Owning a waterfront property is a dream for many. The lakeside or seaside has a unique allure, from stunning natural views, relaxation on the shore, or hours of leisure on the deck of a boat. It also comes with unique liabilities.
Muller Insurance is an independent agency with over 100 years of experience in the insurance industry, serving New Jersey, New York, Connecticut, Pennsylvania, Nevada, and other states. Here, we offer a guide to all the hidden risks and challenges to consider when purchasing high-value home insurance for shore properties.
Why Invest in Waterfront Properties?
Shore properties offer ample appeal. Whether located by the sea, a river, or a tranquil lake, these properties present charming aesthetics and a unique lifestyle that many people find desirable. Due to high demand and limited supply, they also stand out as excellent long-term investments. Here are just a few reasons homeowners invest in waterfront property:
- Convenient access to activities such as swimming, fishing, and boating
- Beautiful environments full of picture-worthy views
- A relaxing, rejuvenating atmosphere with plenty of privacy
- High value that stays resilient through real estate market downturns
- Robust appreciation for significant gains on resale
These advantages are accompanied by unique obstacles, especially when it comes to insurance. With research and preparation, however, the challenges of waterfront ownership need not outweigh the rewards. Purchasing the right insurance policies can allow you to enjoy your property with minimal risk and stress, providing peace of mind that your investment will be safe.
Precautions Against Environmental Hazards
Though waterfront environments offer plenty of appeal, they also come with special risks. Proximity to water makes a home vulnerable to erosion and floods. Flooding is among the most common natural disasters – and incredibly destructive.
If your waterfront home is near the ocean, it is exposed to other environmental vulnerabilities, as well. Seaside properties are often subject to tropical storms and hurricanes. Storm intensity is increasing due to climate change. In addition, erosion can wear down chunks of shoreline, sometimes without warning.
Standard condo and home insurance policies do not cover damages caused by flooding. You will need to purchase additional flood insurance to fully protect your property – in fact, many flood regions require it. Even if your region does not, flood insurance is still a worthwhile investment when living on the waterfront.
Protecting Your Property Investment While Renting It Out
Many owners do not use their waterfront property as their primary residence. It acts instead as a vacation home or getaway. While the owner is not using the property, renting it out can be a great way to gain extra value. Vacation renters will often pay high prices to stay at a beach or lakefront residence where they can have direct access to water activities and views. In return, the property generates a passive income for the owner.
Rental properties, however, come with their own insurance challenges. Most homeowner’s policies will not cover damages to a property occupied by a tenant. For that, you need additional tenant-occupied dwelling insurance. This will protect your property, and your personal belongings, if they are damaged while being used by a renter. It will also cover lost rent if the property becomes unlivable after a disaster.
Accounting for Unique Liabilities of Waterfront Properties
The option to dock a watercraft is a popular reason to purchase waterfront property. Recreational vehicles, however, come with additional risks. Sudden engine failure can leave you stranded. If your boat becomes unmoored and destroys another homeowner’s dock, you may incur a lawsuit.
Boat, motorcycle, and RV insurance can protect your boat or Jet Ski. This specialized policy will cover emergency on-water towing when you become stranded. In case of an accident, it pays for loss replacement for your craft, fishing equipment, and personal effects, in addition to medical payments for injured operators and passengers. It also covers property damage liability for crashes and fuel spills.
Rental properties also come with liabilities. Guests who get hurt while staying at your beachfront residence can hold you legally accountable. Even if you choose not to rent, vacation properties are a liability risk.
Protect Your High-Value Home With the Right Insurance
When insuring something as valuable as a waterfront home, it’s essential to work with an independent agent. Muller Insurance has been independent for over a century. We work with 25 different providers, including Neptune, Wright, and Selective, alongside other top names like Chubb, Lemonade, Travelers, and Farmers. This allows us to compare multiple packages and offer our customers the best value.
Based in Hoboken, NJ, Muller Insurance is licensed in more than 30 states across the nation. To learn more about our high-value home insurance policies or to request a quote, contact us through our ready-to-fill form or by calling 201-659-2403.
