Don’t Get Caught in “The Box”

Real Estate

The Atlantic Hurricane Season runs from June 1st until November 30th. Many home buyers who are house hunting during this time are unaware of a situation that can arise that will prevent them from closing on their purchase on the date they anticipated. It’s called “The Weather Box” - an approximately 16,000 square mile area that encompasses Florida, most southeastern states, the Gulf of Mexico, and extends well into the Atlantic Ocean. If you live in Florida or plan to buy a home in Florida, you are in The Box.

When a named storm enters this zone, it is said “The storm is in the box.” When this occurs, insurance companies will cease issuing binding coverage, and that can bring your pending closing to a screeching halt. If you will have a mortgage, your lender will require you to insure the property. If you can’t get insurance because of a pending storm, you can’t close. This freeze will remain in effect until the storm dissipates or completely exits the designated area, which can be days or even weeks. One sure way to avoid this happening is to lock in insurance on the home as soon as you feel reasonably confident you will close. If something happens during the process and you end up not purchasing the home, your premium canbe refunded.

If you already own a home, you should be aware that this situation will also place a freeze on issuing increased coverage for your existing home. That means it’s too late to add Flood Insurance or any other supplemental coverage.

The exception to this rule is if you’re a cash buyer. With no mortgage lender involved, you can forego insuring the property if you are willing to assume 100% of the risk.