5 Things To Know About Severe Weather And Homeowners Insurance

5 Things To Know About Severe Weather And Homeowners InsuranceThe average homeowner feels secure knowing they have insurance in the event of a severe weather calamity. Most people believe that no matter what happens, they have paid for protection against disaster.

Unfortunately, not every homeowners insurance policy provides full reimbursement from severe weather losses. Hurricanes, tornados, earthquakes and other rare catastrophes may not be covered under your current policy.

Consider the impact of these extreme events and whether you are fully insured for the subsequent losses.

1: Hurricane Damage May Not Be Fully Covered

The recent national mobilization to deal with the fallout from Hurricane Florence highlights just how catastrophic severe weather can be to people and property. That being said, homeowners generally anticipate calling their insurance carrier to file a claim after returning home and assessing the damage.

It may come as a surprise, but many policies limit reimbursement to damage attributed to high winds. For example, a tree falls on a garage or vehicle and the insurance outfit writes a check.

But damage attributed to water can be tricky. Many policies do not cover flood insurance. That could mean that water backed up in the street or a stream, lake or pond overflowing into your home might not be covered. That’s why homeowners are advised to clarify water-related coverage.

2: Floods May Not Be Covered

People living near bodies of water may be required to carry flood insurance when applying for a mortgage. Flooding represents a high risk that can result in a total loss. Lenders are often apprehensive about approving mortgages for properties in so-called “floodplains.”

FEMA offers coverage through the National Flood Insurance Program. Homeowners living just outside a flood zone may not be required to buy additional coverage. However, you are taking a significant risk.

If your policy does not cover flooding, you could be on the hook for the full cost of the home’s repair or replacement. Considering the average flood insurance policy runs about $700, it may be worth the expense to protect your investment.

3: Tornado Insurance Coverage Can Be Murky

Although most policies cover damage from tornados, premiums can run higher in regions prone to these severe weather storms. But, like hurricanes, tornados that additionally bring about flooding can pose a problem for homeowners who make a claim. A carrier may conclude that the high wind and impact damage enjoys coverage. Water, however, can be a very gray area. 

4: Earthquakes Often Not Covered

Like people who live in flood plains, earthquake riders may be required in certain areas of the country. Without additional coverage, the destruction caused by these catastrophic events may not be reimbursed. It’s imperative that people living in or around regions prone to earthquakes carry specific coverage. Imagine losing your home and still owing a monthly mortgage payment.

The important thing to glean from this overview about severe weather claims is that homeowners are wise to dig deep into their policies and have a clear, concise understanding about coverage. Keep in mind that water damage from flooding, rain and even sewer back-ups pose a significant threat to your home. For a few dollars more, enhanced severe weather insurance may be worth every penny.

Homeowner’s insurance is a requirement for most home loans. It’s important to note that some properties at high risk may not qualify for financing or you may find that insurance for high risk properties adds too much to your bottom line. Consult your trusted home mortgage professional to find out what specific insurance is necessary to finance your new home.

The Different Foundation Options For Your House

The Different Foundation Options For Your HouseAre you thinking about purchasing a home in the near future? Or, are you thinking about building one? If so, you must think carefully about the foundation of the home. It is responsible for supporting the rest of the structure, so you need to find the right foundation to meet your needs. What are a few of the top options available?

Basement

One of the first options you should consider is a basement foundation. This is a popular choice because it can create additional living space in your home. It can also act as an additional entrance, which can be useful in some situations. On the other hand, a basement does not always contribute to the square footage of your house. In addition, it can be a bit more susceptible to leaks when compared to other types of foundations. You must make sure you take care of your basement to prevent mold and mildew from growing.

Crawl Space

Another very common type of foundation you may encounter is a crawlspace foundation. A crawl space is not nearly as tall as the basement, so it does not provide any additional living space. On the other hand, it can be used as additional storage space, and it can provide some protection against environmental hazards. You must make sure the crawlspace is ventilated to prevent mold and mildew from growing. Furthermore, it requires routine maintenance to provide structural issues from developing with the house. Always take a look at the quality of the crawl space before you decide to make a purchase.

Slab Foundation

You should also consider a slab foundation for your house. A slab foundation is very quick to build, very difficult for infestations to access, and incredibly durable. The biggest downside is that it does not provide you with any additional storage space. In addition, it may make it hard to access the plumbing if there is a problem that has to be addressed.

Find The Right Foundation 

Ultimately, these are just a few of the many options available if you are looking for a new house. Familiarize yourself with the benefits and drawbacks of different foundation types. Then, do not hesitate to reach out to a professional who can help you find the right house to meet your needs.

What To Think About Before Investing In Real Estate

What To Think About Before Investing In Real EstateDo you want to invest in real estate? If you are buying property as a real estate investor, there are a number of important factors to consider. Take a look at some of the most important factors to think about before you decide to sign your closing papers.

Location, Location, Location

Just as with your primary residence, it is important to think about the location of your investment property. Location is the most important factor in the value of just about every property, and your investment property is no different. You need to think about the proximity of your property to amenities, the safety of the area, and its proximity to major highways and interstates. Pay close attention to what property values in the local area have done recently, as this could give you an idea of what to expect moving forward.

Your Investment Horizon

How quickly do you need access to the money? You may think that the property is going to go up in value, but this is an unrealized gain until you decide to sell it. How long can you wait before you sell the property? Do you want to purchase the property and lease it out to long-term renters, rent it out to short-term renters, or simply repair the house and flip it for a profit? Different properties are better for different situations, so think about your investment horizon before you purchase a property.

Expected Cash Flow

As a property owner, you still have to cover the overhead expenses. This includes your mortgage, homeowner’s insurance, and real estate taxes. Therefore, make sure you understand how much rental income you can generate if you decide to purchase that property. Keep in mind that you may have some tax deductions you can claim as a rental property owner that might make these overhead expenses a bit more affordable.

Find The Right Property For Real Estate Investing

These are just a few of the many factors you need to think about if you are looking for real estate investment opportunities. The right property for one person is not necessarily the right property for someone else. Think about these key points before you decide which property you want to buy.