As Hurricane Season Begins, Georgia’s Home and Business Owners Should Heed This Advice From SSP’s Susannah KinseyJune 11, 2018
Develop A Plan, Check Your Insurance, Make Repairs to Your Home or Office
The Atlantic Hurricane season is expected to have a “slightly above average” number of hurricanes and tropical storms, according to the Colorado State University (CSU) Tropical Meteorology Project. CSU is projecting 14 named storms will form during the June 1 – Nov. 30 hurricane season. Six of those are expected to reach hurricane strength. Two are likely to be major hurricanes of category 3 or higher (winds from 111 to 130 mph).
“For clients with property along the coast or Tier One areas, it is important to think ahead during hurricane season,” says Susannah Kinsey of Atlanta-based Sterling Seacrest Partners, an expert in real estate and risk management. “Commercial real estate owners and homeowners need to have a thorough plan in place, including having the right insurance and making sure all repairs to the home or office are completed and able to withstand the weather.”
Before the hurricane is predicted it is important to determine your risk. Home and business owners should develop an evacuation plan and assemble any necessary supplies including food and water. A hurricane plan should be quick, simple and practiced. A reasonable timeframe is 48 hours or less before estimated landfall.
- Time – There should be enough time to protect the property and allow for personal evacuation.
- Supplies – Property owners should have all supplies needed to board up windows and doors on the property.
- Checklists – A series of checklists to help facilitate implementation simplifies the process as no one usually has time for details when the storm is approaching.
- Practice – “Practice makes perfect.” Practicing allows you to determine how much time is needed and how many people it will take to properly protect your property asset.
Kinsey says property owners need to be aware of what is included in their insurance coverage. Business owners and homeowners cannot increase the amount of their insurance limits or add coverage to a single property after a hurricane watch or warning is in place.
Purchasing property along the coast during hurricane season comes with some warnings. To buy a home or commercial property along the coast, hurricane insurance must be in place at loan closing. Most of the insurance carriers place moratoriums on binding insurance for a period of time once an active storm watch or warning is in place. This restriction means some purchasers cannot get hurricane insurance once a hurricane watch or warning is in effect in the area surrounding the property.
Kinsey says not being prepared can mean big losses: “Not having insurance in place can mean losing escrow money or even the contract on the new property.”
If there is earnest money in a transaction, the delay in getting coverage could cause the buyer to lose those funds. That loss could be thousands or millions of earnest dollars depending on the size of the transaction. Buyers can’t close on a residential or commercial real estate transaction if coverage is not in place. When buying coastal property, Kinsey recommends putting a caveat in the purchase/sale agreement that closing dates can be extended if a hurricane is approaching.
The restrictions typically end within 48 hours of a watch or warning being lifted, but by then it may be too late to protect your investment or your property. The official hurricane season runs from June 1 to November 30.