House Damaged Before Closing in Florida? Hurricanes, Fires, Burst Pipes and Your Options
October 1, 2026 · 8 min read · By Onias Derilus, Broker
What happens when a storm, fire or burst pipe hits after the contract is signed? Here is how the Florida AS IS contract handles casualty loss, repairs, escrow and storm delays.
A house damaged before closing is every buyer's and seller's nightmare, and in hurricane country it is a real risk. A storm, a kitchen fire or a burst pipe can hit after both sides sign the contract but before the keys change hands. In Florida, most residential sales use contracts from Florida Realtors and The Florida Bar, and those forms spell out what happens next. This guide explains the casualty loss rules in the AS IS contract, who pays for repairs, when a buyer can walk away, and how storms can delay a closing in Palm Beach County.
Key takeaways
- Under the Florida Realtors/Florida Bar AS IS contract, the seller pays to restore casualty damage up to 1.5% of the purchase price.
- If repairs are not done by closing, 125% of the estimated cost (capped at 1.5% of the price) is held in escrow at closing.
- If restoration would cost more than 1.5% of the price, the buyer chooses: take the home as is with the 1.5%, or get the deposit back and cancel.
- A hurricane or an inability to bind insurance can extend closing up to 7 days after the event stops blocking performance. After 30 days past the closing date, either side may cancel.
- Citizens Property Insurance does not bind new coverage while a tropical storm or hurricane watch or warning is in effect for any part of Florida.
Who bears the risk if a house is damaged before closing?
Until closing, the seller still owns the home and usually still insures it. So the seller is the one who files a claim on their own policy. The contract then decides how that loss affects the sale.
Most Florida resale contracts use one of two Florida Realtors/Florida Bar forms: the standard version or the AS IS version. Both have a section of standard terms that applies unless the parties change it. This guide quotes the AS IS form, because it is common in South Florida. If your contract is different, or has an addendum, read your own copy with your agent or attorney. You can also review our overview of the Florida real estate contract.
The 1.5% casualty loss rule
The AS IS Residential Contract for Sale and Purchase covers this in its Risk of Loss standard. It applies when fire or another casualty damages the property after the effective date but before closing. The contract calls this a Casualty Loss.
When repairs cost 1.5% of the price or less
If restoration costs no more than 1.5% of the purchase price, the seller must pay for it, and the closing goes ahead. Take a $650,000 home, the August 2026 single-family median in Palm Beach County. There, 1.5% is $9,750. On a $300,000 condo, the condo median that month, it is $4,500.
The cost of restoration includes pruning or removing damaged trees. However, for tree damage from a storm or other natural event, the seller's only duty is the cost of pruning or removal.
When repairs are not finished by closing
Repairs often take longer than a closing timeline allows. In that case, the contract says a sum equal to 125% of the estimated cost to finish the work, capped at 1.5% of the price, is held in escrow at closing. If the actual cost runs higher than the escrow, the seller pays the difference, still capped at 1.5%. Any unused money goes back to the seller.
When repairs cost more than 1.5%
Bigger damage changes the deal. If restoration would cost more than 1.5% of the purchase price, the buyer must choose one of two paths:
- Take the property as is, together with the 1.5%, or
- Get the deposit back, which releases both parties from the contract.
In practice, many buyers and sellers negotiate a third path. For example, they might agree on a price cut, a larger credit or a later closing date while the seller's insurer handles the claim. Any such change should be in a written amendment signed by both sides.
The seller's duty to maintain the property
Separate from casualty loss, the AS IS contract has a maintenance clause. Except for ordinary wear and tear and casualty loss, the seller must keep the property, including the lawn, shrubs and pool, in the condition it was in on the effective date.
Before closing, the buyer can do a walk-through. The AS IS form lets the buyer confirm that personal property is still there and that the seller met the maintenance requirement and other contract duties. So if a pipe bursts the week before closing, the buyer often finds it during the walk-through. For that reason, sellers should report any damage to their agent right away rather than hope it goes unnoticed.
Hurricanes, insurance and a house damaged before closing
Storms create two separate problems. First, there is the damage itself, which falls under the casualty loss rules above. Second, there is the delay, because a storm can stop insurance, lenders and title work in their tracks.
Insurance binding freezes
Most lenders require the buyer to have homeowners insurance in place before closing. However, insurers stop writing new policies when a storm threatens. For example, Citizens Property Insurance says agents may not bind new coverage, or increase coverage, while a tropical storm or hurricane watch or warning is in effect for any part of Florida. Citizens suspended binding on July 19, 2026, for example. Private insurers often follow similar rules, so ask your agent about each carrier's policy.
A buyer who has not bound insurance before forecasters issue a watch may have to wait until the storm passes. That is why we tell buyers to bind coverage early in hurricane season, well before the closing date.
The force majeure clause
The AS IS contract also has a force majeure standard. It covers hurricanes, floods, extreme weather, fires and other events that a party cannot prevent with reasonable effort. It also covers cases where a storm or similar event disrupts the availability of services, insurance or required approvals essential to closing.
When that happens, affected deadlines, including the closing date, move out a reasonable time, up to 7 days, after the event no longer prevents performance. If the event keeps blocking performance for more than 30 days past the closing date, either party may cancel by written notice, and the buyer gets the deposit back. Our post on pushing back a closing date covers other common delays.
What sellers should do if the house is damaged before closing
- Make the home safe. Stop the water, call the fire department or shut off power as needed.
- Document everything with photos and video before cleanup starts.
- Call your insurer and open a claim. Keep your policy in force until closing.
- Tell your agent right away. They will notify the buyer's side and help you follow the contract.
- Get written repair estimates from licensed contractors, so everyone can see whether the cost is above or below 1.5%.
- Put any agreed changes, such as credits or a new closing date, in a signed amendment.
Also think ahead during hurricane season. Before a storm, take dated photos of the home's condition, secure outdoor furniture and put up shutters if you have them. Those photos make it easier to show what changed.
What buyers should do when a house is damaged before closing
As a buyer, start with your own walk-through. If you suspect damage, ask your agent to request details and estimates from the seller. Next, read the contract terms with your agent or attorney. If the repair cost is near the 1.5% line, you may want your own contractor to give an estimate.
Condo buyers have one more step. Damage to a condo unit may involve both the owner's policy and the association's master policy, depending on what the damage affects. So ask the seller and the association which policy covers the repair, and how long the association expects the work to take.
Also, keep your lender and insurer in the loop. A lender may require repairs before funding, or an updated appraisal. Similarly, your insurer may need a new inspection before it will bind coverage. Each of these can affect the timeline, so raise them early.
Frequently asked questions
Can a buyer back out if a house is damaged before closing?
Under the AS IS form, yes, if restoration would cost more than 1.5% of the purchase price. The buyer can choose to get the deposit back and cancel. Below that line, the seller pays for repairs and the sale proceeds.
Who pays when a house is damaged by a storm before closing?
Under the AS IS form's risk of loss terms, the seller pays, up to 1.5% of the price. In most cases, the seller's own insurance policy covers the claim, minus the deductible.
Does a hurricane automatically delay closing?
Not automatically. Deadlines move only when the event actually prevents performance, such as when insurance cannot be bound. In that case, the closing date can move up to 7 days after the event stops blocking performance.
What if a house is damaged before closing and repairs are not finished?
The contract allows the closing to go ahead with 125% of the estimated repair cost, capped at 1.5% of the price, held in escrow. Unused funds go back to the seller.
Should I keep my insurance until closing?
Yes. Sellers own the home until closing, so cancel your policy only after the sale closes and funds.
Sources
- Florida Realtors and The Florida Bar, AS IS Residential Contract for Sale and Purchase (ASIS-7x)
- Citizens Property Insurance, binding suspension notice, July 2026
- Miami Realtors, Palm Beach County August 2026 market report
This article is general information, not legal, tax or financial advice. Contract terms vary, so have a Florida real estate attorney review your own contract and situation.
Selling during hurricane season? Book a no-obligation listing consultation, and we will help you plan a timeline, contract terms and a storm plan that protect your sale. We work with sellers in Jupiter, Delray Beach, Riviera Beach and across Palm Beach County. Buying instead? Our agents can help you bind insurance early and close on time. Contact our team.
