Nine Ways to Protect Your Investment in a Coastal Property
Though the hurricane season lasts for only six months a year, the challenges of building and repairing homes along the coast is ongoing.
Whether you are rebuilding, remodeling or starting anew, considering several proactive building guidelines could make an impact on your insurance premiums and how you fare in a storm. Regardless of location (whether it be in South Florida or on the coast in Maine), the same sentiment applies: Do your research and plan for the future. It can save time, money and heartache later.
1. PLAN FOR THE FUTURE: Coastal elements (sun, sand and sea) will impact your property. Ask your architect/builder to anticipate the future and not just build to code. Whether you build new or remodel, protect your home to withstand the risk elements for decades (e.g., wind protection, slope of your home, smart features, etc.).
Do not rely on city ordinances to protect your property, as ordinances can take years to put into place and have many complexities. Regardless of what state you build in, building with hurricane/missile rated glass and reinforced doors will likely be required in coastal areas. If not mandated, still consider building a home with wind protection. Alternatively, if you are purchasing an existing home with the intent of a large remodel, the age of the existing home will determine if costly retrofits are needed. Be proactive with your builder to identify the cost of upgrading to today’s ordinances.
If you plan to do an extensive remodel, ask your architect what parameters are required to change the year of the build. For example, a 1920’s home updated in 2022 will still be a 1920’s build unless significant structural changes are made and the year is updated by the city. Having your home officially declared a newer home can positively impact your premiums and enable you to qualify for better coverage.
2. THINK POSITIVELY: Plan to build the first floor of your home above the Base Flood Elevation (BFE). Certain coastal cities have ordinances which require a home to be built so many feet above BFE. However, even if your city does not mandate it, most insurance carriers will require a positive elevation to offer cost-effective insurance. Building above the Base Flood Elevation in your area may be the best solution to keep premiums at bay. This may prove to be impossible without building your home on piers, stilts, etc. Your flood plain will allow you to determine your best plan of attack.
3. LOT FACTOR: Choose your plot of land wisely. Consider your distance to the nearest body of water. Hire a land surveyor to obtain a flood elevation certificate and determine the flood plain. In some areas, sinkholes are also a major concern. Do your research.
4. ENCLOSURES CAN LOCK YOU INTO HIGHER PREMIUMS. Coastal homes are clearly at higher risk of flooding. The best thing you can do is elevate your home. Elevated homes built without first floor enclosures (home on stilts with no finished walls or paneling, as shown below) may qualify you for optimal insurance rates and save you thousands of dollars in premium. And remember, while building a home on stilts can offer cost savings, any height advantage you give yourself could be offset if you choose to enclose the ground level (for storage or play).
5. VENTING IS VITAL: If you build or buy a property with an enclosed first floor or crawl space, adding flood vents will protect your home’s foundation and reduce your risk of flood damage. Experienced architects in coastal areas with high flood risks should suggest approved venting material and install them to meet the underwriting requirements of the Federal Emergency Flood Insurance Program.
6. DETACH YOURSELF: Detached garages can also be an effective tool for managing your flood insurance costs. Although garage space may be a luxury you cannot live without, garages are typically built below base flood elevation and may cause your home to have a negative flood elevation – costing you thousands of dollars in premium. By detaching garages, you can still have optimal storage space, but your homeowners’ premium will not be negatively impacted by a detached garage.
7. PLAN AHEAD FOR SUPERIOR CREDITS: Yes, roofing materials, wind protection and flood resistant materials can offer premium savings, but do not forget to consider other premium-reducing credits such as water leak detection, earthquake retrofitting, permanently installed generators, alarm systems and/or lightning protection, which will also help to prevent insurance losses.
8. ELEVATE YOUR MACHINERY AND EQUIPMENT: Refrain from installing any home equipment on the first floor of your home or in your garage. Keep all mechanical and electrical panels, A/C units and water heaters above the ground floor. Yes, that could mean placing equipment on to a second floor or an attic, as shown below.
9. CONSIDER YOUR COVERAGES: Be sure to discuss coastal coverages with your broker. If you are building on the coast, mold and mildew from the heat and humidity will be a factor and mold coverage may be limited or excluded. Open floor plans create good cross ventilation, which prevent mold and mildew. Other important considerations are ground collapse coverage, which may be a required coverage in your state (Florida mandates), and sinkhole coverage (comprehensive coverage for foundation issues), which is typically an optional endorsement offered. Be sure to discuss these with your risk advisor.
Whether you are rebuilding, remodeling or starting anew, it is important to stay educated. The personal risk advisors at Oswald Companies are ready to respond to your insurance and risk management needs. Please contact us and let us know how we can assist.
For more information, visit our Personal Risk pages or contact me directly.
Client Experience Leader and Associate Client Executive
(Sources: projectsmallhouse.com, mobility123.com, floridadisaster.org, weather.gov, grahamwindows.com, forbes.com, nyc.gov, fema.gov)
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