Insurance Companies are Tightening Guidelines

Insurance companies are tightening their underwriting guidelines and limiting coastal exposure, in addition to jacking prices way up.

Here are the changes to note:

  • Markel – One of the more affordable companies will NOT insure any home built in the 1980’s or that is known to have or have had polybutylene plumbing. Even if it’s all been removed and replaced – NO.
  • Frontline – Another very affordable option will not insure anything built prior to 2005. Or give a homeowners policy on a roof more than 15 years old.  Most company’s limit is 20 years.  (You can still get a dwelling policy – but the coverage is nowhere as good, and the price is higher)
  • Farmers Insurance – They have pulled out of Florida completely. Who knows what other coastal community might be next?
  • NCIUA – This is becoming one of the better options but has a cap of $750,000. So additional riders are needed, which can get costly.
  • Under-insured – Most homes today are underinsured. At a meeting with our President and General Contractor recently, he quoted the base square footage price for building a new home today at a minimum of $300 per sqft!

With Nationwide pulling out of coastal markets, Farmer’s doing the same in FL, and many others really tightening their guidelines, we could really use a few years of very minimal hurricane activity!

If you need more information on the best insurance options for your OBX home, do please call Steve Bonday at 252-331-8233 or email at [email protected].

Insurance Changes for Outer Banks Rentals

As part of my continued effort to provide you with the most relevant information, I wanted to reach out with some important updates regarding insurance for your Outer Banks investment.  These changes primarily involve Frontline Insurance, which is considered one of the most affordable companies available.

If you are considering selling or buying, be mindful of the following:

  1. Frontline Insurance will not write a home policy if the hot water heater is more than 15 years old.
  2. They will allow a maximum of 26 weeks rented.  With our extended renting season these days, this could really become an issue. Frontline is strict with the maximum of 26 weeks of rental. Renting for more than 26 weeks could seriously affect a claim.
  3. Effective this year Frontline will no longer write any policies in Dare County on homes older than 1/1/2005.  This leaves the only wind insurance option to NCIUA.
  4. If your home has polybutylene pipes, only a dwelling policy can be issued and no coverage exists on any issues with those pipes.  Replacement of the fittings is no longer a suitable fix. The dwelling policy is more expensive and doesn’t offer as good coverage.  Replacement of the fittings is no longer a suitable fix. Insurance agents recommend avoiding homes with Poly Plumbing – or – have the owners re-plumb the home prior to purchase.

This information is just to create more awareness.  I have some good local contacts if you have further questions, just let me know.