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How to Get the French to Subsidize Your Island Adventure

When a storm hits your beach, what can you do?

They say this year's hurricane season could be the worst on record. Certainly, it got off to a destructive start. So, would I still recommend buying a house in the tropics? Yes. Powerful storms are not a new phenomenon. People who grow up in and others who are drawn to this part of the world are old hands at weathering a tropical storm. For with sunshine and white sand can often come the tropical weather systems that bear hurricanes.

As I mentioned yesterday, even dips in real estate prices due to hurricane damage are short-lived because the majority of buyers are aware that hurricanes regularly hit most places in the Caribbean.

Guadeloupe is hit by a tropical storm or hurricane on an average of once every 3.49 years. Martinique is hit every 3.09 years. Miami is hit every 2.67 years. But that's an average--before Dean last month, Guadeloupe was previously hit in 1999 when Tropical Storm Lenny brushed by with 70-mile-an-hour winds. Martinique last suffered severe storm damage in 1979, when it was hit by David, a Category 4 hurricane.

But the real estate market remains strong in places like Guadeloupe and Martinique because it's easy to avoid buying property in storm-prone areas. Plus, thanks to subsidies from the French government (as Guadeloupe and Martinique are overseas departments of France), hurricane insurance is cheap.

Homeowners can buy insurance against Category 1 and Category 2 storms for a minimal amount--about 1,500 euro ($2,100) a year for a 1.5 million euro ($2.1 million) property. Anyone who has commercial coverage is then entitled to government insurance for hurricanes of higher categories. In practice, the government also reimburses property owners who don't have commercial insurance. That's what's expected to happen in the case of Hurricane Dean. (There would be a public outcry if the government did otherwise.)

Areas along the coast are rated according to their vulnerability to tropical storms. To look up the vulnerability rating of an area you're considering for a real estate purchase, you can consult the local government or ask your notaire.

Don Ediger

For International Living

P.S. For the past year, I've been researching the real estate markets of my 10 favorite countries and island nations: The Bahamas, Belize, Costa Rica, The Dominican Republic, Guadeloupe and Martinique, Guatemala, Honduras, Mexico, Nicaragua, and Panama. I discovered that you can buy a house in the sun in these destinations for less than $100,000…sometimes a lot less. I put everything I learned in "Your Own Second Home in the Sun," a new book published by IL. As part of a special introductory offer, if you use this link to order your copy of "Your Own Second Home in the Sun," you get a 15% discount and a free special report, How to Own Your Own Private Island.