Hurricane season may affect your closing

Homebuyers that need property insurance coverage to get a mortgage can find Florida’s hurricane season a bit challenging. While the rules vary between insurance companies, all have some kind of guideline that suspends the issuance of new policies when a storm threatens the mainland.

State-owned Citizens Property Insurance has some of the strictest policies. Citizens won’t allow Miami buyers, for example, to get a policy or existing homeowners to expand a policy if a storm threatens Pensacola, even if the skies remain sunny in South Florida.

According to Citizen’s website: “No application for new coverage or endorsement for increased coverage may be bound, written or issued, or monies received, regardless of effective date, when a Tropical Storm or Hurricane Watch or Warning has been issued by the National Weather Service for any part of the State of Florida.”

Other insurers have rules that cut off coverage when a hurricane is “in the box” and threatening the Florida coast, though the size and location of that “box” varies among insurers. If a storm seems possible around a scheduled closing, buyers can contact their insurer to find out if they have options, such as taking out a policy early.

Hurricane Andrew hit Florida in 1992 with sustained 140 mph winds and caused $15.5 billion in insured losses. According to A.M. Best Co. Vice President of Property/Casualty Ratings Rich Attanasio, it changed the way the insurance industry views coastal risk forever.

Andrew caused 700,000 claims, destroyed more than 107,000 homes and destroyed or damaged 82,000 businesses. In the last 20 years, only one other storm has been as devastating – Hurricane Katrina with insured losses of $46.4 billion in 2011 dollars, according to the Insurance Information Institute.

Andrew caused 13 insurers to become insolvent, forcing insurers to modify how they view coastal risk.
“(Hurricane Andrew) accelerated the understanding of the concentration of risk,” says Attanasio. “It accelerated insurers’ knowing their risk and managing their exposures. Pricing and deductibles were offshoots of that.”

Following Hurricane Andrew, some insurers created hurricane deductibles and raised rates; others withdrew from underwriting coastal risks altogether.

For more information  on buying or selling a home in South Florida, go to my website at



© 2012 Florida Realtors®
Source: BestWire (08/17/12) Green, Meg
© Copyright 2012 INFORMATION, INC. Bethesda, MD

About ericmorin

I started my career in the field of waste management and recycling. I have created and operated dozens of projects related to the world of recycling and landfill. I have recycled tens of thousands of tons of trash out of the municipal waste stream in different city across the world. Those projects took me from Canada to South America. I moved to South Florida from my last project in Colombia, South America. I wanted to be in business for myself because I know I have those skills and that is when a person can really find happiness and valorizing success. That was important for me totake the challenge to be successful in realizing the goal of being in business. I have done used car finance on a large scale and I even had my own used car dealership. I always had in the back of my head the real estate business. I finally made the jump and started a very interesting career with Keller Williams Realty where I found that I am in business for myself but not by myself. I always place the client first. It could be a city or a municipality. It could be a person looking for financing a car or to simply buying a car. It could be a person looking to sell or buying his home, I will always reach out to this person to help and bring my experience together with my knowledge to help a person to realize its dreams.
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