What Is Coastal Home Insurance and Who Needs It?

If you need full-coverage insurance for a home near the beach, coastal home insurance might be a good fit.

Taylor Milam-Samuel
Taylor Milam-Samuel
  • 8+ years writing for major outlets, including MarketWatch and Business Insider

  • Master’s in Education

Taylor Mlam-Samuel is a personal finance writer and credentialed educator. When she’s not helping readers better save and spend money, she can be found teaching.

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Chris Schafer
Edited byChris Schafer
Chris Schafer
Chris SchaferSenior Editor
  • 15+ years in content creation

  • 7+ years in business and financial services content

Chris is a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more.

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Updated March 24, 2023

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If you have a difficult-to-insure home near the beach or coastline, coastal home insurance might be right for you. Homes near the coast are typically at higher risk of damage from storms, and some insurers aren’t willing to cover coastal properties. Here’s a more in-depth look at this unique type of insurance that can give you the coverage you need for your coastal home.

What is coastal home insurance?

Coastal home insurance is a full-coverage insurance policy that homeowners use as their standard home insurance.[1] It’s a primary policy, unlike flood and earthquake coverage, which are add-on policies that supplement your standard homeowners insurance. Coastal properties can be harder to insure because they’re usually at much higher risk for damage from natural causes like wind, flooding, storm surge, and — for beachfront homes — erosion.

Even though coastal insurance is for beachfront houses, it functions similarly to standard homeowners insurance. The only difference? It’s for hard-to-insure homes on the coast. But just like other policies, coastal insurance doesn’t cover floods, earthquakes, or windstorms, in some cases. So you might still need additional policies to ensure you’re adequately protected.

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What does coastal home insurance cover?

Coastal insurance policies are similar to standard home insurance policies. They usually include coverage for the dwelling, personal property, other structures, loss of use, personal liability, and medical payments.

But it’s always essential to understand the details of your coastal insurance policy — especially what it doesn’t cover.

What doesn’t coastal home insurance cover?

Coastal home insurance doesn’t cover floods. Depending on your policy, it may or may not include windstorm coverage as well. Because of that, you might need to add extra policies to ensure your home is adequately covered.

You can purchase flood insurance underwritten by the National Flood Insurance Program (NFIP), a government-backed agency. Or you can buy flood insurance from a private company. With a beachfront property, your choices might be limited based on which company can provide a policy.

Windstorm coverage options for coastal properties vary by state. You can purchase private windstorm insurance, or you may need to purchase it through a state agency. But, similar to flood insurance from the NFIP, you can work with your current provider to add the policy.

In Texas, for example, homeowners insurance doesn’t cover wind and hail damage for homes on the Texas coast or in Harris County on Galveston Bay. To get coverage, homeowners must get a Texas Windstorm Insurance Association policy.

Learn More: How to Find Out if You Live in a Flood Zone

How much does coastal home insurance cost?

Coastal home insurance rates vary depending on the size of the home, location, and other information about the property. But in general, it’s more expensive than standard home insurance.

Deductibles also work differently with coastal home insurance.

Standard home insurance has one deductible, a fixed amount that usually ranges from $200 to $2,000. But coastal home insurance has multiple deductibles of different amounts. These amounts equate to a percentage of your dwelling coverage limit, usually 1% to 10%.

For example, your policy might state that it has a 5% deductible for damage from hurricanes or named storms. If your house is covered for $500,000, you’d be responsible for paying $25,000 in the event of hurricane damage.

Deductible Definition

When you file an insurance claim, the deductible is the amount you’ll have to pay out of pocket before insurance begins to pay for a covered event.

Who needs coastal home insurance?

Whether you need coastal insurance depends on the location of your home and whether you can find coverage from a standard provider. If you live on the coast and can’t find traditional coverage, you might need coastal insurance.

Coastal insurance is common in states like Alabama, California, Connecticut, Delaware, Florida, Georgia, Hawaii, Louisiana, and Texas.[1] 

Where can you get coastal insurance for your home?

Coastal insurance is available through some private insurance providers, but many companies don’t insure homes near the ocean due to the increased risk of damage.

If you can’t find insurance through a private provider, you might be able to get insured through your state’s FAIR Plan.[2]

State governments manage the FAIR Plans for their state, but private insurance companies fund each plan. The program aims to provide home insurance coverage for houses considered uninsurable by other companies — houses near the beach often fall into that category. You can check for details about the FAIR Plan in your state.

Coastal home insurance pros and cons

Coastal home insurance has unique perks, like knowing your hard-to-insure home is adequately protected. But there are potential downsides too. Here’s what you should consider.

Pros
  • Comprehensive coverage in a single policy: Coastal home insurance takes the place of a standard insurance policy and isn’t an add-on to existing coverage, which can simplify the process.

  • Designed for your home type: It can be stressful not knowing if you’re adequately insured for your most significant asset. With coastal home insurance, you know that you have the right coverage.

Cons
  • Usually more expensive: If your home is in an area requiring coastal insurance, then it’s likely to be at an increased risk for damage. As a result, coastal insurance usually costs more.

  • You may still need to add other policies: Like all homeowners insurance, there are potential gaps in coverage with coastal home insurance. Floods and earthquakes aren’t covered and will require you to add supplemental coverage.

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Coastal home insurance FAQs

Understanding the ins and outs of coastal home insurance can be challenging. Here are answers to some frequently asked questions.

  • Is coastal home insurance required?

    Homeowners insurance, including coastal home insurance, isn’t legally required. But it’s wise to protect your home and finances with home insurance. Plus, if you have a mortgage or home equity loan, your lender will likely require it.

  • What type of insurance do you need for a beach house?

    You’ll likely need coastal home insurance as your primary policy if you have a beach house. And you’ll probably need to add supplemental policies for flooding and earthquakes. There’s also a chance that you’ll want increased coverage for windstorms, depending on the details of your policy.

  • Is coastal home insurance more expensive than regular home insurance?

    Coastal houses are usually more expensive to insure because damage from a natural disaster is more likely. This is also why some insurance companies won’t insure coastal homes and why those that do often charge a higher premium.

  • Does coastal home insurance cover flooding?

    Coastal home insurance doesn’t cover flood damage. For flood coverage, you’ll need to add a separate flood policy. The government-run National Flood Insurance Program underwrites most flood insurance policies, but you can also purchase them directly from your home insurance provider or agent.

  • What are the best insurance companies that offer coastal home insurance?

    Your location is the number one factor determining the best company for coastal home insurance. High-risk providers vary from state to state.

    Start by shopping around with providers in your state. If you have difficulty finding an insurer for your home, you can get quotes from companies that provide insurance for high-risk homes. Next, compare your selections to the FAIR Plan in your state. If you can’t find a provider, you can start your search with the FAIR Plan.

Sources

  1. Insurance Information Institute. "What if I can't get coverage?."
  2. California Deptartment of Insurance. "Top Ten Tips for Finding Residential Insurance."
Taylor Milam-Samuel
Taylor Milam-Samuel

Taylor Milam-Samuel is a writer and credentialed educator who is fascinated by how people earn, save, and spend their money. When she's not researching financial terms and conditions, she can be found in the classroom teaching.

Chris Schafer
Edited byChris SchaferSenior Editor
Chris Schafer
Chris SchaferSenior Editor
  • 15+ years in content creation

  • 7+ years in business and financial services content

Chris is a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more.

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