Coastal Living and Insurance Coverage
11 Jan, 2018 |
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Coastal living has undeniable perks, but these perks oftentimes come at a premium. Aside from a higher cost of living, the truth is coastal life can come with some surprising risks.
On a recent list of the top ten costliest catastrophes in U.S. history put out by Houselogic, eight were hurricanes affecting coastal communities. This is not including Hurricane Harvey, where the damage totals are still being assessed and sure to top the list. Without a doubt, storms can wreak severe emotional and economic havoc on coastal regions.
With insurance companies recently settling such costly claims, their operating costs have skyrocketed which in turn is passed on to customers. For this reason, insurance premiums near coastlines are considerably higher, and likely to climb due to recent past severe storms, as compared to inland locations. In short, customers are having to take on more risk in their policies than in the past for both business insurance and personal insurance.
It’s important to note that insurance coverage varies by state. Most polices written in coastal areas have a separate deductible for hurricane related damages or exclude this coverage altogether, thereby requiring a stand-alone windstorm policy. It is important to look for limitations in your policies on wind and wind-driven water damage. If the area is of particularly high-risk, traditional insurance companies may not even write such policies.
High-risk areas in Texas for example, businesses and residents can purchase wind/hail insurance from the Texas Windstorm Insurance Association, a “residual insurer of last resort.” TWIA is not a “direct competitor in the voluntary insurance market.” “The designated catastrophe area is that portion of the seacoast territory where the Commissioner of Insurance [for the State of Texas] has found that windstorm and hail insurance is not reasonably available.”
When it comes to damage caused by flood resulting from rising water, this is typically excluded from all types of policies. Flood insurance is obtained primarily from the National Flood Insurance Program or select private market flood insurance companies. The Insurance Information Institute estimates 25% of flood insurance claims come from homes not considered to be in high-risk areas. For this reason, anyone living or operating a business near the coastline should consider a separate flood policy.
Businesses and individuals should proactively mitigate potential damage through obtaining proper insurance coverage. And the sooner the better, as companies won’t write new policies if there is a named storm active in the area. It is also a good idea to set aside funds to cover deductibles in the unforeseeable event of a major storm. Most importantly, if you live or operate a business near the coast, look for an agent that is well versed in the possible risks.
Our dedicated group of highly-trained professionals can help you navigate your personal and business insurance needs. We offer competitive pricing and outstanding services, all designed to fit your individual insurance needs. Living near the coast may come with risk, but we can help you mitigate your potential losses with the right insurance coverage, so you can have peace of mind. Click here for more information.