Insurance NOW

Saturday, August 16, 2008 - By Gate Arty

Experience has shown me that many prospective home buyers shop for homes during the summer months for a variety of reasons. First off, there is more time. Many people take vacation time during the summer months. Other "snowbird" retirees elect to buy a summer home during their regular time here in sunny Florida. More often than not however, the reason involves children. Many parents have told me that they would prefer buying during the summer so they will not have to uproot & disrupt their children's school year midway, in the event that a change of school is necessary.

One important thing (especially in Florida) to consider if you are buying during the summer is HURRICANE  SEASON! For buyers who have identified a home and are in the closing process, thoughts of mortgages, inspections, & moving dominate. Another important item to consider is binding your homeowner's insurance policy. One can not close on a purchase transaction without binding insurance coverage if there is a mortgage attached to the transaction. At many points during the hurricane season, writing & binding policies is suspended, however. This can & will delay your closing.

There are two ways insurance companies determine when to temporarily suspend issuing new coverage:

1. When the National Hurricane Center issues a tropical storm or hurricane watch or warning.

2. When a tropical storm or hurricane enters a company’s “storm box.” A storm box is literally a box drawn on a map around a large geographical area. When a name storm enters that "imaginary box," policies are no longer written or bound until the threat of said storm has passed.

There can be delays in real estate closings when availability of insurance coverage is suspended. This is unfortunate, but suspensions only span a couple of days, unless there has been a major hurricane landfall, and then the delay could be longer. When a company suspends binding privileges it only affects those people who don’t already have insurance. If you are in the midst of a closing & have already secured insurance, your closing will not be delayed.

In the event a real estate closings are delayed, the properties are still, of course, insured. If it is a new home, it is still covered by the “builder’s risk insurance.” A re-sale property theoretically would still be insured by the current owner.

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