Hurricane Matthew is headed our way and they are predicting that it will impact the East Coast line. As it moves towards the East coast, there may be a Moratorium on writing new Homeowner's Insurance Policies or to make changes to your existing one.
If you are planning on making changes, listing your home for sale or buying a home during this period, this Moratorium could affect you.
What is the definition of a MORATORIUM in advance of a hurricane? It’s a suspension of activity – A moratorium on issuing new insurance policies OR modifying existing policies. Depending on the track of the storm and expected severity when it hits, an insurance carrier may declare a moratorium that will be specific in the state & counties that are predicted to be affected.
What does this mean to a SELLER?
This means that as a seller, you cannot make any changes to your existing policies--such as lowering the deductible or adding coverage. My recommendation for SELLERS is to review your insurance policy now to be sure that you have adequate Liability coverage. Sellers may also want to check the policy deductible to be sure your are aware of any out-of-pocket expenses that you could incur if the need arises to repair/replace any damage from the hurricane.
What does this mean if you are BUYER?
Once a moratorium is in place, you will be prohibited from purchasing the necessary home insurance policy needed for settlement on your new home. This could hold up your settlement and create some serious issues for all parties.
Once the moratorium is lifted, new insurance policies can be issued again upon the inspection by the insurance agency to be sure that the home is still standing and/or in the same condition as it was when the financing was approved. If the homeowner's insurance policy is purchased BEFORE the declared Moratorium, you can get to settlement.
What does this mean if you are a HOMEOWNER?
If you are considering a change to any aspect of your policy, raising or lowering your deductible, do it now. Also, I recommend that you review your policy to be sure that you have adequate coverage. Many homeowners found that they were inadequately covered when Hurricanes Isabel and Sandy arrived.
Currently, there is no Moratorium but should it happen, you can be prepared.
If you need your policy reviewed for potential "holes" or need to be put in touch with an insurance agent, please reach out to me for a contact person.
Thanks and see you on the other side of the storm!
