Can Insurance Issues Kill a Real Estate Deal?

The short answer is yes—insurance issues can absolutely create problems during a real estate transaction, especially here in the Florida Keys. In some cases, they can even prevent a deal from closing.

That’s why I believe insurance should be discussed early in the buying process, not a few days before closing.

Insurance Can Affect Financing

If you're financing a home, your lender will generally require certain insurance coverage before they will fund the loan. If the property is difficult or extremely expensive to insure, it can affect the buyer's ability to qualify.

A home may fit your purchase budget, but the total monthly cost can look very different once insurance is added.

The Roof Matters

The age and condition of the roof can have a major impact on insurability. Buyers should understand the roof's age, permit history and remaining useful life.

A roof that looks perfectly fine may still create an insurance issue because of its age or documentation.

Wind Mitigation Can Make a Difference

Impact windows, shutters, roof-to-wall connections and other wind-resistant features may affect both insurance eligibility and premiums.

A wind mitigation inspection can provide valuable information about the home's construction and available insurance credits.

Flood Insurance Is Another Consideration

Flood insurance is an important part of owning property in the Florida Keys. The property's flood zone, elevation and other factors can affect the coverage required and what it costs.

Two homes located fairly close to each other can sometimes have very different insurance situations.

Don't Wait Until the Last Minute

One of the biggest mistakes a buyer can make is waiting until the end of the inspection period to start looking at insurance.

I prefer to get insurance professionals involved early. If there's a problem, it's much better to know while you still have time to investigate your options and make an informed decision.

Sellers Should Pay Attention Too

Insurance isn't only a buyer issue. If you're preparing to sell, knowing whether your roof, shutters, permits or other property features could create an insurance problem gives you an opportunity to address it before you're under contract.

Preparation Can Keep a Deal Together

Insurance issues don't automatically mean a transaction is doomed. Many problems can be worked through when they're discovered early and the right professionals are involved.

The key is not to treat insurance as an afterthought. In the Florida Keys, it's an important part of determining whether a property truly works for a buyer—and whether the transaction can make it all the way to the closing table.