Guide to homeowners insurance in coastal areas

Due to the heightened threat of storm damage, it may be difficult to find coverage in coastal areas. If that’s the case, look into your state’s FAIR Plan.

Kara McGinley

By

Kara McGinley

Kara McGinley

Property and Casualty Insurance Expert

Kara McGinley is an insurance editor at Policygenius, specializing in home, auto, and renters insurance. She's been writing about insurance since 2019, and her work and insights have been referenced in Kiplinger and WRAL.com.

Published November 10, 2021|3 min read

Policygenius content follows strict guidelines for editorial accuracy and integrity. Learn about our

editorial standards

and

how we make money.

Although homes in coastal areas offer a lot of perks — like beautiful views and seaside attractions — they also come with the increased risk of damage from tropical storms and hurricanes. Because of this, it may be difficult to find a homeowners insurance company to insure your coastal property.

If that’s the case, you may need to purchase a last-resort coverage option through your state’s Fair Access to Insurance Requirements (FAIR) Plan. Just keep in mind these policies are typically more expensive. 

Key Takeaways

  • Coastal homes typically need more comprehensive coverage than what just a standard homeowners policy offers

  • Consider purchasing separate flood and windstorm policies to insure you’re fully protected

  • If you can’t find coverage through a private insurer, you may qualify for last-resort coverage through your state’s FAIR Plan or Beach and Windstorm Plan

What type of coverage do I need for a coastal home?

Homeowners insurance excludes coverage for certain perils that coastal homes are at risk for, like flood damage, and in certain states, wind and hail damage. This means you may need to purchase other insurance policies in addition to your homeowners policy to make sure you’re fully protected. 

Below is a deeper dive into the different types of insurance policies you may want to consider for a coastal property. 

Ready to shop home insurance?

Start calculator

1. Homeowners insurance

Homeowners insurance policies protect the structure of your home, other structures on your property, and your personal belongings if they’re damaged by a covered peril. If your home is severely damaged, homeowners insurance can pay for you to stay at a hotel while it's being repaired. 

It’s recommended that you insure your home at its rebuild value, meaning the amount it would cost to rebuild your house from the ground up. 

→ Learn more about homeowners insurance

2. Flood insurance

Since homeowners insurance typically doesn’t cover flood damage, you'll want to consider purchasing a flood insurance policy. In fact, if you have a federally backed mortgage and live in a high-risk flood zone, you’ll be required to. 

But even if your lender doesn’t require flood insurance, you should still consider it for a coastal home. Most flood insurance policies are underwritten through FEMA’S National Flood Insurance Program, but you may be able to purchase private flood insurance instead. 

→ Learn more about flood insurance

3. Windstorm insurance

Homeowners insurance typically covers wind and hail damage, but insurers may exclude wind coverage if you live somewhere prone to severe windstorms, like some coastal areas. 

If wind and hail damage is excluded from your policy, you have a few options: 

  • Add windstorm coverage to your homeowners policy for an additional fee

  • Buy a wind-only policy through a specialized insurer

  • Purchase a last-resort coverage option through your state’s Beach and Windstorm Plan or FAIR Plan 

→ Learn more about windstorm insurance

3 types of deductibles for coastal homes

Home insurance deductibles are the out-of-pocket expenses you’ll need to pay before your insurance kicks in. Homes in coastal areas may have separate, special deductibles for different types of storms. 

Most states have rules around when the below deductibles are triggered. Check with your insurer about which deductibles you have and how they work.

1. Windstorm deductible: Also called a wind/hail deductible, your insurer may require you to pay this for different instances of wind and hail damage, like from a tornado windstorm. 

2. Hurricane deductible: This is typically only triggered when the National Weather Service (NWS) or National Hurricane Center (NHC) reports winds of 74 mph or greater. 

3. Named storm deductible: This is usually triggered when a tropical storm is officially declared by the NWS or NHC.

These special deductibles vary by state, [1] and they’re typically set at 1% to 5% of your dwelling coverage limit.

That means if your windstorm deductible is set at 3% and your home is insured for $400,000, you’ll have to pay $12,000 out of pocket before your insurer pays out your claim. 

What to do if you can’t find homeowners insurance for a coastal home

If you can’t find an insurance company to insure your coastal home, you may be able to get coverage through your state’s FAIR Plan. You can find a full list of states that offer FAIR Plans for coastal homes in our guide.

Seven states along the Atlantic and Gulf coasts also offer Beach and Windstorm Plans, which are designed to protect your home from hurricane and windstorm damage.

7 states that offer Beach and Windstorm Plans

  • Alabama

  • Florida

  • Mississippi

  • New York

  • North Carolina

  • South Carolina

  • Texas

FAIR Plans and Beach and Windstorm Plans are meant to be a last-resort coverage option for people who can’t get insurance through private insurance companies, and they are typically more expensive than standard homeowners insurance policies.

How comprehensive the coverage options are will depend on your state. To qualify for coverage, you may need to prove you were denied coverage from several private insurance companies a certain number of times, typically three. 

→ Learn more about FAIR Plans