What Is Coastal Insurance?

Coastal insurance specifically caters to the unique challenges encountered by properties located in coastal areas. Unlike standard homeowners insurance, these policies cover risks such as storm and water damage, which are common in coastal regions. Whether it’s a primary residence or a cherished vacation home, coastal insurance offers choice, flexibility, economy, and superior protection for properties within a couple of miles of the water.

However, the tranquility of coastal living comes with its set of unique risks which standard home insurance policies are often ill-equipped to handle. This is where coastal insurance becomes particularly relevant.

Unique Risks for Coastal Homes

Coastal homes are exposed to a host of natural phenomena like windstorms, hurricanes, and named storms, all of which can cause extensive damage. While these may seem like distant threats to a city dweller, they are very real for those living close to the coast. Designed to mitigate these risks, coastal home insurance policies offer specific protection against windstorms, hurricanes, and tropical storms.

The higher incidence of weather-related damage in coastal areas typically leads to elevated insurance premiums. Moreover, standard homeowners policies may not even include windstorm coverage if the property is in a high-risk coastal area, necessitating the purchase of specialized windstorm insurance.

Risks such as storms, flooding, storm surge, and erosion require specific insurance coverage that is often harder to obtain.

Types of Coastal Insurance Policies

Specific risks like wind and water damage, particularly relevant to coastal homes, distinguish coastal homeowners insurance from standard homeowner’s policies. Insurance coverage for coastal homeowners typically includes protection against:

This coverage is vital for safeguarding coastal homes against these potential risks.

In contrast to traditional home insurance policies, coastal insurance deductibles are determined as a percentage of the home’s insured value, typically ranging from 1% to 5%. This means the out-of-pocket expense before the insurance coverage kicks in could be significantly higher in case of major damage.