Ten years after Hurricane Katrina took thousands of lives and ruined properties, another devastating act of nature has hit the south western part of Mexico - Hurricane Patricia, which was touted to be the strongest storm in recorded history.
Coastal living, although it entails considerable risks, continues to be appealing, observes Angela Coley who writes for the National Association of REALTORS® official site, Realtor.com®. Maya Roney shares in her article in Bloomberg Business that according to Bert Sperling, head of the Oregon-based company Sperling's BestPlaces, the likeliness of a hurricane hitting (and despite the scary statistics) will not deter future buyers. "Regarding natural disasters like hurricanes, people have a short memory," said Sperling.
Weighing the appeal of living along the coast against its possible dangers will make you stop for a while and think if it is really worth buying a home along that area. Coley gives five questions that you may ask before finally coming up with a decision.
1. How much will insurance cost?
Whether a hurricane hits or not, you will need to get a hurricane insurance. Before looking for a house, meet with an insurance agent who can give you a rough estimate of what you can expect to pay each year. According to the Insurance Information Institute (III), Florida had the highest average premiums ($2,084 per year), while Idaho had the lowest at $538 in 2012.
2. Should I buy on the beach, or a few blocks in?
What specific location you choose can make a difference in your premiums and risks even if it is a few miles inland. The National Flood Insurance Program's Flood Insurance Rate Map defines the flood hazard areas and those that have at least a one-in-four chance of flooding during a 30-year mortgage. These areas are marked as Special Flood Hazard Areas. You also need to check where each house falls on the map to find out flood-zone designation, as you don't have to be near the water to be in a flood hazard area, like in the case of central Texas and Oklahoma.
3. What type of house should I get?
The type of house you choose can likewise make a difference, with some built particularly to last hurricanes, such as the dome-shaped house which reduces damage, or those resting on stilts to evade flood. These homes may also get high scores from your insurance provider. Ask your agent to show you homes that are wind and water resistant, or you can hire a good inspector for a realistic review of your chosen house.
Jeanne Salvatore, chief communications officer for the III says, "If a house is built to code and to withstand a strong storm or hurricane, it can help lower insurance cost."
4. If damage does happen, what's my deductible?
According to Loretta Worters, vice president of communication for III, "Hurricanes are covered in a homeowners policy, no matter where you live." However, policies differ on your financial responsibility if you have to file a hurricane-related claim.
Many insurance companies tack on a hurricane deductible for homeowners in potential danger zones, but unlike regular homeowners insurance, these deductibles have to be paid when you file a claim.
5. Do I need flood insurance, too?
For your protection, you will need a flood policy. The policy, issued by the National Flood Insurance Program, will include coverage of damage to your property if the heavy rains or toppled levees will bring flooding in your home.
