Page 84 - New Agent Real Estate training book

policy during that threat. This is called “being in the box” and the buyer won’t be able to obtain hazard
or title insurance during this time either.

If the buyer is financing the home purchase, their lender typically won’t grant a loan commitment
without homeowner’s insurance. So once the storm passes and the buyer obtains homeowner’s
insurance, it’s important to know how long it will take to get a loan commitment from their lender.

It will be up to you and your client to find out if after the storm passes if the lending bank and
insurance company will grant an exception, assuming the property has not been damaged and has
been re-inspected by someone licensed to do so.

HOW DOES A HURRICANE AFFECT TITLE INSURANCE?

The buyer’s agent will keep their closing attorney in the loop regarding any agreed upon changes to the
contract, but the buyer and seller should not be shy about asking questions if anything is unclear. This is
imperative because it’s the closing attorney’s responsibility to ensure that the prepaid closing costs are
allocated accurately on the settlement statement. Modifying the closing date alters the prepaid costs
and prorations.

If the seller’s home is damaged during a hurricane, there’s no direct impact on the title, other than the
sale and closing date being delayed or possibly cancelled. Title insurance certifies the rightful owner of
the property. It does not insure the worth of the seller’s home like homeowner’s or hazard insurance.

Does Homeowner Insurance Cover Hurricanes?

There's no specific insurance policy that provides hurricane coverage, but depending on where you live
and your coverage, certain hurricane damage may be covered by your homeowners or renters insurance
policy. However, flooding due to hurricanes is usually excluded from home and renters insurance, so you
should also consider a flood insurance policy. Instead, you'll need a separate flood insurance policy that
will cover rising water and storm surge from natural disasters. Homeowners that live in hurricane-prone
regions may also have to supplement their coverage with windstorm insurance to cover all hurricane
damages. If you live in a region that is at higher risk of flooding and hurricanes, you may already be
required to maintain flood insurance as a term of your mortgage. If a hurricane strikes, you may need to
file a claim under one or all of these policies to receive compensation for the damage.

Regarding Condo buildings, many developments have building insurance included in the HOA payment,
however, HO6 policies for contents sometimes offer something called Loss Assessment Insurance, which
will help cover assessment amounts that exceed the amount not covered by the master policy for the
building. It’s often not included in standard HO6 policies, have your client discuss with Insurance
provider to see if this is an option.