When you buy a house it’s very important that you insure it properly. That way you protect your investment and have peace of mind knowing that you’re financially protected. If you bought your house by borrowing money and you have a mortgage, you’ll be required to carry insurance. But depending on the kind of house you buy and its location, the kind of insurance you need will vary. When you purchase a waterfront property you need to make sure it’s properly insured, and that can mean more than just a traditional homeowners policy. That’s because waterfront properties are often unique, and your insurance agent can help you get the right policies for your needs.
Isn’t your homeowners policy enough?
Depending on the waterfront property you have, your homeowners policy may or may not be enough. It’s the minimum amount of coverage you should have, whether you’ve financed your home or not. If you have a mortgage, you’ll need to focus on what your lender requires, and that could mean more than just minimum options. When you get your homeowners policy, make sure you choose coverage that really protects your house. It should be for full replacement cost, and may include other options such as those for your belongings, any outbuildings, and money for you to stay elsewhere when you file a claim and your home is being repaired.
What about flood insurance?
Most waterfront properties are considered high risk for flooding, just because of their proximity to the water, so it’s very important that you’re prepared for the extra cost of that insurance. When you’re buying a house that’s considered waterfront, find out about the price of your flood insurance policy before you make an offer. That way you can figure that extra price into what you’ll be paying every month. If you’re right at the top of your budget with the price of the house, the cost of flood insurance could push the payment amount beyond what you can qualify for. If you can get the price of the home down to a lower amount, that may no longer be an issue for you.
Should you be covered for windstorms?
Sometimes living along the waterfront means you’re in an area that’s prone to windstorms and hurricanes. Those aren’t covered on your regular homeowners policy, and you’ll need separate coverage for them. The insurance is often called windstorm mitigation or hurricane buy-down coverage, and if you live in certain areas of the country and have a mortgage on your home, your lender will require it. That can add another expense to your waterfront property, so it’s important to be aware of the costs that are adding up as you decide on your home purchase.
Do you live in an earthquake zone?
If you’re contemplating the purchase of a home near the water in an area that’s prone to earthquakes, such as California or the Pacific Northwest, you may want to consider earthquake insurance, as well. Not all lenders will require this type of insurance, depending on where you live and your particular risk factors, but it’s important to ask whether you’ll need this coverage. If you do, it typically can be expensive and will have a large deductible. When you talk to your lender and insurance agent, be sure you’re clear on any concerns you have and exactly what type and level of coverage you need.
How often should you review your insurance policies?
When you buy a waterfront property and get insurance, you might get moved in and not think much about your coverage anymore. That’s common, but it’s not always a good choice. Instead, you should review your insurance policy with your agent at least once every year. That way you lower your risk of problems, such as not enough coverage or not the right type of coverage. Your agent may know of a better product or a different type of coverage that would be a good choice for you, but if you don’t review your policy you might not be aware of important changes.
When is it time to make changes?
It’s time to make changes when your life changes. Having children, adding something to your home that needs special coverage, or remodeling to a large extent can all mean that you need to adjust your coverage. Reviewing your policy with your agent is also a good time to make any changes that are needed. You don’t have to change these things, but you may want to consider it. That way you’ll be ready for anything that might happen, including needing to make a claim for damage to your waterfront property.
Have you ever lived in a waterfront home before?
If you haven’t lived in a waterfront home before, talking to your agent about the insurance you’ll need is even more important. That way you feel comfortable with the insurance you end up with, and you’ll have great peace of mind in your house. You can move in and just enjoy the home and the beautiful waterfront location. The peacefulness of living near the water is really something to appreciate, along with all the fun you can have spending time on and near the water. Whether you live right on the ocean or on a tranquil lake, there’s a lot of joy in waterfront living.
2 Point Highlight
When you purchase a waterfront property you need to make sure it’s properly insured, and that can mean more than just a traditional homeowners policy.
Most waterfront properties are considered high risk for flooding, just because of their proximity to the water, so it’s very important that you’re prepared for the extra cost of that insurance.
