The Atlantic hurricane season runs from June 1 through November 30
In the wake of last year’s hurricane Matthew, now is a great time for rental investors to review their insurance coverage before it’s too late. Typical hurricane seasons average 11 named storms. This year they are predicting between 15 to 18 tropical storms and hurricanes to form on the Atlantic, Gulf of Mexico and Caribbean side with the possibility that 3 to 5 will become major hurricanes.
An increased possibility of a major hurricane can put your investment properties at risk. While there are some practical measures you can take to protect your properties – which we will discuss in another upcoming article – having proper hurricane insurance coverage is essential.
Landlords, You Must First Have a Landlord Insurance Policy
Before we even discuss hurricane property damage insurance, you need to start with the right policy. If you as the owner are not living in the insured property, you will need to have a Landlords Insurance Policy. Standard insurance policies do not cover claims made on rentals. So please check to make sure you have the correct type of policy.
If you have converted your residence into a rental property, you should double check to make sure you changed your insurance policy. This is really important. If you only have a Homeowners Insurance Policy and the insurance company finds out that tenants are living there when you make a claim, they can deny your claim even though you have paid all the premiums. Not a pretty thought. Also, some insurance companies are happy to handle homeowner policies but refuse to cover rented properties. This may mean that you will need to locate a new carrier. You will definitely want to switch before the hurricane season begins.
Consider Landlord Contents Insurance
No doubt you have encouraged, or even required, that your tenants carry contents insurance. This is highly encouraged as your landlord insurance policy will not include coverage for your tenant’s possessions. Some landlords also carry contents insurance. This is especially the case if you are renting a furnished unit.
Does Your Current Insurance Policy Cover
Even if you have a landlord insurance policy, do not immediately assume it will cover any claims for hurricane damage. In fact, since North Carolina is frequently affected by hurricanes, many basic insurance policies these days exclude hurricane coverage.
To protect your investment properties from different types of perils and hazards, most landlords opt to attach riders to their basic landlord insurance policy. There is, however, another option.
One Policy, One Coverage, One (Big) Price
Rather than getting a rider for this and a rider for that, you can simplify the process and select a comprehensive insurance policy. Basically, as long as it is not stated as an exclusion, it is covered. Peril policies, on the other hand, will only cover types of losses that are specifically stated and nothing more.
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