What Floridians Need to Know About Insurance

DO YOU HAVE ENOUGH INSURANCE?

Living in Florida we all know we are at risk of a hurricane between June 1st through November 30th. The biggest mistake I have seen is the assumption that because you have Homeowner’s insurance you are covered in the case of a Hurricane. But there are other mitigating circumstances that result from a hurricane like water and wind damage, which may not be made a part of your homeowner’s insurance policy.

There are two critical must know facts regarding insurance. Homeowners insurance is not hurricane insurance and there is a 30 day waiting period. "Prepare for Hurricane Season: Buy Flood Insurance Now" is the title on the FEMA website posted May 29, 2009. According to FEMA, floods are the most common hazard in the US, and most homeowners insurance doesn't cover flood damage.

Everyone is at risk of flooding and Flood coverage is available in the form of a separate policy both from the National Flood Insurance Program (NFIP) and from a few private insurers. The fees for insurance are mandated by NFIP so even if you try and shop around, the only difference you may see in rate would determine on the fee the insurance agent is charging you to manage that policy.

NFIP was created in 1968 by Congress for those communities that agreed to adopt and enforce flood plans to reduce flood damage would have federally backed flood insurance. And in 1994 Congress passed the National Flood Insurance Reform Act (SFHA) lengthening the waiting period required before an NFIRA policy can go into effect. The waiting period is 30 days for a new or modified policy. During a Hurricane it is less likely any insurance company will insure you so it is important that you obtain insurance before hurricane season.

A 2008 poll by the Insurance Information Institute found that only 17 percent of Americans have a flood insurance policy, ranging from 15 percent in the West to 17 percent in North Central States and the South to 20 percent in the Northeast. Coverage is provided for up to $250,000 for the home and $100,000 for personal belongings and policy premiums can range anywhere between $300 to $2,000 depending on the coverage amount, type of home and amount of personal property coverage you need. The higher deductible you select, the possibility for a lower premium.

On the FEMA website there is information about the National Flood Insurance Program, flood maps and a calculator to estimate premiums. They also link to FloodSmart.gov, the official site of the National Flood Insurance Program and the Insurance Information Institute website has down-loadable information regarding the National Flood Insurance Program.

In addition to Flood, hurricanes cause wind damage. Typically homeowners insurance covers wind damage; but during a hurricane there can be wind related damage to a window or door that results in flooding. According to the fine print, this type of flood damage might not be covered in the policy. Additional wind and hail coverage might be necessary.

When researching Homeowner’s insurance , typically enough insurance will be required to rebuild the home ( replacement value) and to replace all personal belongings. Speak to an insurance agent or company and have discussions regarding requirements as well as deductibles. Most coastal residents have percentage deductibles for storm damage rather than the traditional dollar deductibles that are used for other types of losses such as fire or burglary.

If you are buying a home during hurricane season, some insurance companies may freeze the underwriting of new policies until the storm is to pass. Don’t be discouraged, if you can not get your quotes or a binder for closing. Remember you can always ask for an extension of closing to allow for the storm to pass and the proper binder to be obtained.

Get informed this Hurricane Season and know your options so you can be properly protected.

Information gathered from FEMA.gov, floodsmart.gov, Florida Department of Insurance 2009

SHORT SALES - WHAT YOU SHOULD KNOW

STILL HUNTING FOR THOSE BARGAIN HOME SALES?
WHAT YOU SHOULD KNOW IF YOU ARE INTERESTED IN BUYING A SHORT SALE
Short Sales can take between 60 and 120 days or longer for lender approval and your offer is placed in a stack of other offers which may or may not be presented to the bank. Note that in most cases, the bank will accept the highest and best offer, so make sure you understand the particular nature in which your offer will be handled, have the appropriate contingency placed in the contract so you can back out if you feel it is taking too long, and discuss with your real estate professional, what the right course of action would be in your best interest depending on the type of financing you are achieving. This will make it a win-win for everyone. For a more information on short sales, send me an email at Dawnmarie@kw.com.