Know the Risks

Almost everyone is familiar with the risks associated with owning a property. The very same risks apply when it comes to waterfront properties. However, unlike regular homes and properties that are away from the water, waterfront properties are at a higher risk for wind damage and flooding. As such, they have some of the most expensive insurance policies. Apart from that, you may also be required to buy several policies, including one of your home, wind, and flood.

Flood insurance is generally costly. The actual cost of insuring your particular property will depend on the flood zone you are in. To find out how much it will cost to insure the property you are interested in, you will need to talk to an insurance broker who specializes in or has insured waterfront properties before. If you don’t work with an insurance broker who is familiar with insuring such properties, you can end up overpaying.

Windstorm Coverage

This type of coverage has to do with sustained winds, hail, gusts, rain, tornadoes, and cyclones. Windstorm coverage includes damage to the contents and interior of your property when a windstorm creates a large enough opening for water to enter. However, it does not cover damage due to rising waters. In some areas, windstorm damage is part of regular homeowners’ insurance. Just to be sure, the best thing you can do is to check with your insurance provider before you assume that it’s already included.

Not all waterfront properties have the same windstorm insurance requirements. Some are at a higher risk than others. This includes properties that are located within 1500 feet of the ocean, also known as “Wind Pool” areas. The majority of Private Insurers will not cover such areas, and this creates a problem. Fortunately, governments in areas like Florida have what is known as Citizens Property Insurance Corporation. The aim of such programs is to serve as insurers of last resort when there are no private homeowners insurance options available.

Insuring Your Waterfront Property Against Flooding

Apart from insuring your property against windstorm damage, which by the way, doesn’t include rising waters, you should also look into insuring your flood insurance. Whether your property faces the open ocean, river, or bay, it likely falls within the category of areas considered to be at high risk for floods. Flood risks are assessed by FEMA, which is short for Federal Emergency Management Agency. The organization assigns flood zone designations because of differences in flood risks. By entering the address of the property you are interested in on the FEMA online platform, you can find out which flood zone rating it has.

National Flood Insurance Program (NFIP)

While private options for insuring your waterfront property against floods are available, the majority of insurance policies are purchased through the NFIP. This is because most lenders don’t accept non-NFIP policies. The NFIP provides affordable coverage, and it encourages property owners to adopt responsible flood plain management regulations.

A lot of people get so excited about buying their first waterfront property that they forget all about insurance. When it comes to these properties, insurance probably contributes the most to your cost of ownership. However, there are lots of benefits to insuring your waterfront property. For instance, with proper coverage, your belongings, home and visitors will be protected.