Rick Gorsuch
Nancy Johanson
Johanson & Associates, Inc.
Lutz, FL
Broker

813-949-5779
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Nancy Johanson's Real Estate Column

A Storm on the Horizon! 

According to the National Weather Service the recognized hurricane season in Florida is five months long, beginning in the month of June and officially ending in October. There is also documented weather history that shows tropical storms and hurricanes have developed and threatened Florida residences outside of the recognized five-month season. 

The word “hurricane” can be traced back to the Taino Indians of the Caribbean who referred to the storms as Huracan (evil Spirit) and the Maya word Hurakan (God of Storms). The effect of each major storm that has struck Florida and delivered catastrophic damages, such as Hurricanes Andrew, Hugo, Kate, Camille and more recently the 2004 Hurricanes Charlie, Frances, Ivan and Jeanne, are far more reaching than many people realize. 

Every buyer and seller of real estate during hurricane season needs to take extra precautions to ensure that their transactions will close smoothly regardless of the weather. 
Ironically, hurricane season coincides with Florida’s busiest season for real estate transactions. For obvious reasons more people buy, sell and relocate during the summer months than any other time of the year, causing real estate transactions in many areas to double or triple. 

Mortgage lenders require that the purchasers of real estate provide proof of homeowner’s insurance coverage on the day of the closing. The buyer must meet this contingency or the closing agent will not be permitted to release funds to the seller and the title for the property will not be transferred to the new owners. In other words the closing, will be cancelled or postponed until a later date. 

Even if a storm doesn’t directly impact the immediate area the storm damages can be far reaching for the buyers and sellers of a pending real estate transaction. Depending on the type of purchase contract and the closing date requirements the sale could be voided. Items contained in the mortgage loan commitment such as interest rate, points and closing costs may also be subject to change in the event that the transaction does not close within a specified time frame. 

When tropical storms and hurricanes develop and begin their tract toward Florida’s coastal regions the national weather service will issue storm watches and storm warnings for the public’s safety. A hurricane watch means that a storm is approaching and the hurricane warning means that the storm is predicted to strike. 

Insurance companies will suspend issuing homeowners insurance policies long before the national weather service announces the storm watches and warnings. Therefore it is important to know that if you have a real estate transaction scheduled to close and a tropical storm develops, you may not be able to secure the required homeowners insurance coverage prior to the closing date. 

After each major storm has struck the homeowners insurance companies have tightened their belts by increasing insurance premiums, reducing coverage in certain areas and setting stricter limitations on coverage regarding property damage from wind and rising water. 

You can’t change the weather, but you can change the outcome of your real estate transaction and the possibility of postponing the subsequent closing of the transaction by taking this simple precaution when purchasing real estate during the hurricane season. Consider purchasing your homeowners insurance policy for your new property early in the process. A good time to purchase your new homeowners policy would be as soon as your offer is accepted by the sellers and the written contract has been signed by all parties to the contract. 

If the sale should fail to close for any reason you can cancel the homeowners coverage and request a refund from the insurance company for any unused premiums. Be sure to consult with your local insurance professional prior to signing a contract for this type insurance coverage. Ask specific questions regarding any limitations contained in the coverage. Also inquire about the company’s policy regarding cancellations and refunds. 

Additional information regarding homeowner’s insurance policies and hurricane coverage is available from the Florida Department of Financial Services at www.fldfs.com 


Nancy Johanson
Johanson & Associates, Inc.

24140 State Road 54, Suite 101 
Lutz, FL 33559
Office: 813-949-5779
Fax: 813-949-9605
Contact Me

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