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How Proximity to the Ocean Affects Your Home Insurance

When it comes to coverage against Hurricane/Severe Weather in home insurance, one of the most crucial factors to consider is the accurate distance of your property from the ocean, especially in beach cities. The proximity to the Ocean can significantly influence the risk increase for your property and the Insurance Company protecting it. This has an impact on both the coverage options on the market and the premium of your policy.

But how important is this aspect when buying a policy? Can this affect the outcome of a claim? And if so, how bad?
This article explores the importance of accurately declaring the distance from your property to the ocean when adding Hurricane/Severe Weather as one of the coverages of your Home Insurance Policy.

Understanding Hurricane Coverage in Home Insurance

“Hydrometeorological Phenomena”, mainly known as Hurricane/Severe Weather, is one of the Catastrophic Coverages of Home Insurance that protects your structure and contents against damages caused by such risks. This type of coverage typically includes:

  • Wind damage
  • Flooding
  • Mudslides
  • Hail
  • Frost
  • Flooding by rain
  • Sea stroke
  • Tidal waves
  • Structural damage resulting from hurricane-force winds and storm surges
  • Among other related events.

Given the destructive potential of hurricanes, insurance companies assess various risk factors to determine the appropriate coverage and premiums for each property.

The Role of Proximity to the Ocean

The distance between a property and the ocean is key in determining the risk of hurricane-related damages. Properties located closer to the water are generally at higher risk due to several factors:

1) Heavy Seas: Coastal properties are more susceptible to heavy seas, leading to severe flooding and structural damage.

2) Stormy Winds: Stormy winds are typically higher near the coast, increasing the probability of wind-related damages.

3) Erosion: Coastal erosion can undermine the foundations of buildings, posing a significant threat to the structural integrity of properties near the ocean.

Given these and other similar risks, insurance companies strongly emphasize a property’s proximity to the ocean when it comes to Hurricane/Severe Weather coverage.

Accuracy in Declaring Distance

When adding hurricane coverage to their policy, homeowners are required to provide detailed information about their property, including the distance from the ocean, lakes, lagoons, rivers, or a significant body of water. Accurate declaration of this distance is essential for several reasons:

1) Correct Premium Calculation:

Insurance premiums are determined by evaluating the risk level. If the distance from the ocean is inaccurate, the insurance company might not fully consider the increased risk, leading to potentially lower premiums.

2) Appropriate Coverage:

Providing accurate information ensures that homeowners receive the appropriate level of coverage for their property. If the distance from the ocean is understated, the coverage may not cover the full extent of potential damages. This can leave homeowners financially vulnerable in the aftermath of a hurricane.

3) Policy Cancellation:

Although guidelines about this vary among companies, companies reserve the right to cancel policies if they find that the client’s information is inaccurate or misleading. Declaring the accurate distance from the ocean helps maintain the validity of the insurance policy, ensuring continuous protection for the property.

Consequences of Inaccurate Declarations

Failing to declare the accurate distance from the ocean can have several negative consequences for homeowners, with the most important being:

Claim Denial: Inaccurate information can lead to denial of claims, leaving homeowners without financial support when they need it most.

Specifically talking about Hurricane/Severe Weather, if the distance from the property to the ocean or body of water is inaccurate, the company will deny the payment of the claim whether the damages were caused by an actual hurricane, a light rain, tidal waves, or any other event that falls under the category of “Hydrometeorological Phenomena”.

So now that you know it is of utmost importance to accurately disclose the distance, the question is, “How do I ensure it is stated properly in my policy?” Here are a few ways to do that:

Best Practices for Accurate Declarations

To ensure that the distance from the ocean is accurately declared, homeowners should follow these best practices:

  1. Use reliable tools to measure the distance: there are tools such as GPS devices or online mapping services that you can use to determine the exact distance.
  2. Buy your policy through trustworthy insurance brokers: a good and professional insurance broker usually asks you for the water distance between your property and the ocean -or significant bodies of water- when you request a quote. That way both the agent and the client make sure the accurate distance is stated properly when the policy is issued.
  3. Maintain Records: Keep detailed records of measurements and communications with the insurance company and broker to ensure transparency and accuracy.
How exact does the distance have to be?

This is a good question as some people may think insurance companies need to know the exact meters and centimeters for each property, making it extremely difficult for homeowners to provide that information.  But don’t worry, most insurance companies only need to know the following:

  1. More or less than 500 meters from the Ocean*
  2. More or less than 250 meters from a lake, lagoon, river, or any significant body of water*

*Keep in mind that the distance you need to declare might vary from company, so it is important that you consult with your broker when taking out your insurance

Conclusion

Accurately declaring the distance from your property to the ocean when buying Hurricane/Severe Weather coverage is vital for ensuring the policy is adequately issued, and most importantly, to prevent your claim from being denied by the insurance company.

If you would like to request a Home Insurance quote through some of Mexico’s most reliable insurance companies, contact us.

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