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Saturday, April 21, 2012

Insurance at the Beach

There's a saying around here "You have to pay to play at the beach!"     

 We say that for several reasons.....#1.  The new 4,000 sq ft brick house with a pool  you can get for $150,000 in Ohio or Kentucky or not what you are going to get here for $150,000.  Our homes are smaller here for one thing (cuz dirt is at a premium) and because you have the white sand beaches and blue green waters of the Gulf of Mexico at your door step, you are probably going to get a small home that needs some work for that $150,000.  But the peace, serenity, and gorgeous scenery are all free!!!!

#2.  Insurance, which brings me to my topic today.   I went to a very informative class on insurance the other day.  I wanted to share what I learned.    I am not an insurance please take what I say below as just a starting point to learn about insurance----I'm going on what I already knew, my notes and memory from the class I attended!!!

All properties here at the coast need "windstorm" insurance.     As our insurance expert stated...this is not HURRICANE be protected in case of a hurricance you really need windstorm + flood + homeowners. 

Not all properties here in Florida are required to have flood insurance.   If your property is in an X zone, you are not required (by your mortgagor) to have flood insurance.

In Mexico Beach, flood insurance is federally subsidized through FEMA, making it extremely affordable. 

Our insurance expert stated that Hurricane Katrina caused a storm surge SIX MILES inland in Mississippi.   Well........that certainly put things into perspective for me.....Mexico Beach is only about 1.5 miles deep!!!      You bet I will be encouraging ALL my customers to purchase flood insurance from now on!

The cost of insurance is based on the following items:
Construction--roof, siding, windows
Date of construction
Mitigation discounts
Type of ownership:  individual or LLC
Usage:  rental or primary
Claims history of buyer
Insured value

A house built prior to 1985 probably needs a new roof in order to get affordable windstorm insurance. 
A roof inspection must verify a roof has 3 years of life left and no leaks.  

Mitigation discounts are credits for things like...hurricane clips on your roof trusses, hurricane shutters on all doors and windows, roof construction.....These items reduce your insurance costs!

Hurricane shutters can range from a certain thickness of plywood that is cut and numbered for every door and window (every opening) kept on site to the manufactured shutters!

There are only 48 independent companies that write insurance policies in Florida!

Let's talk condos.    HOA fees pay for insurance for the building, it does not cover anything on the inside of your condo though, so you would want additional condo insurance. 
Comprehensive Condo policies would insure from the "paint in"..... contents, loss of use, liability, medical payments, Flood insurance would only cover contents.  This is not an expensive policy and definitely well worth the cost!!!

No company will 'knowingly' write any insurance policy if the dwelling is used for a vacation rental of less than one week.    If you rent your place for just 3-4 nights it would qualify for hotel-motel rates!    

Just to throw out some ball park numbers......1800 sq ft house, 1 mile from the beach, built in 2003, insurance costs were $963/year.  
A 1700 sq ft house built in 1981, a block from the costs were $1900. 

One way to ball park...big ball to estimate cost this way:
Homes built in 2002 or newer...1/2 of 1% of the value.
Homes built prior to 2002...1% of the value.    was the insurance company that taught this class.   

Thanks to Grant and Denise for a great class and I know I'll be calling to ask a lot more questions!!!

sundance realty

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