carved into the side of an active volcano at 1300 feet. I am sitting in that house right now.

Dalton Anderson (35:08.882) Wait, you're gonna act like you're carved in the side and it's act, that sounds so cool by the way.

Ben Gilliland (35:16.87) It's a cycle, it's eruption cycles 137 years and it erupted 106 years ago. So if you want to take that average, that would say 30 years, you know, I'm 73. I could be around as possible, you know, whether I'm in this house or not, it's another matter, but yeah, it is pretty cool to do. And of course, you know, everybody comes here is going, hey, I got to go down to the volcano. You know, I was going.

Dalton Anderson (35:26.344) So it's getting there.

Ben Gilliland (35:45.386) Yeah, for us, it's kind of like, volcano's going off again. Okay. But it's gone into a weird cycle in the last couple of years. It's like it erupts for eight to 10 hours and we get these 1300 foot fountains of hot lava. And yeah, it's pretty wild looking at night. We go down at night, of course. That was that's the time you want to really watch it anyway, though. And then it quits for like two, three weeks.

Dalton Anderson (36:06.783) Check it out.

Ben Gilliland (36:13.74) And then it turns itself back on. you know, it's The volcano's name is Pele. And she get everybody says, well, Pele's upset, you know, so she's, you know, she's blowing off hot lava. But in fact, this last eruption, it threw out air blown volcanic glass and it rained on the south end of the island. These pieces of volcanic glass.

Dalton Anderson (36:36.287) Mmm.

Ben Gilliland (36:43.074) that are, they weigh nothing. You they won't even dent the paint in your car. But when you see it raining this stuff down, it's still a little disconcerting, which is not one of our seven disasters that we deal with at Future Proof. We consider that one to be a very containable disaster. Don't go near the volcano. You know, it's mitigation, I the breathing in parts, you know, that's not good, it's nitric acid. It's not good, bad stuff.

Dalton Anderson (37:04.146) And probably don't breathe it in, that's probably not good either.

Dalton Anderson (37:09.075) That's probably, that's probably death.

You touched on a couple things earlier. One I thought that was important, want to just overview was the ability for the insured to explore and then the reduction of drag. I think is important, right? Like you talked about the whole platform and how everything is integrated, Ben and then

Ben Gilliland (37:20.515) Yeah.

Dalton Anderson (37:40.038) I really talk about on the show following your passion and you when you're passionate about something you're you're all in for X number of days. But as soon as you a roadblock and you're stalled for five days, two weeks, you're really passionate about the platform and figuring out what's going on in your home. And then you type in your address, you download the app, you do the scan, but then it doesn't have the blueprints. And so you've got to do a third party validation. Maybe it takes a couple of weeks.

and then you've got to figure out a contractor and you're having trouble getting schedules, people cancel on you. And then before you know it, it's four months and you're starting to do some traveling and you're not around as much. You've got to catch up on life. And before you know it, you don't do anything with it. And two years go by and you're like, I really need to circle back on that. But when you have it all integrated,

Ben Gilliland (38:26.872) Yeah, that stuff costs money too. I mean, you have to get a home inspector out. Let's just say that's $500. Now you're going to have to have if he determines that you have these problems. Now you're going to have to get an engineer out there. Now the engineer is going to cost you several thousand dollars to come up with a plan. Now he's going to charge you to draw the plan. Now you got to find a contractor and you've got to get a set of blueprints drawn. Now you're going to have to pull your permits.

You know, and so when you add up that front end cost, you could be into 10 grand in a heartbeat. And so what we're saying is we can with the AI, we can collapse all of that into one automated flow. And you're into a situation where it's in the hundreds of dollars, not the thousands of dollars. A DIY plan set from us. Well, another thing, too, is we've done a lot of white papers and studies on this, but

If you look at those 37 million homes that are out there, the average cost to be able to remediate runs between 20 and $40,000. That's the average range to be able to harden your house. You know, That's a lot of money, but it's not, like you're building another house. And in this particular case, if we have to spend 10,000 of that, those dollars in order to be able to know what to fix,

Now it's a $50,000 proposition. So in this case also, if you want to do it yourself, you could buy, we basically are trying to get a network together with people like Home Depot and Lowe's and Menard's to where, if you in fact want to do this work yourself, which is totally acceptable to do it, and you can do that in a lot of jurisdictions without a permit. And of course, you have to know what.

exactly is going on, some things required. That's where the contractor is really the better way to go. let's say you're going to do it yourself. those. Yeah, no, I do. I mean, it is it is is one of those things that always hire a professional. I mean, if you want to if you have a tumor in your brain, you're really going to go and hire a plumber. OK, you know, and that's not the down on plumbers either. mean, you know.

Dalton Anderson (40:27.005) Says the guy with the GC license. Small plug.

Ben Gilliland (40:47.062) I tell people that there's two occupations that I have great respect for because I can't do it. know, One of them is working on your car. If you don't want your car to ever run again, have me work on it. You know, and then the same thing applies to plumbing. You know, these guys, mean, you know, I just, I have two friends that are really good plumbers and one of them is married to a niece of mine. And I tell him, I said, you know, what you guys do is a black art.

It's kind of like something straight out of Shakespeare and the three witches in the mountain and the cauldron. He was going, yeah, I know that's why it takes 10 years to become a master plumber. It's not as easy as it looks that you're going to go fix the flapper in your toilet as far as that goes.

Dalton Anderson (41:31.391) Yeah, that's that's like normal plumbing stuff. My By the way, just for your knowledge, my father also has GC license in Florida and would help him on the job site. And I was reminded about the story that you're talking about with plumbing. This is definitely a sidebar, by the way, was that a plumber came in and they put this clamp on this on this water line and they froze it with nitrogen, liquid nitrogen. And then they cut the pipe open and they're like, we've got we've got 35 minutes until this this

Ben Gilliland (41:39.832) okay. Yeah.

Dalton Anderson (42:00.693) this water line because it was like part of the city and they can't close it down. So I've got to freeze it, cut the pipe, change the molding of the of the the piping to fit the new architecture or whatever they're doing. Yeah. And and then and then also get it to work and then weld it back together. All that. And they had to do some pipe bending and other stuff. And it's like, there's a lot like there's a

Ben Gilliland (42:04.867) Yeah.

Ben Gilliland (42:13.966) the new standards and stuff. Yeah, yeah, yeah, yeah.

Ben Gilliland (42:25.601) ambitious.

Ben Gilliland (42:30.368) I see how you can get that many people in a hole to do that. You know, that sounds like a lot of different talents that are all going to have to touch it. But, yeah, now we had, I was not directly involved in it other than it was happening in my building at the time. And that was when Federal Express was early on. They had taken over three floors in a high-rise building and it was all hard drives.

Dalton Anderson (42:30.474) There's a lot going on.

Ben Gilliland (42:58.19) And this is when the hard drive was the size of a washing machine. Okay. And it's just rose and rose and rose and rose. And that was what ran the Cosmos FedEx tracking system at the time. Well, they obviously a high rise building and a high seismic zone, is what it was in. It's not a great idea if the system were to go down. So they built this huge bunker on springs and all this other stuff in order to be able to take the system down.

for like four hours on a Sunday and orchestrate having the whole thing moved out of this with elevators and everything that they had to do, take it apart, move it out about, it was probably 10 miles away and then put it all back together to be online Sunday night for the, the, you know, the planes start to have to fly again. And, well, guy Fred Smith was like, he was, I think he was a colonel in the Marine Corps.

Dalton Anderson (43:47.114) Sounds complex.

Ben Gilliland (43:54.752) So for him, everything was like, now this is gonna happen this way and this team of people are they're gonna rush in there. It was like SEAL Team Six moving your computers and stuff. He had food testers that were checking the food to make sure that none of the techs got bad food. And all of a sudden that that was gonna be a problem. So, it was quite an adventure as a sidebar.

Dalton Anderson (44:20.348) Yeah, no, for sure. And then the other thing, appreciate sharing the story, Ben. The other thing I was going to say is you talked about the appreciation or the lack of appreciation when you are in these areas of high catastrophic risk. And one thing I thought about was just the insurance premiums are just massive in those spaces and there's a lot of uncertainty. And if there's a lot of uncertainty that that

Ben Gilliland (44:37.454) 17 states right now.

Dalton Anderson (44:49.96) affects the speculative value, especially like say, for example, the condo market in Florida, or just a home in Florida or home in California. Those are easy states to pick on because everybody's familiar with what goes on in Florida and what goes on in California. But in the wildfire market in California, it's just like, you could get a great home, but the only reason it's a good price at that time is because, well, it's in a crazy area and you're gonna pay 20 grand a year in insurance.

Ben Gilliland (44:55.213) and

Dalton Anderson (45:19.828) vice versa in Florida. And so there's gotta be this public private partnership and that's kind of what you're initializing with the fundraising and, getting, getting the awareness and then also providing the pipeline for these, not only that, no, I would say the community, like pipeline, pipeline mitigation for the community where it's not just

Ben Gilliland (45:29.976) Mm-hmm.

Ben Gilliland (45:36.29) Yeah, the tools. Yeah.

Ben Gilliland (45:45.442) Well said.

Dalton Anderson (45:45.546) the person looking for the home or curious about their own home. It's also the real estate agents, the politicians, like getting additional awareness on the situation and getting that veracity.

Ben Gilliland (45:56.248) What gives them an answer to a question that they can't answer right now? It's like the real estate agent is like, you know, what's the risk on this property? And they'll basically say, okay, well, we've got the hundred year flood map over here. You're above the hundred year flood plain. Well, those maps were drawn 40 years ago for starters. I mean, you know, so what they're telling you, even if they gave it to in writing, it has little value at this point. A lot of that now is starting to get addressed.

But at the same time, it's just what we see is everybody will basically, there's tons of players that are in the risk market that will tell you what your risk is, you know, and that's from an insurance perspective, okay? But they do not tell you how to go to the next level. And the next level is complicated.

So it gets into, like we said earlier, do you have to have a survey? You need to have some engineers. You have to have a contractor. You're to have to have materials. You got budgets. I mean, it becomes more than your average person will ever have to usually deal with in their lifetime. And so the idea is that if you can basically know that it's like going to a Coke machine, and if I put my credit card and I swipe it,

then I can buy that bottle of water. can buy that, you know, Starbucks, know, Frappuccino or whatever is being dispensed. And that I can get this within a matter of hours, not a matter of weeks, days, months. Because when the contractor basically gets the package, it's the same package that you've got. So you already know about what this is going to cost because we use a company called RS Means, which is what all the contractors use.

And that's if I'm going to go build a house in Cincinnati, I can go to RS Means. And I'm going say it has this many, this is how many, two F words, this is how many hours of labor I've got. And it prices it for you by that zip code. So when you get this estimate, it's already localized to where you live and what these things cost. Now, contractor, he's going to, if you know, what you'll get is a DIY price.

Ben Gilliland (48:17.784) You know, That's how much of the materials, how many man hours, the labor and all that stuff. If you're going to hire a contractor, obviously you're going to have to pay him a, you know, his profit that's associated with it. But you already know what it costs. You already know where you're going in. And then we look at this as what we've we went through weeks of moral hand rigging about whether or not we're getting ready to put a bigger hammer in the insurance company's hands. That was.

That was the dilemma. And how do we address that? And that's where we basically said everybody needs to be on a level playing field. You know what your problems are. You know what it costs to fix them. You know how you can fix them. The insurance company on this side says, "Oh we didn't know that you had that," because they don't know what's on your property. I mean, you know, it's pretty much a lick your finger and put it in the wind. So in this particular case, you know, they now know,

you're asking me to insure your house and it's this and because you may come back and it says it's safe and you can use that same report to say, okay, I want it. Why can't I go ahead and get these discounts, which by the way have had to be approved and are mandated by the insurance commissions. So you go to California. They have to if you do X, they have to offer you in a range what those discounts are going to be.

because that's what their governmental race.

Dalton Anderson (49:45.594) If they know about it though, that's the key thing. If you don't know...

Ben Gilliland (49:49.058) But that's what we tell you about where you get the grant money. We tell you about what the building code situations are. We even run a return on investment that's in our reports. We give you, we figure that knowledge is power and it also levels the playing field. It gives you who, how, where, it answers all the basic questions to where you can make an intelligent decision. Now you may decide, and this is very typical we're seeing in the behavioral side of this.

Columbia University, we've been working with them on the behavioral side of the American house owner, which has been a real adventure. And what comes back is that most people believe that that's not going to happen to me. That'll happen to Tom up the street. That's going to happen to Mary's over in the next neighborhood, but it's not going to hit me. So what you're basically doing is saying, I'm going to push all my chips into the middle of the table.

And I'm going to make a bet that this increasingly worse weather will not hit me. It's not a drag. That's not a smart bet. So how you get around that is to basically say, you know, first of all, if we know what needs to be done and these are things that you can do yourself, then you're better off at least knowing that you can do that. Let's say that a report comes back and says you can do this for $15,000.

but you're also at a lower risk level that you don't have a level of urgency because our forecast for the weather looks out pretty accurately about three years. So now you can say, "Okay, I'm going to do a little bit of this year," and you do it out of your own cashflow. So you get to the same point because you originally knew what you needed to do. You needed whether you had a problem, you know what you needed to do to solve it. And then we give you different scenarios of do it yourself.

You know, discount, we're looking to try to get discount deals done with the retail suppliers like Home Depot to where if you buy your materials from them, it comes off one of our takeoff lists. You're going to get 3 % off of this, 5 % off of that. However, that works out on their end in terms of because they're incented to want to get your business. If you decide you're going to do this yourself and you need $10,000 worth of stuff, then they want that order.

Ben Gilliland (52:17.634) you know, As will the lozies or anybody else's of the world, which goes back to our monetization theories that we feel are going to be necessary in order to pay for this. I mean, this is, you know, this system is kind of caught by the time we get done and it's internationalized, we'll have a hundred million dollars. And if there's a penny in that sense, because we've got other features.

Dalton Anderson (52:21.249) Mm-hmm.

Ben Gilliland (52:46.114) that we're putting in there for the educational side, the video we talked about you shooting, that the one for the inside of the house, the insurance companies will give you a discount if you videotape all your stuff. Again, people don't know about this stuff. Okay, so now your camera, which we're using a guided AI chatbot, this called a ComfortBot, which we found in France.

We go around, we call it string and pearls. We go around looking for all these innovative little things that other people have created and saying that works for our framework. And in this case, the chat bot basically is something that we're looking to be able to put an educational program together that can go into the school for your 10 year old, know, and he's got everything is tablet learning now anyway. And this is very popular in Japan. And that's where, you know, we're going to do

You know, and It'll be gamified to where the kids, you know, basically say, hey, we're going to play a game today. You know, and the chat bot has a very calm, you know, and smooth voice. says, "I think since we're in a tornado zone, little Freddy. Let's go around today and find out where the safest place is if we have to shelter in place. What do you think?" Okay. And it, and it got, does. And then it guides you into doing that.

Dalton Anderson (54:06.805) I think that that's great, Ben.

Ben Gilliland (54:11.446) And we look at that also on the other end of that and the emergency and recovery phase of this, because there's three silos. It's the middle silo that we have to concentrate on now because the clock's running on all these properties. But when you have this data core, now you can go out there and say, while we're doing this emergency survey in our interior of our home, we're also going to photograph the

the flat screen TV and the couch and mama's China cabinet and all those things now give you a record that if you do get hit, you can hand that video over to your insurance company and we're not going to argue about how many trophies were in the case or any of these other issues. And the insurance company doesn't want to argue. One of these metaphors that we went through the other day in one of our meetings was what you have are these two groups of people. You have the homeowner on one side.

who gets his new bill that basically has gone up 50 % and he gets basically pissed off and he's going, "These insurance people, they're nothing but a bunch of crooks and they're da da da da da." Okay, the insurance guy on the other side is going, "I'm losing my butt on this deal. I gotta cut the bleeding off." So what it amounts to is an angry spurned lover and the insurance company is going, "Don't you love me anymore?

We've been together for 12 years." know, And so through this emotional process between these two groups of people, you have a fundamental distrust because homeowners don't understand how it works. You got to have people in the pool. If you don't have enough people in the pool, you can't write policies. That's just how it works. basically, we're all collectively going in that if one of us needs help, it's just like the Amish building a barn.

Okay, we're going to go out there and we're going to help you put your house back together when the tree fell on it because of the big wind that came through. You know, and all those 200 people in your neighborhood chipped in to have that tree taken off of your driveway. You know, And when you look at it that, you know, ensures this to a casino to a degree because you're placing educated bets as to how many people are going to go and pull out of the pot and how many people are going to

Ben Gilliland (56:38.68) pay in and may never have a claim. And of course, there's actuary tables and it's a very sophisticated back office that each insurance company, this is like the black box, like when you get your credit score, that you don't really understand why it was 10 points higher last month than it is this month. But because you're going, I didn't do anything different. But the same thing goes into underwriting. Each one of has their own prerequisites based upon their claims, based upon their zones.

you know, all these things. The thing we found was universal is that they don't know what they're insuring most of the time. If you're insuring somebody's $35 million property, I'm going to send somebody out to look and they're going to write up a report and they're going to take pictures. OK, but I can't do that to 37 million homes. It's just not economically feasible to do it. So by using AI to automate this process, you're cutting 10,000 bucks out of it.

And I have an ongoing debate on LinkedIn with a guy who's a mitigation disaster remediation engineer, You know, and his debate is that the technology is not there to automate the process and that it needs to have people still in the loop. Our perspective is on it is yes, that's where we are now. But with deep learning where we are going,

you're still going to have to these guys to go into commercial properties and the ultra unique stuff. But if I were coming out of engineering school, I think I may consider a different occupation because this is going to be one of the ones that's really going to be affected by AI replacement situations, not in the lawyers.

Dalton Anderson (58:29.681) The speed, the speed of improvement, especially in these technical fields are astounding. I think that there is an echo chamber for technical occupations versus non-technical because non-technical is like, well, I use AI sometimes. It helps me talk about my emotions or talk through something. But then then on these technical fields, it's just like an insane explosion on what is capable versus like what wasn't a thing a year ago. And you're just like

That's insane. Six months ago we couldn't even do that and now we're doing it almost 100 % of the time, accurately. Okay, well then it can't be, we can't do this right now and then it's like one month later a model comes out and it just blows your mind. And that's consistently like month over month over month over month.

Ben Gilliland (59:04.174) Mm-hmm.

Ben Gilliland (59:16.802) Yeah. Well, there's one that blew everybody's mind last night because it got pulled back. It was going to be the new model from Anthropic. Uh-huh. Anyway, though, apparently it's a lot smarter than its builders realized, and it broke out of its sandbox that it was being tested.

Dalton Anderson (59:29.345) clock mythos, I think. Yeah.

Ben Gilliland (59:44.064) and it started running through all of the apps and all the internet web software. And it found thousands of holes that were capable of being exploited by hackers, but it wasn't asked to do that.

Dalton Anderson (01:00:03.426) Yeah, I did read about that. And then, I wanna circle us back over, I mean, that's a great point about just AI in general. It's just the way that things are going right now, I'm not gonna be doom and gloom, but you're gonna need to adjust and collaborate with your AI friends, because they're gonna be way smarter than you are in short amount of time. And then the other part is you made some good points about the relationship between the insured

Ben Gilliland (01:00:03.99) Oops.

Yeah.

Dalton Anderson (01:00:32.298) and the insured, like the insurance company and then the person buying insurance. And I think the fundamental thing is the insured does not trust the insurance company. The insurance company does not trust the insured. So there has got to be an information flow between both parties. And if the insurance company trusts Future Proof and then the insured trust Future Proof for whatever reason, the mutual beneficial

Ben Gilliland (01:00:36.878) Mm-hmm.

Ben Gilliland (01:00:51.329) Exactly.

Dalton Anderson (01:00:59.628) the beneficial relationship between this whole situation, but the information can flow.

Ben Gilliland (01:01:02.668) Yeah, level the playing field. You can level everybody up to where they're working from the same knowledge base, it builds a bridge between these two groups of people. And we kind of look at the contractors as being the deck on that bridge that you walk across, because obviously you do have these two opposing groups that are on either side of the river with insurance and with the homeowner themselves. And if

If both parties are singing from the same hymnal, it becomes a totally different conversation. But right now the homeowner feels that he's on a pressed party because he doesn't know. And ignorance builds a lot of distrust. Whereas the insurance company on their side, they're going, did this guy really have this tree fall in his house? You know, was he playing with matches with the gas and the lawnmower?

You know, and it wasn't really a wildfire. So you, cause you do have bad actors that are in, in both sides of that equation. But again, if everybody gets leveled up to the same spot, now you at least have a place to start a dialogue to say, "Hey, I know what you're trying to do. And you want to help me to have insurance so I can have a mortgage so that I can continue to live in my lovely beach community."

You know, And on the other side of it, you have the situation with the insurance companies going, "We want you in the pool because we do know that eventually we're going to have to pay out to some people, but it would be great if you can make your house better and we'll help you to be able to do that and try to reward you as best we can with premiums or with being able to get underwriting and stuff." Then the relationship takes on one of mutual cooperation,

and less of this headbutting of being at war with each other. And right now that was one of the things we spent a lot of time thinking about, was the war. Because everybody's been at war with their insurance company at one point in time. I've got a claim out right now. I just got hit by a storm. Now my house is rated for 150 mile an hour wind. Here's what I did not compensate for at the time.

Ben Gilliland (01:03:27.692) I've got the P-TAC air conditioners that are at ground level, which I hardly ever use. Well, wind coming through with 37 inches of rain in 24 hours blew straight through the air conditioning unit. Okay? And I've got windows that have got the film on them to where they'll take the impact of a 90 mile an hour two by four. Well, one of them got hit with something. We don't even know what it got hit with.

But it shattered, but it didn't fall out of the hole. I didn't have any water come rushing out. But just to kind of put a perspective on it, this was such a terrible storm. It lasted for three days. we have a water infinity edge waterfall over the front edge of our swimming pool. And it blew the tile off of the front of the waterfall. So we're out there going, "Really?"

Not really sure how they're going to pay on that one. We've been debating that. That's not one of those things that happens every day like pipe burst.

Dalton Anderson (01:04:34.336) Yeah, seems like it might be caught like they could be deemed as cosmetic, you know, it's not, doesn't affect the functionality of the pool, but it definitely affects the look.

Ben Gilliland (01:04:41.592) Probably not. I'm waiting to see how they treat me on that one.

Dalton Anderson (01:04:46.56) It depends on your policy language, but the discussion part, if people wanted to get in contact with you or Future Proof, how would you like them to facilitate that?

Ben Gilliland (01:04:49.335) Obviously.

Ben Gilliland (01:04:59.374) Sure. If somebody's interested in getting involved at our grassroots level, whether or not they want to talk to me, whether it's press, the podcast community, all of the various governmental agencies, folks, I'm very active on LinkedIn. You can reach me there as Ben Gilliland on LinkedIn. And I'm a very frequent poster.

Uh, you know, I've got thousands of people who are starting to come to the party on this. And we're just trying to, like I said, build some grassroots support for what we're doing. Um, Because it's going to come down to a major educational program. We've got a lot of money earmarked just for the marketing and educational side. You know, I would have run a commercial on the, uh, Superbowl had we had the money and we're ready to take the orders

because of just how big a market is that at one time. So you can reach me on LinkedIn. As far as Future Proof is concerned, you can go to futureproof.org. That's O-R-G. And you can read about some of the stuff we're doing, some of the tools we're developing. There's a page that's just methodology about how we score a house, what we're looking for

in these various areas. There's some of our white papers about what the implication of this is to the insurance industry, to the real estate markets, to you as a homeowner, what you know, another one that deals with climate in terms of where are these, where are the really bad places that we're looking at. The next 20 years is critical. If we do not get ahead of this problem, it's going to be like we're tied to the railroad tracks and we're seeing that light,

a headlight of the train and it's getting bigger. And by the time you get out to 2050, the weather forecasting situation is going to be, let's put it this way, we can save 80 % we're estimating with an aggressive program by 2050. Then there's still going to be losers. There's going to be 20 % of those people out there. That's a lot of houses that we're still going to have to be able to deal with economically.

Ben Gilliland (01:07:20.012) So it's not like there'll be no impact with this because there's just some places that you're not going to be able to build. And nobody wants to hear that. But at the same time, it's worth seeing it is there's a forced transition in housing and it's being driven by the climate. And we're not really so much into having the climate argument is the fact that the market is going to force this change.

So we're basically saying, well, if the market's going to force the change by virtue of depreciation and insurance and all of the economic factors, then how can we mitigate how much damage that actually is going to be? If you can save 80%, like I said, you're still going to have some losers in that. we've used the metaphor for those groups of people as being, it's kind of like you get a lump.

you know, and you get the score back and it says, okay, you know, your oncologist says, "I'm sorry, it's cancer." you know, So now what do you do? You know, Is it different levels? Is it metastasized? You know, And I told one person that was being very militant with me about this, you know, and they were kind of going, you know, what, are you, you know, "How do you see this thing playing out?" And I said, "Well, here's what.

Here's where knowledge is power. If you look at it and you say, my home has a problem and our scoring system says that you're not one of the 80%, you're in the 20%, wouldn't it be a good time now to sell?"

Dalton Anderson (01:09:04.995) Yeah.

Ben Gilliland (01:09:06.145) Because it's going to become a part of the disclosure and the seller's statements, just like mold is, just like flood is. It's coming. There's legislation that's already percolating through the system. And the government's got to do something. They can't, with the federal government stepping back like they have, you really think that Florida can take on some of this hurricane damage by themselves?

as you know, Economically, they haven't got a tax base, even though they got a big one, they don't have a tax base that can take a hit like that. So how is how is that going to be dealt with?

Dalton Anderson (01:09:39.716) No, if we did have a catastrophic storm, effectively, Florida is bankrupt with all of the policies that are in the citizens book. I think it's close to 400,000, 443,000, which is way too much risk, and a lot of it's centralized in like Miami-Dade area, and it's high aggregation. There's a whole bunch of problems with it. The problems are just in a different episode.

Ben Gilliland (01:09:46.968) Yeah. Yeah, yeah, it's a risk.

Ben Gilliland (01:09:58.734) Mm-hmm. Everywhere that's three feet above sea level. know, I don't know if you have South, is it South Florida that your people are in though? Okay, because I know it was maybe five years ago now. I did work down in South Florida when I first started getting into contracting that was down there because people were saying, oh, well, you've done special effects stuff before and you've built all this other stuff. You know, we've got this really weird

Dalton Anderson (01:10:10.315) Yes, yes.

Ben Gilliland (01:10:27.448) project and a contractor friend brought it to him and he was going, "The guy wants to dig out his living room of this house and turn it into a koi pond." And I'm going, "Really?" And he said, "Yes. And he's a bond trader in New York and he only flies his plane in for the weekends. And this is his zen moment, is to see once a glass floor over this koi pond that he's going to these three pieces of furniture that are like Italian leather.

Dalton Anderson (01:10:36.611) Mmm.

Ben Gilliland (01:10:55.34) so he can sit there and watch his fish." So anyway though, it got built as far as that's concerned, but boy, it's pricey as you can well imagine. But yeah, but that's just the, it was very interesting stuff. But down there, I guess it was maybe five years ago and it was, I think the North shore, maybe it's South shore. I don't remember which one it was where they were.

Dalton Anderson (01:11:03.363) Can you Yeah.

Ben Gilliland (01:11:23.662) It was Miami Beach. what it was. Because when they were getting the King Tides, all of the high-end stores, know, Gucci and all this stuff, having like two feet of water. And this was happening every like third month or something. And they spent $500 million to build a water containment and channeling system to make sure that it didn't flood the Beverly Hills Rodeo Drive of Miami Beach.

And I understand it's come back already. It didn't last five years. Yeah, it's just, that's, know, well, there's a big argument that says, you know, there's some places that were just really weren't designed for human habitation. You know, it's, you know, I have friends that lived in New Orleans when Katrina went through, you know, and it just cleaned their clock. You know, Two of them moved away, never came back. The other guy, he went back, built his restaurant again and

Dalton Anderson (01:11:56.155) I know it consistently floods in South Florida, Fort Lauderdale and Miami just have consistent issues.

Ben Gilliland (01:12:22.06) He's still in business so far, you know, and they built the levees taller and bigger pumps and a whole bunch of stuff, but it's, it's a bandaid on a cut artery. You know, it's just, What can you say?

Dalton Anderson (01:12:33.453) Yeah, I think it brings us back to the statement while we're closing out this episode is the emperor eventually the emperor is gonna have no clothes and we got to figure out how we're gonna deal with that and prepare ourselves for that moment. And I typically close out the episode with wherever you are in this world. Good evening, good afternoon, good morning. Thanks for listening and tune in next week. Goodbye, everyone.

Ben Gilliland (01:12:45.986) Yeah, it's well said. Well said.

Ben Gilliland (01:12:58.232) Thanks. Dalton, appreciate it.