Hurricane Season 2021…Here we go again!

Hurricane Season 2021…Here we go again!

May 12, 2021

What realtors need to know about closing homes during the season…

This time of year is not only challenging for Realtors, but also for the Insurance Agents you work with get you buyers closed. 2020 Hurricane Season was a challenging year as we had an extremely active season with a record breaking 30 named storms with 12 of them making landfall in the US. Furthermore, insurance carriers are pulling back in Florida due to the legal environment. I won’t bore you with legal challenges facing the insurance industry in Florida, I’ll just say it’s as bad as we’ve seen it in more than a decade.

So, for the good news. Forecasters are not predicting as busy of a season as 2020 for the Gulf Coast. The early tracks have most of the activity in the East Coast, which is great news for all of us located on the Gulf Coast. And the bad? Insurance rates suck right now.

So, what do Realtors need to know?

Ok, you have a house closing during the dreaded hurricane season. I’m assuming the Buyer has a preapproved lender on standby, so closing should only take between 30 and 45 days (mine took 92 days but that is another story). Your Buyer should be asking Insurance Agents for quotes as soon as the right house is found. Also ask the Sellers’ Agent for a copy of the Florida Wind Mitigation for homes built prior to 2002. This will aid the Insurance Agent in finding the lowest price available. Some of theses home maybe older with roofs nearing the end of their useful lives. Click below to find out more about:

Can you Insure a 15-Year-Old Roof in Florida?

As soon as the offer has been accepted you need to concentrate on getting a firm closing date. Insurance Agents just need a few pieces of information for the Buyer, a mortgagee clause and a closing date to bind the policy. We are only allowed to bind policies 30 days prior to the closing date. You need to encourage your Buyer to bind coverage as soon as a closing date has been determined or this could happen…

“The Insurance Box” – Florida No Bind

Once a tropical storm or hurricane enters boundary of a certain Latitude and Longitude referred to as “The Insurance Box,” Insurance Agents are not allowed to bind any coverage. The coordinates of “The Insurance Box” differ among the insurance carriers, but most of them follow the states insurer Citizens guidelines. I don’t have a good picture of the box and I can’t get one off the internet without talking to the lawyers, so picture a huge rectangle that goes over the Florida, Mississippi, Louisiana, Texas and down past Cuba and across to Mexico.

Once the storm hits the “The Insurance Box” we usually won’t be able to bind any coverage for several days after the storm passes depending on the path. This could further delay closing costing the Seller, Buyer and Realtor.

In conclusion…bind coverage as soon as you have a closing date so the Buyer can get their dream home and the Realtor can get paid for their work!