South Florida residents know all too well that windstorm damage can be devastating. One only needs to mention Hurricane Andrew in 1992 to evoke some pretty vivid memories. More recently, the 2004-2005 seasons were unprecedented in the frequency of hurricanes and damage they caused. With this in mind, it’s easy to see how imperative it is to calculate the cost of windstorm insurance into any real estate transaction.
When I moved to Palmetto Bay in 2004, I had some knowledge about windstorm insurance, but really didn’t know how it worked. Perhaps you are in a similar situation. Windstorm insurance (sometimes called hurricane insurance) protects the policyholder from the effects of wind and wind-borne debris. This article provides starting points to understanding the mechanics of windstorm insurance. As always, consult with a professional about your specific needs.
Since Hurricane Andrew, a lot has changed in windstorm insurance. Although it is still possible to get private windstorm insurance, the list of carriers continues to dwindle. As a result, in 2002, the State of Florida created Citizens Windstorm Insurance Corporation. Citizens is utilized as a ‘last resort’ choice when no other carrier will insure the property. Citizens is required by law to have rates that do not compete with those of Florida's private insurance companies. It calculates those rates by looking at the rates of the top 20 insurers in the state and making sure its rates are higher. Therefore, it is strongly recommended you invest the time to call several carriers to see if you can get a policy written with them. I have found a little cheat here. Click on Miami-Dade County and a list of private windstorm insurance carriers will pop up.
If you land with Citizens as your carrier (and most of you will), the next step in understanding the mechanics of windstorm insurance is to look at home construction and location. In 2002, froze zones
Happy Home Hunting!
Hal
One of the reasons South Florida is called a little slice of paradise is the area’s abundant water. You are never too far from the beautiful ocean, sparkling lake, canal or stream. However, sometimes we get too much of a good thing. Because Miami-Dade County is located in a unique geographical area, it is particularly susceptible to flooding from major rain events and storm surge.
With few exceptions, mortgaged homes in our region will require flood insurance. If not required, it is certainly strongly advised that the homeowner look into the hazards of potential flood waters and protect themselves accordingly.
When I moved from the Northeast to Palmetto Bay in 2004, I had no idea about the importance of flood insurance. It was eye opening to understand how the risks were calculated, how a home was classified into a particular risk categories and how to best factor this information while selecting a home.
Most homeowners insurance policies do not cover flood damage. So, in 1968, Congress created the National Flood Insurance Program (NFIP) to help provide a means for property owners to financially protect themselves. In order to participate in the NFIP, your community must comply with FEMA standards to reduce the risks of flooding. Don’t worry, nearly every South Florida community is qualified to participate in the NFIP. To get started, work with your homeowners insurance company. They will provide information to help you obtain a flood insurance policy. Pricing varies on the coverage as well as risk.
FEMA designates risk levels (available here) by looking at elevation and proximity to water. They then assign each parcel of land a letter designation. Depending on your home’s letter designation, you will either be required to or have the guaranteed option to purchase insurance. You can ask the
Here are a few links showing lot-level flood zones: Miami-Dade County (shows entire county map), Palmetto Bay, FL, Pinecrest, FL and Coral Gables, FL. You can also call the Miami‑Dade County's Flood Zone Hotline at (786) 315‑2847 to confirm your exact flood zone designation. As you hone in on home that you like, take a few moments to understand the flood risks associated with the property. A little knowledge goes a long way.
Miami-Dade County continues to work with FEMA to reduce flood risks. Because of drainage improvements funded through the Miami‑Dade Stormwater Utility, and other enhancements to the community services provided by Miami‑Dade County, effective October 1, 2003 a 25% discount is included in the rate to those residents in unincorporated Miami-Dade who are in a flood zone and purchase flood insurance policies. A 10% discount is also available for those outside of flood zones, with the exception of Preferred Risk policies.
Happy Home Hunting!
Hal
THE BENEFITS OF PRE-APPROVAL
Pre-approval, as opposed to pre-qualification, signifies that the loan application has been taken through a rigorous procedure. Here's why pre-approval buyers are ahead in the home buying game:
- If you make an offer on a home and then apply for a loan, you are at the lender's mercy, who is aware that you do not have time to shop around.
- Pre-approval saves time spent looking at houses you can't afford.
- A pre-approval letter from a lender gives you an edge when multiple offers have been made on a house.
- Pre-approved buyers can generally close escrow more quickly, since most of the work has already been done.
Happy Home Hunting!
Hal
