Here, we provide an overview of the insurance for coastal properties and explain what you should know about this policy.
If you are a resident of a coastal area or thinking of buying a property near the shore, it is essential to know the basics of the policy. Coastal homes require more coverage than standard homes as it is more likely to be damaged. The Coastal homes are located near the beach, sea, or shore, so there is a risk of flood, storm, or structural damage. This guide dives into the understanding of home insurance for coastal properties, pros and cons, key elements, difference between the standard home insurance and coastal home insurance, and coverages.
What is home insurance for coastal properties?
If you own a home at a certain distance from the coastline, this refers to the coastal property. Coastal homeowner insurance (also known as beach house insurance), is the policy that insurance companies provide to coastal homeowners. The shore property insurance is different from the standard home insurance.
Coastal home insurance protects your home from structural damage, natural disaster, or other kind of loss due to damage. Additionally, as these areas are near the beach, they have more risks of getting damaged. Because of the damage risk, they must require such policies to protect their homes.
How to know that you require coastal properties Insurance?
The question is how to estimate whether your home requires a standard homeowner insurance policy or a coastal homeowner insurance policy. The answer is simple, if you live 10 miles away from the shore, you come in inland property and you require standard homeowner insurance. However, if you live near a risky area, you should buy these coverages to protect your home such as flood insurance.
Key elements for Coastal Properties home insurance:
A comprehensive coastal insurance should cover the following factors:
Dwelling coverage:
This covers the structures of your homes, such as the walls, roof, foundation, or other associated structures.
Personal property coverage:
This covers the items or property inside your home such as electronics, appliances, jewelry, and furniture.
Loss of use of coverage:
Sometimes, due to damage, the home becomes inhabitable, in this situation the policy offers additional coverage. For example, the policy bears your living expenses until the repair.
Liability coverage:
This policy protects you if someone gets injured on your property and he or she files lawsuits against you.
Other structure coverage:
The policy offers coverage for detached structures such as the guest house.
Pros and cons of Coastal Properties home insurance:
Pros:
- Coastal home insurance replaces the standard home insurance so you don’t need to add extra coverage, which makes the process easy.
- It is a source of peace of mind, as you know that your biggest asset is insured.
Cons:
- Usually, coastal home insurance is more expensive than the standard one. It is because of the high-risk area and there are more chances of damage to the home.
- You have to add some supplemental coverages such as flood coverage and earthquake coverage, as these are not included in the policy.
Difference between home insurance and Coastal Properties insurance:
| Features | Standard home insurance | Coastal home insurance |
| Hurricane coverage | Damage due to wind is covered but hurricane and windstorm coverage is excluded | Require windstorm and hurricane policy separately |
| Coverage scope | Simply coverage for robbery, fire or other damage | Coverage for the damage plus hurricane and windstorm coverage |
| Flood coverage | Excluded in this policy | Basically excluded but must require due to high-risk |
| Premiums | Comparatively low premiums | High premium due to risky area |
| Deductibles | Fixed deductible | High deductible for hurricane and windstorm coverage |
| Location based risks | Inland areas has lower risk of damage | Based on the location, high-risk of coastal damage e.g. wind, flood, erosion and earthquake. |
| Liability coverage | Optional | Highly recommended for due to high-risk |
| Additional living expenses | Temporary housing until recover | Included |
| Availability of policy | Widely available across the region | Specific for coastal areas |
What policies do you need for Coastal Properties insurance?
There are some exclusions in coastal home insurance such as flood, wind storm, etc. Without these perils, your home is more likely to be damaged due to wind storms or floods, as these areas are risky. Therefore, these two policies are essential for the shore property.
Flood insurance:
Since, homeowner insurance does not cover the Coastal Properties policy you have to buy this policy separately, especially if you live in a high-risk flood zone. Flood insurance protects your home from this natural disaster if your home gets damaged due to flood. You can buy this policy from the national flood insurance policy but one can purchase it from a private company.
Windstorm insurance:
Wind insurance is also essential for coastal homeowners. If your policy does not cover the wind or hail coverage, make sure to add this policy.
In short, insurance for the coastal property protects your home from damage due to floods, windstorms, structural damage, liability coverage, and swelling coverage. The areas near the beach are at risk of such catastrophic events. You can protect your home by choosing the right combinations of the policies. Share your experience in the comment section if this guide is helpful for you. Stay tuned for more updates.
FAQs:
Is Coastal Properties insurance required?
It is not necessary to buy coastal home insurance legally but it is a wise decision to buy this policy for the protection of your home.
What are the policies you need for a beach house?
You require a coastal home insurance policy for the beach house. You can also buy additional policies for more protection such as flood insurance and wind insurance.
Is coastal insurance more expensive than the standard home insurance?
Yes, coastal home insurance is more expensive than the standard one. This is because the damage of the beach homes is more expensive to cover. However, this is the reason, most companies do not offer this policy, if they offer they demand a high premium.
