Few things are quite as luxurious as a home on the Gold Coast. But waking up to your own private oasis overlooking the Long Island Sound comes with natural risks worth considering before you close. Prime waterfront real estate comes with heavy costs and added exposure.
It is going to cost you:
• Flood insurance is not only advisable and expensive, but it is actually required if you have a mortgage.
• Homes based in flood hazard areas present more than just flood costs to your home owner policy: if the property is on the coast, you will have to pay charges for potential wind damage too project tracking software. Yes, that’s right: you will wind-related surcharges.
• And flood charges are not fixed: Flood premiums will continue to rise until FEMA establishes rates that are able to offset its debts and future claims FEMA anticipates.
And you will be exposed:
• Flood policies cover $250,000 in damages to your home and $100,000 for contents – far less than the value of a home overlooking the Long Island Sound and far less that the value of the contents of that home. This leaves you with two alternatives: Pay extra for an excess flood policy or accept the risk of loss that will come with the limitations of the base policy.
• Storms cause remapping, so the risks that come with your initial purchase are fluid, so to speak, as the landscape literally changes with each major flood. The memory of Hurricane Sandy is slowly fading, but don’t forget the way in which the storm changed the coastline. Another major storm might cause the same level of change, which means added risk that comes with the unknown, which often includes higher costs.
- If you are coastal and have had no claims (home or flood), your rates will still increase incrementally over time, but a large claim could have a significant impact on your regular insurance costs.
• Finally, flood claims are a major exercise when it comes to getting paid for a loss, a process steeped in frustration.
Of course a view of the Sound can eclipse these warnings, but it is critical to be informed before making a decision and then doing all you can to protect yourself. There will be costs, uncertainties and added exposures. Shepard Insurance Group specializes in Coastal Risk Management, so call us for a Signature Assessment and we will ensure you are informed and well protected so that you can enjoy the sunsets with piece of mind.