If you are considering buying a home along the coast of any state, you are probably wondering why coastal homeowners insurance is so expensive. Being so close to beautiful beaches and warm waters can be tempting, but also expensive. Homeowners insurance companies realize the risks associated with coastal home and it scares them a bit. The closer to the beach your home sits, the more you can expect to pay for your homeowners insurance. A home near or on the coast will be susceptible to many more possible hazards either seasonal or constant than a normal home or property.
Higher Property Values Lead to Higher Premiums
What you will notice first is that property values are generally higher as you get closer to the coast. You want to move closer to the water and so do many others, which is why it costs more. The higher the cost of the home and the property, the more you will have to pay in insurance premiums. Homeowners insurance companies have to risk more of their money to a possible claim. Home repair and construction costs in coastal areas are generally higher as well, which means a higher cost even for small or medium damage repairs. This higher cost is passed down by homeowners insurance companies to you via increased premiums.
High Winds Create More Risks for Insurance Companies
The high winds that come with strong coastal storms can cause major damage, even the complete destruction, of your home. The coastal areas are more susceptible to large storms than other parts of the nation and thus homeowners and homeowners insurance companies have to face higher risks. By living in a coastal region, you have already assumed this risk personally, but you will also have to assume it financially as well. Because this risk is so high, you will most likely be required to purchase a homeowners insurance policy that is completely separate from the standard policy. This, generally called a wind and hail policy, will have its own deductible, policy limits and premiums. It will also probably be underwritten through the state government.
Likelihood of Flooding Leads to Increased Rates
Coastal regions of the United States face a higher than normal likelihood of flooding. Flooding is a serious threat to a home even a whole community, and if you live in a flood zone, you will need flood coverage. Because of the wide spread devastation that a flood can cause, there is a federal flood insurance program that you may have to become a part of. The bank holding the note on your loan will require this policy if you live in a flood prone area. Just like the wind and hail policy, this will be a separate policy with its own deductible, limits and premiums. It is possible that you will need 3 homeowners insurance policies for your home if you live on the coast. A standard policy, a wind and hail policy and a flood insurance policy. This is the reason why coastal homeowners insurance is so expensive.
Continual Environmental Bombardment Affects Costs
If your home is right on the coast, you will have to deal with a coarse coastal environment that is relentless. The coarse salt air can quickly cause problems to the structure of your home. Beach erosion can slowly but surely undermine the foundation of your home. The view may be wonderful, but it comes at a price. Even without a flood or a major storm coming to your area, your beachfront home will be constantly bombarded and this translates into higher homeowners insurance rates.
How to Combat These Issues to Control Premiums
While you will most likely not be able to reduce your rates to below the average if you live by the coast, you can take steps that will help to control your rates a bit. Securing your home should be the first order of business. Storm shutters can help protect your home and can lower your rates a bit. Of course, deadbolt locks, fire alarms, an in-home fire extinguisher, motion detecting outdoor lights and a home security system can all lower your homeowners insurance rates. If you are a member of AAA, AARP or other specific professional organizations you may also see a discount. Bundle your auto insurance with your homeowners insurance and save on both. Finally, don’t be satisfied with the first policy you see. Shop around.
Compare Quotes to Save as Much Money as Possible
The governmental underwritten policies that you may have to purchase will have their rates regulated, but you can shop around to find the best rates on the standard homeowners insurance policy. Online rate quotes have made the process of comparing rates very easy, so you can gather the quotes from anywhere you can get internet access. Get at least 5 quotes for a comparison and compare like policies from different insurance providers to truly find the best deal. You can certainly get more quotes if you want, as it may take more than 5 to find the best deal. Luckily, the quotes are free and take only 15 minutes or so to gather. While coastal homeowners insurance may be expensive, it doesn’t mean you can’t save some money with a little bit of effort.