Important Insurance Information For Buyers
(Courtesy of BB&T Carswell Insurance Services)
Our South Carolina coastal areas are popular for those seeking a mild climate, access to the sea, and a vibrant economy based on year-round recreation. Occasionally, however, our generally gentle weather has the potential to be interrupted by damage-causing storms. Thus it's important for every home owner to protect themselves with quality flood and wind insurance in addition to the usual homeowners' casualty coverage.
The following sections offer a brief discussion of each kind of insurance, but we also urge that you contact an experienced agent, such as Carswell before you finalize any real estate purchase.
- Standard "Homeowners" Casualty Insurance: Hurricane, Wind & Hail Coverage
- Flood Insurance
- Loss of Use coverage; Rental income insurance
- Loss Assessment Coverage
Homeowner's Casualty Insurance: Hurricane, Wind & Hail Coverage
Basic homeowners insurance policies cover damage to your property, possessions and home due to fire, severe storms, tornados and hurricanes. Loss of possessions like furniture, electrical appliances, jewelry, clothing are also generally covered, up to a specific percentage of the policy. Liability coverage protects you in case you are responsible for someone else's injury or property damage. Liability coverage also covers certain injuries that happen within the premises of your home such as your dog biting someone. Dwelling coverage covers damage to your outstanding building (garage, storage, shed, fencing, boundary) and your home. Be aware that there are important differences between "Wind and Hail" deductibles and damage caused by a "Named Storm." Misunderstanding your coverage can be costly.For example: say your home is insured for $300,000 and your roof is damaged by a thunder storm. If your policy has a Wind and Hail deductible of 2 percent (the usual), your share of the cost of repair will be $6000 (2 percent of $300,000). But if you have "Named Storm" coverage with a 2 percent deductible and $1,000 for "All Other Perils" your share of the repair will be only $1,000 – a savings of $5,000. If the damage were caused by a tropical depression named by the National Weather Service, the 2 percent deductible would apply – there would be no savings. Important: Many insurers no longer provide Wind and Hail coverage in coastal communities. To fill this gap, property insurance companies have created the South Carolina Wind and Hail Underwriting Association ("Wind Pool") to provide coverage. Deductibles and limitations vary depending on type of property insured. For a more complete discussion, ask your insurance agent.
Flood insurance is vital in the Lowcountry, with ground elevations just a few feet above sea level. Insurance experts have found that one in four homeowners will experience flood damage during a 30-year mortgage – a risk greater than fire. Be aware that damage caused by flooding and rising water is not covered under standard Homeowners policies. A separate flood insurance policy is essential. Yet, in many flood-prone areas, insurance by private companies may not be available. The federal National Flood Insurance Program provides insurance in flood zones where private firms won't, subject to certain strict regulations. For a more complete discussion, ask your insurance agent.
Loss of Use Insurance - Rental Income Insurance
Loss of Use coverage pays your temporary living expenses when your home is not suitable to occupy due to damage caused by fire, storm or any other man made or natural calamity. This is often covered within a standard Homeowner's policy. The amount "cap" can be increased with additional premiums. Property owners who expect to rent their home or condominium should consider Landlord Rental coverage, which can cover not just the dwelling but also personal property used by tenants, such as furniture and appliances. Coverage can also include injuries to others that occur on your rental property, and liability coverage for bodily injury or property damage lawsuits. If rental income is important, a Landlord policy can reimburse you for the value of your lost rental income for up to 12 months if your property is unfit to rent to a loss from man-made or natural disaster. For a more complete discussion, talk to your insurance agent.
Loss Assessment Coverage
A specially designed property coverage for condominium unit owners. This coverage provides protection for assessments made by the condominium association resulting from loss to the property. The policy is written to pay the assessment if the loss is caused by an insured peril.
For a more complete explanation, ask your insurance agent.