As Florida braces for the possible threat of a Hurricane, we encourage you to take all necessary precautions to ready your loved ones and homes for potential impact. Additionally, suppose you are purchasing property or representing a buyer of a property set to close soon. In that case, we urge you to contact your insurance provider as quickly as possible to determine what requirements must be met to secure insurance coverage for the impending purchase.
If you have a closing approaching, your buyer must be confident that their insurance is bound. Having your insurance “Bound” means that coverage is in place, although a policy has yet to be issued. Often binding takes place through verbal agreement, in person, via email, or over the telephone; however, coverage often will not be bound until payment is tendered. Confirmation from your insurance agent needs to be obtained before binding authority is suspended; otherwise, the insurance coverage will not be available until the tropical system has passed and the suspension lifted.
Florida insurance companies are permitted to suspend the binding (the final process of securing coverage) of home insurance policies a few days before an approaching storm. They will continue not to allow securing coverage until after (even a few days after) the storm has passed. There are no set rules on when Florida home insurance companies are permitted to suspend the ability to secure coverage, and the decision is made by each company individually.
If you have any questions related to “Force Majeure,” the following blogs may be of assistance, or you can contact your real estate attorney.
- Hurricane Season: The Good, The Bad and Still Closing
- Force Majeure Clauses in Purchase and Sale Agreements
- Don’t Let Your Closing Get Blown Away
- Impact of Tropical Weather Systems on Insurance
For information on preparing your family for a significant storm, please visit the American Red Cross for information on hurricane emergency preparedness kits and evacuation plans. Click here for a link to the Red Cross article.