One house, three policies. How coastal insurance actually stacks in Baldwin County.

When a buyer asks me what the insurance runs on a house near the water, the honest answer usually starts with a question back: which policy? On this stretch of Baldwin County, one house is often covered by three separate policies, from three different places, with three different deductibles.

None of that is a reason to walk away. It’s a reason to understand the stack before you write an offer, because the monthly number and the storm-day number are both built from it.

Here’s how the layers fit, with the public rules named so you can check them yourself.

Layer one: the homeowners policy

This is the policy most people picture. It covers fire, theft, liability and the everyday claims. On a lot of coastal houses it’s written with wind excluded, which is why the next layer exists. Read the declarations page for the word “wind” before you assume anything.

Layer two: wind

Wind coverage comes from either a private carrier that writes it or the Alabama Insurance Underwriting Association, known as AIUA. AIUA exists to give owners in Baldwin and Mobile counties a market when the private market won’t write them. Per its own published FAQ, it only covers property south of the 31st parallel in those two counties, and you can’t apply directly. An AIUA-authorized agent submits the application, and the agent has no authority to bind coverage. AIUA decides.

A few AIUA rules worth knowing, all from that FAQ:

• The dwelling must be insured to 100 percent of its value, set by a replacement-cost calculation. You don’t pick the number.
• The maximum dwelling limit went from $500,000 to $650,000 on November 1, 2025, and the personal property maximum from $250,000 to $325,000.
• Vacant property and property with pre-existing damage aren’t eligible.

AIUA also offers three wind mitigation discounts: the community’s building code grade, a home certified to the 2006 International Residential Code or later, or an IBHS FORTIFIED certificate. Only one applies per house. If the seller says the roof is FORTIFIED, ask for the certificate. The discount follows the paper, not the sales sheet.

Layer three: flood

This is the one that surprises people. AIUA states it plainly on its own site: flood is not covered under most property policies, including AIUA’s. Flood is its own policy, most often through the National Flood Insurance Program, with its own premium and its own deductible.

The federal limits are set in 44 CFR 61.6: $250,000 on the building for a single-family house and $100,000 on contents. A condominium building’s master flood policy tops out at $250,000 times the number of units.

Two things follow from that. First, if the house would cost more than $250,000 to rebuild, a federal flood policy alone leaves a gap, and it’s worth asking your agent about excess or private flood coverage. Second, AIUA’s rules require property in the high-risk A and V flood zones to carry flood insurance at least equal to the AIUA policy limits. In those zones, flood isn’t optional if wind comes from AIUA.

Timing matters too. A new federal flood policy generally takes effect 30 days after application and payment, unless it’s bought in connection with a loan at closing. Cash buyers feel that rule the most.

The deductible is the number that hurts

Premiums get all the attention. The deductible is what you actually pay on storm day.

Many coastal wind policies carry a separate hurricane deductible written as a percentage, and AIUA’s FAQ shows exactly how it works. The percentage is applied to the total insurable value of the structure, not to the AIUA limit. Their own example: a house with a $750,000 insurable value, a policy limit below that, and a 5 percent hurricane deductible. The deductible is $750,000 times 0.05, or $37,500.

Read that twice. The policy pays up to its limit, but the deductible is figured on the whole house. And if the same storm brings water in, the flood policy has its own deductible on top of that.

That doesn’t make the house a bad buy. It means the right question for a lender, a seller and yourself is, “How much cash do I need on hand after a named storm?” Put that number in the budget next to the premium.

The condo version

Condos stack differently. The association carries a master policy on the building, and your dues pay for it. You carry a unit policy, usually called an HO-6, for the inside of your unit and your belongings. Ask your agent about loss assessment coverage too, which can help if the association passes a deductible or uninsured loss through to owners. If you want the long version of how dues get spent, I wrote one on condo dues.

Before you write the offer

Five things you can do on your own this week:

1. Ask the seller for the current declarations pages on every policy: homeowners, wind and flood. Not a verbal number. The pages.
2. Look up the flood zone, and if wind would come from AIUA, have the agent confirm the territory on AIUA’s map.
3. Get quotes on all three layers for this exact address, with every deductible shown in dollars, not just percentages.
4. Ask whether the house has a FORTIFIED certificate or IRC certification, and get a copy.
5. Add the three premiums together, divide by twelve, and put that next to the mortgage payment. That’s your real housing cost.

This is a plain-English map of the public rules, not insurance or legal advice. Your carrier, your agent and the policy itself have the final word, and rules get revised, so confirm the current edition before you lean on any number here.

If you want help reading the stack on a house you’re looking at, or a second look at a renewal that changed your math, call or text me at (251) 597-5809. No pressure, just honest numbers.