Ensuring Home Buyers Secure Property Insurance Before a Named Storm Enters the "Box"

Andrew Pierce  |  August 28, 2023

Hurricane Preparation

Ensuring Home Buyers Secure Property Insurance Before a Named Storm Enters the "Box"

Ensuring Home Buyers Secure Property Insurance Before a Named Storm Enters the "Box"

Hurricane Preparation Andrew Pierce August 28, 2023

In the realm of real estate and home buying, there are many moving parts that both agents and buyers need to be aware of. One of the most overlooked, yet crucial, aspects is the importance of securing property insurance, especially in regions prone to natural disasters like hurricanes. This becomes even more imperative when a named storm is on the horizon. Let's delve into why it's essential for home buyers to have their property insurance bound before a named storm enters the so-called "box."

What is the "Box"?

The "box" refers to a predefined geographical area, typically in hurricane-prone regions, where insurance companies may halt the binding of new insurance policies if a named storm enters. This region is 100 miles east of, and 100 miles south of Wilmington, NC.  This is a risk management strategy for insurance companies to prevent last-minute policy issuances that could result in significant claims.  Once the storm enters this space, insurance companies go under binding restrictions.  This means that carriers can no longer offer coverage to auto, home, boat, property --- anything.

Why is it Important?

  1. Protection Against Potential Damage: The primary reason to secure property insurance is to protect the investment. If a storm damages a newly purchased property and insurance hasn't been bound, the financial repercussions can be devastating.

  2. Avoiding Insurance Delays: Once a named storm enters the "box," insurance companies may not allow new policies to be bound until the storm has passed and the threat is over. This can lead to significant delays, especially if the storm season is active.

  3. Mortgage Requirements: Most mortgage lenders require proof of insurance before closing on a property. If a buyer can't secure insurance due to a storm in the "box," it could delay or even jeopardize the closing process.

Tips for Home Buyers:

  1. Act Early: As soon as you have a contract on a home, start the process of obtaining property insurance quotes. This gives you ample time to compare rates and get the insurance bound.

  2. Stay Informed: During hurricane season, keep an eye on weather forecasts and storm trajectories. Being aware of potential storms can help you act proactively.

  3. Work with a Knowledgeable Agent: A seasoned real estate agent will understand the importance of securing insurance early and can guide buyers through the process.

  4. Understand Your Policy: It's not just about having insurance; it's about understanding what it covers. Make sure to discuss with your insurance agent about the specifics of your policy, including deductibles and coverage limits.

In Conclusion

The excitement of buying a new home can sometimes overshadow the nitty-gritty details, but it's essential to prioritize property insurance, especially in storm-prone areas. By ensuring that insurance is bound before a named storm enters the "box," home buyers can have peace of mind knowing their investment is protected, and the home buying process can proceed without unnecessary hitches.


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