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Impact of Sea-Level Rise (SLR) on Coastal Homes

By Dez Duran-Lamanilao

Sea-level rise (SLR) implications for coastal regions continuously pose as a threat to the real estate industry. These may refer to disruption in the daily life of not just the people living along the coast but also of the whole coastal and marine ecosystems, animal extinction, shore erosion, wetland flooding, and from a financial perspective, possible huge losses. Developers stand to lose profits and property owners who are leasing their homes face the risk of having to pay for costly repairs and higher mortgage fees.

Image source: NOAA

 Causes of sea-level rise

An article from the journal Science reveals the two main causes of sea-level rise: increase in ocean thermal expansion and melting of glaciers and small ice caps in the recent decades, most notably during the 1990s. Increased heat brought about by climate change has caused ice loss from Greenland and West Antarctica.

Extent of sea-level rise

According to NOAA’s Arctic Report Card, the Arctic is experiencing a rise in temperature at two times the rate of the world and in 2017, scientists have observed a new record low for the maximum sea ice extent. The figure has so far been the largest magnitude decline in sea ice in 1,500 years.

You can use the NOOA Office for Coastal Management’s web mapping tool if you want to visualize the effects at community-level from coastal flooding or SLR, which may reach up to six feet above average high tides.

Impact on US Coastal Homes

A recent study reveals that more than 300,000 coastal homes face the risk of flooding every two weeks within the next 30 years. The Union of Concerned Scientists warns that if left unresolved, these properties will become inhabitable by 2045.

And for the real estate industry, this would mean possible collapse of the mortgage value when investors begin to be wary of properties in these areas. Freddie Mac’s chief economist explained the possibility of properties becoming uninsurable and unmarketable and insurers eventually incurring losses if property owners decide to default on their mortgages, especially if their homes are already underwater. Thus, the importance of having a comprehensive insurance plan that will both protect your needs and those of your insurer as well should any of these possibilities happen.

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Climate Change Impact on Real Estate Properties

By Dez Duran-Lamanilao

Image source: WXXI News

The effects of climate change in the US has been the subject of debates and discussions by experts, environmentalists, and ordinary citizens for years now. The National Climate Assessment report, which was directed by a 60-member Federal Advisory Committee, reveals that the US average temperature has grown by 1.3 to 1.9 degrees Fahrenheit since 1895, with most of the increase happening in 1970. As a result, Americans have become aware of how climate change could impact US real estate prices, given the continuous rise in sea-level over the years.

This threat creates bigger issues for waterfront real estate properties. In fact, a 2015 study from the University of North Carolina Wilmington found that oceanfront property values in the US could decrease if federal subsidies were removed. Higher insurance costs and surges in property values will obviously follow.

A study using data from Zillow, while still under peer review, found that properties exposed to increasing sea levels sell at a 7 percent discount to comparable properties that are not exposed to climate-related risk. In Alabama for example, a wide range of impacts of climate change have been observed, as outlined in the website of Sierra Club – Alabama Chapter, in terms of temperature, heat and wildfire, drought and precipitation, agriculture and farming, forestry and ecosystems, and sea level rise and coastal flooding.

More wildfires, unforeseen calamities and floods are expected to worsen the situation, so real estate developers and property owners alike are continuously finding ways to deal with this looming scenario. If you are a shoreline owner, you can start taking precautionary steps to avoid the possible losses associated with calamities brought about by climate change. Keeping the surrounding area of the property as natural as possible, maintaining and taking care of your property’s health and biodiversity, and managing pests to prevent the occurrence of diseases are just a few examples.

Finally, do not wait for catastrophic events to happen before you consider protecting your property, whether you intend to sell it in the future, rent it out or just simply keep it. Talk to an expert that specializes in writing high risk coastal properties, so you can secure the best insurance coverage there is.

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Taking Care of Your Coastal Environment

By Dez Duran-Lamanilao

With the issue of climate change and the warning it poses to the world in general, it comes as no surprise that environmental activists are trying to ensure that their campaigns reach the right people. The Alabama Coastal Foundation (ACF), for one, has been working to find solutions to the state’s coastal environmental challenges since 1993. If you are living in a coastal area in Alabama, taking care of your coastal environment can help prevent the likely damaging impact of climate change.

Here are a few tips you can do to make a difference:

  1. Be conscious of how you use energy, whether it is by how you use your car or what types of bulbs you use at home, or your preferred temperature setting for your furnace or air-conditioner.
  2. Both public and private entities are one in minimizing the use of plastics because for one, they are a huge source of ocean debris, thus, is a great threat to marine life. Use other alternatives to plastics as much as possible.
  3. Coastal living is something most people in the city dream about. One of the benefits is being able to stroll along the beach and relax anytime you feel the need to. Always clean as you go and remember that there is another life other than you that depends on the ocean to live.
  4. Do a regular maintenance of your home or if you are unable to do so, seek the services of property management firms especially if you are renting out your home. Their expertise will help you determine what areas in your property need further protection.

Research studies have proven the likely correlation between living along the coast and health, noting an increase in one’s mental health among people who live by the water. And while you are busy with your daily activities and responsibilities, don’t forget to get a credible coverage for your home to protect it from likely damages that may arise in a coastal environment.



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Condominium Unit Owners: Knowing Your Rights and Responsibilities

By Dez Duran-Lamanilao

Image source: VRBO

Thinking of purchasing a condominium unit along the Gulf Coast? Or need guidance in managing your current property? Whichever it is, condominium unit owners should bear in mind that while they can exercise their rights as owners, they also have responsibilities not just to their tenants if they are renting out their property, but to the whole community as well.

Let’s start first with the costs of maintaining a condominium unit. The monthly dues will usually include insurance on the unit, sewer and waste management, regular maintenance, and utilities, which account for most of the monthly costs. The owner should make sure that these are paid on time to avoid the risks of more damages should unforeseen events happen.

If you are renting out your property, you have the right to demand from the renters to treat the unit with care and you can set out limitations in your contract, so everything falls in its proper place. If you want greater protection, you can choose to purchase an optional contents policy to protect yourself from any future damage caused by your renter(s), accidents that may bring harm to your renters, and outages.

As a condominium owner, you own a share of the common elements in the whole building itself, such as parking lot, pools, tennis courts, playground, hallways, and many others. The condominium association should ensure that roofs, elevators, and other building elements are immediately restored if defective or damaged, or are undergoing regular maintenance, for the protection of both the owners and renters.

While living in a condominium would give you instant access to security, building facilities and other privileges given to owners, you should be responsible enough in making sure that you are not disturbing your neighbors. Avoid hosting late night parties, dragging chairs or furniture in the middle of the night, owning a large or barking pet, and well, arguing in a loud manner with household members. Bear in mind that your neighbors are just a few meters away and would probably love (or hate) being involved with your domestic issues.

Finally, as a condominium owner, you should have access to important documents, be spared from discrimination in relation to age, sex, race, etc., and be able to practice your role and right to elect directors to the association’s board. Everything too much to handle? Consider getting the advice of a professional so you’ll know when and how to set things in motion.

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Sewer Backup Coverage: Deciding If It’s Worth It

By Dez Duran-Lamanilao

When water overflows in a house, this means that the sewer has been blocked, and that non-stop rainfall or poor plumbing system may have caused it. When water emerges from your pipes, expect possible damage to the property. If you are renting out your property, there may be a bigger need to consider having sewer backup coverage. Let’s find out if it will be worth your investment. After all, having unnecessary additions to your policy might lessen the opportunity of spending your savings on more worthy causes.

Image source: FS Local Blog

Keep in mind that flood insurance does not usually cover sewer backups, and the homeowner must either buy it separately or request for an endorsement to an existing policy. Some of the main causes of sewer backups include:

  • Aging sewage systems – may depend on several factors such as materials used, how the pipes are installed, or if the property is near or located in flood-prone areas, or exposed to chemicals and other harmful substances
  • Storm water and raw sewage systems combined into the same pipeline
  • Blockages due to plant roots, shrubs, and trees; these can penetrate the sewer system and cause extensive damage
  • Water in basement or lower floors
  • A major rainstorm

With these factors in mind, evaluate the location of your property. Is it near trees or flood-prone areas? How old is your sewer system? On average, sewer systems in the US are over 30 years old. This contributes to increased sewer backups, backflows, and floods. Better yet, ask a plumbing expert to inspect your pipes if you think something is blocking the flow of water and to make an informed suggestion about your piping system.

Even if your property is located on top of a hill, this does not mean that it is already immune to sewer backup problems. Take time to evaluate your sewer backup rider. Compare costs and make sure that the amount you need to pay is not excessive, nor it is too cheap. If it is too low, chances are the restrictions are too many or the conditions may be difficult to meet if it is time to make a claim. Lessen the risks associated with sewer backups. Remember that your decision will impact not just your pocket, but the individuals living in your property as well.

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Protecting and Managing Coastal Properties

What are considered high-risk coastal properties? These are locations that are most susceptible to catastrophes and natural hazards. When left uninsured, they could pose huge amount of expenses to owners and renters as well, should a calamity strikes.

Image Source: Gulf Shores & Orange Beach

According to the May 2016 report “Residual Market Property Plans” by the Insurance Information Institute (I.I.I.), the exposure value of the residual property market in states that are more exposed to hurricanes has continued to decline from its peak levels in 2011. State natural catastrophe programs in various states including Alabama, California, Florida, North and South Carolina, Louisiana, Mississippi, New Jersey and Texas were reviewed in the report. There is a supposed perceived threat for state finances, policyholders, and taxpayers that might result from underpriced coverage and increased assessments in the coming years.

What does this mean for coastal property owners?

As the report warns, there may be a reduction in growth opportunities for carriers and choice if you are a policyholder or a possible distortion in the true cost of insurance coverage.

The Coastal Resources Commission (CRC) implements rules allowing property owners to protect imminently threatened oceanfront structures on a temporary basis. The following options are available for property owners:

  • Do note that a Coastal Area Management Act (CAMA) general permit is needed to use sandbags.
  • Beach bulldozing to shore up the foundation of a building
  • Relocation of structures
  • Beach nourishment projects that are dependent on specific conditions
  • Exceptional cases where seawalls are permitted, provided that they do not adversely impact adjacent private properties and resources

Managing a coastal property may unnecessarily consume an owner’s time and money. To avoid huge expenses and damages to property, it is important to work with an insurer that has an excellent reputation for providing yearly insurance coverage. Whitehaven’s commendable record of writing high-risk coastal properties since 1994 proves the company’s ability to help you in the effective management of your property from unforeseen calamities.

By Dez Duran-Lamanilao

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Earthquake Coverage | Residential and Commercial Property Insurance

By Dez Duran-Lamanilao

Image source: IBHS

While most of the earthquakes that happen in the US yearly are relatively small, owners of residential and commercial properties that are near geological fault lines or are quake-prone should consider buying a separate coverage for earthquake protection. According to the US Geological Survey (USGS), the states that have the highest risk of experiencing a damaging earthquake in the next 50 years include California, Alaska, Illinois, Utah, Washington, and Hawaii, among many others.

*Even though Alabama is not one of those states, we realize that you may have a vacation home or may possibly relocate to one of these locations in the future. We want you to have the best information possible on type of insurance offered throughout the US.

Deductibles for earthquake insurance may range between two percent and by as much as 20 percent of the building’s value, depending on several factors, including location, age, cost to rebuild the building or home, and the property’s condition. From an overall perspective, earthquake insurance can be quite expensive. You can either opt to buy a separate policy or via an endorsement, which means a written change to your existing policy to add a coverage.

Generally, an earthquake policy will cover repairs needed due to damage. This includes your inventory, or depending on the extent of coverage, may even include business losses arising from the damage. It also covers costs related to debris removal. In some cases, an additional living allowance is provided so the homeowner can find another place to stay while repairs are ongoing. Exclusions to a policy include fire, land, vehicles, or pre-existing damage.

What are the risks an earthquake poses to your property? They may include:

  • Partial or total building destruction
  • Collapse of one or more areas of the property
  • Structural damage
  • Explosions
  • Gas leaks which may lead to fires
  • Landslides
  • Flash floods

The National Association of Insurance Commissioners (NAIC) suggests the following tips for earthquake insurance:

  • Create a detailed inventory of each valuable and take pictures/videos for better documentation.
  • Review and update your inventory regularly especially if you have recently purchased expensive items.
  • If you are filing a claim, cooperate fully with the investigation so the adjuster can make accurate evaluations.
  • Make sure that a qualified professional inspects your home after a quake so both cosmetic and structural damage can be verified.
  • If there are disagreements with your insurer, try to resolve it in a more peaceful manner. Experts recommend bringing your contractor during discussions to get professional advice.

If your property is along the Gulf Coast and you want to know the current insurance conditions in your area, you may get in touch with an agency that specializes in writing high-risk coastal properties so you can take the first steps in protecting your property from earthquakes.


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How to Protect Your Property From Coastal Erosion

By Dez Duran-Lamanilao

Image source: SBS

One of the biggest risks coastal properties face is coastal erosion, which results in the shoreline moving toward the land as cliffs are pulled back or as beach and dune systems change locations. When this occurs, roads, residential and commercial buildings, and other coastal infrastructures run the risk of being damaged or in worst cases, even destroyed.

While coastal erosion is a natural process, the fact remains that it poses a threat and may result to economic losses. In the US, coastal erosion contributes to around $500 million yearly in coastal property loss. The US Climate Resilience Toolkit outlines some of the most popular non-structural methods for controlling erosion. The reason why states are shifting toward non-structural alternatives is because structural solutions may affect natural water currents and may deter beach replenishment in the process.

The non-structural strategies mentioned include:

  • Beach replenishment – dredging of sand from offshore and dumping it on the beach so the latter is protected
  • Dune protection and improvement – will absorb the impact of storm surge and high waves, thus delaying or forestalling the flooding of inland areas
  • Wetland protection: A study that appeared in the “Journal of Environmental Economics and Management” tried to place a value on wetlands for their part in reducing wind damage to property resulting from diminished storm intensities.
  • Habitat restoration – protects and depending on the condition, restores the ecosystems and habitats in the environment
  • Structure relocation and debris removal: There may be cases that would require the relocation of your property. This is especially true for houses that are built on minimum required setbacks, since these do not provide enough protection from damage and loss because of erosion. Note that permits are required for this solution.
  • Use of dredged material for beach nourishment: They can be replaced into beach zones to improve or create new beaches and recreational spaces. Beach nourishment is quite popular along the ocean costs since good quality beach sand is usually hard to find.
  • Sandbags – for temporary protection while the owners are seeking for more permanent solutions

Having a better understanding of coastal erosion is the key in protecting your property from the damages inflicted by such. Talk to an expert and find out if your structure faces imminent threats so you can act fast before the soil even begins to erode.

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Getting Insurance for Your Second Home | Vacation Home Insurance

By Dez Duran-Lamanilao

Image source: Zillow

Whether you are leasing your second home to seasonal travelers or keeps it exclusively for family use, there is always the risk of damage or loss from natural calamities, theft, and other unforeseen incidents or disasters. If you belong to the cautious group of homeowners, these threats may be enough to justify buying a second insurance for your vacation home.

What are the factors to consider when getting insurance for your second home?

  1. Check first your primary home insurance policy. Ask your insurer if the existing policy can cover a second home. Otherwise, you will have to purchase another insurance.
  2. If you are renting your home, consider a comprehensive insurance policy that will protect your property from fire, hailstorm, and any other catastrophe. The best way to deal with this is to determine first the risks to your home.
  3. Verify how much you need to spend if you add personal liability coverage. This will help minimize the costs if you are sued by someone following injuries obtained within your property.
  4. Be specific on what you want to insure. Second homes are usually covered by a more restricted type of policy called “named perils,” which means incidents not indicated in the list will likely not be covered.
  5. Note that vacation or second homes tend to be more expensive to insure because they are either located in an earthquake- or flood-prone (waterfront) area or would normally feature special amenities such as pools and hot tubs.
  6. Never misrepresent facts when talking to your insurer. This may delay or void your rights when you make claims in the future. The savings you are hoping to get will not be worth the risk.
  7. Ask your agent about a personal umbrella policy (PUP) for greater liability protection. However, PUPs generally cover incidents related to personal negligence. For vacation rental activities, a specific umbrella (commercial) will be required.

Before the family gets busy preparing for that much-needed vacation, check with your insurer your available options if you wish to insure your second home. Protect your investment. Call an agent now.

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7 Maintenance Tips to Prevent Major Roof Repairs

By Dez Duran-Lamanilao

The roof is what makes any structure, whether a residential or commercial one, functioning. Aside from enclosing the whole space, it is every building’s first line of defense against the sun, rain, snow, natural calamities, and even fire. With the recent onslaught of hurricanes in the past weeks, one cannot argue against the value of keeping the roof regularly maintained.

While there will always be costs involved when you decide to schedule a roof maintenance, there are ways to make the most out of your budget without sacrificing the protection you need for your home. Here are some tips that will help reduce the dent in your pocket caused by leaking or damaged roofs:

  1. Use high-quality roofing materials. Roofs represent around 5 to 8 percent of capital building costs. Remember though, that they cover 100% of your house and thus should never be taken for granted.

There are many types of roofing materials to choose from, depending on what you are willing to invest in, but be sure to choose roofing with the highest fire rating (Class A):

  • Asphalt roofing – the most popular type; made of fiberglass and relatively easy to install; can last for 30 years or more but are not recommended for places that are prone to high winds.
  • Fake slate roofing – made of various materials such as plastic/polymer, clay, rubber or asphalt; can provide aesthetic value to your home since they look like actual slates, but may be less durable and thus have shorter lifespan.
  • Metal roofing – comes in a range of options: steel, copper, aluminum, and alloy strips; also easy to install and are ultra-light but can be noisy during a rainstorm.
  1. Check for missing or curled shingles and examine flashings, chimneys and roof valleys; look for cracks in vents. Cracks in the walls may also signal cracks in the roofing/flashing. Often these minor issues cause the biggest problems in the end if left unattended.
  2. Keep gutters and downspouts free from leaves and all kinds of debris.
  3. Monitor the most common issues resulting from poor workmanship and poor adhesion such as lifting at laps, cracking, and deterioration.
  4. Watch out for any signs of accumulation in moss. A roof moss can lead to leaks, mold growth and increased collection of debris. Start trimming your trees and getting rid of other organic junk, since they provide the needed nutrients for moss to grow.
  5. Ensure proper ventilation and insulation especially if your house has an attic; this can help in the prevention of leaks.
  6. Perform regular maintenance, including insect or pest control. This is one of the most important aspects of taking care of your roof, and in most cases, also one of the most ignored ones. Neglect is most often the culprit for damaged roofs. Roof inspection and maintenance should happen at least two times yearly, preferably after the roofs have passed through the severest levels of stress.

If you have already determined that you need to have your roof professionally maintained or repaired:

  • Ensure that only qualified personnel maintain your roof. Professional roofers have the expertise you normally will not find otherwise. They can also give the best advice, having been exposed to varying problems related to roofs.
  • Monitor the progress of the repair. Aside from learning the basics of how your roofs are structured and installed, there is an assurance that the work will not be rushed and will be completed according to your expectations.
  • Ask what materials they intend to use and if there are other alternatives. Furthermore, ask them to explain the advantages and disadvantages of each option. Careful decision-making is the key to ensuring that the repair does not happen again soon.
  • Make sure to request for and witness actual roof testing. This involves checking if there are really no more water leaks and examining the durability of the new materials that have been added to the structure.
  • Do not forget to take a set of “before” photos of your roof and update them after every repair or maintenance. Do the same when damages occur. Keep all estimates, invoices and receipts. Doing all this will reduce the hassles normally associated with insurance claims processes.

After the catastrophe caused by Hurricanes Harvey and Irma, this might be the best time to schedule an inspection of your roof to ensure that it has not become vulnerable to both internal and external elements. An ounce of pension is always worth a pound of repair.