No one is ever excited for hurricane season, but luxury homeowners have even more cause for concern at an unsettled forecast. Those without enough insurance coverage may find out why during the first named storm of the season.
The power of hurricane-force winds can’t be underscored enough. This natural disaster can decimate homes and flatten entire neighborhoods. Luxury property owners are especially prone to financial risk as these properties usually contain high-end materials, extensive landscaping, and custom designs, and are exorbitantly expensive to rebuild. This can lead to the destruction of valuable property, and it’s a risk that insurance companies are all too keenly aware of.
Many luxury properties are in hurricane prone areas, and increasing the financial risks to insurers is that beachfront property comes with a price tag that reflects its status. Unfortunately, after each major storm, most insurance companies will reevaluate the risk in these specific areas. This can lead to higher premiums and stricter policies. In some cases, even tenured homeowners may find their insurance carrier has withdrawn from their market.
As a luxury homeowner, you want to make sure that all of your assets are properly protected. One simple way to do this is for you to confirm that you are not underinsured. Make sure that your policy covers 100 percent of the rebuild cost, not just actual cash value. Many “elite” insurance companies provide Guaranteed Dwelling Replacement Coverage plus an override, since cost of construction is constantly shifting. Some even provide a “cash option” which gives the homeowner a choice of taking the dwelling limit in cash instead of rebuilding a similar house and keeping the land. You’ll also need to get in touch with your insurance provider to make sure your policy’s most recent update covers any home improvements, renovations, or additions to the property.
Even with insurance, it’s important to remember that you may still incur some out-of-pocket expenses. This might include your deductible, upgrades to bring your property to current codes standards, debris removal, and items specifically excluded from your homeowner policy. When you are underinsured, these added costs may place an undue burden on you. Speak with Cross Private Client Insurance if you have any concerns about coverage gaps under your current policy.
At Cross Private Client Insurance, we focus on helping our clients find luxury home insurance. We are here to help you evaluate your insurance needs and to connect you with an insurance carrier that is experienced in writing policies for the luxury real estate market. Please contact us today, as we would welcome the opportunity to work with you.
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This article is for general informational purposes only and is not to be relied upon or used for any particular purpose. Cross Insurance shall not be held responsible in any way for, and specifically disclaims any liability arising out of or in any way connected to, reliance on or use of any of the information contained in this article. The information contained or referenced in this article is not intended to constitute and should not be considered legal, insurance, accounting or other professional advice, nor shall it serve as a substitute for the recipient obtaining such advice. The views expressed in this article are that of its author and do not necessarily represent the views of Cross Financial Corp. and its subsidiaries and affiliates (“Cross Insurance”) or Cross Insurance’s management or shareholders.