MIAMI – Aug. 31, 2010 – If Hurricane Earl flirts with the Florida coast, many property insurers will stop writing new policies. That, in turn, impacts homebuyers who need insurance to finalize their mortgage. Without insurance, they can’t get mortgage money; and without mortgage money, they can’t close.
Insurers have in-house rules about issuing new policies. For example, Florida’s property insurer, Citizens Property Insurance, stops writing policies in a wide area if a hurricane threatens. Some insurers rely on the National Weather Service to issue a storm watch or warning. If that happens, they stop writing policies in the potentially impacted areas.
In all cases, a homebuyer heading to closing while a hurricane threatens should contact his or her property insurance carrier to determine that company’s rules.
Reprinted with permission. Florida Realtors®. All rights reserved.
Note from John Elwell: Even our current approved Florida contracts contain a clause that allows a buyer to delay the closing date if insurers stop writing new policies due to an approaching storm. See your contract for more information. Even if you are not getting a mortgage and therefore do not HAVE TO HAVE insurance coverage, do you really want to close on the sale without insurance and a hurricane on its way??? Think about it!
Comments