One “Box” Does not Fit All- Insurance Binding Suspensions
Florida’s amazing weather and beautiful beaches bring tourists and new residents alike. However, at times our tropical oasis is threatened and possibly impacted by tropical storms and hurricanes. When a tropical storm or hurricane threatens Florida, insurance companies can suspend the binding of new policies. So, during hurricane season, which runs from June 1 through November 30, it is wise to bind your insurance as early as possible when purchasing a new home.
Each insurance company has its own rules as to when it will suspend the binding of insurance coverage. Some rely on a box method, meaning they draw a box around and beyond the borders of Florida and if a tropical storm or hurricane enters the predetermined box, they suspend coverage. Companies can create their own box borders, so one box does not fit all insurance companies. An example of a storm box from one insurance company can be found at:
Other companies such as Citizen’s, Florida’s largest Hurricane insurer, utilize a rule that relies on the warnings and watches issued by the National Weather Service when suspending the binding of insurance. Citizen’s requires that, “No application for new coverage or endorsement for increased coverage may be bound, written or issued, or monies received, regardless of effective date, when a tropical storm or hurricane watch or warning has been issued by the National Weather Service for any part of the State of Florida.”
You can check the status of any binding suspensions by Citizen’s by following this link. https://www.citizensfla.com/binding-alerts
Should a buyer be unable to bind their insurance due to a named storm the current version of the FAR BAR Residential contracts provides for an extension of the Closing Date in Paragraph 5 and Standard G.