Vacation Rental Owners Face Large Insurance Premium Increases
The catastrophic hurricanes that tore through the Gulf Cost last summer are wreaking havoc in homeowners’ insurance premiums, even in states far removed from form where the storms hit, according to H.P. McQueen of the Wall Street Journal. Of course many of the prime vacation rentals are located close to coastal areas where insurance coverage will be hardest hit, but the rate increases will not be limited to those areas.
The article by McQueen, reprinted in The Pittsburg Post-Gazette, says, “Still reeling from an estimated $56 billion of hurricane-related losses, major insurers are dropping policies or not writing new ones in coastal areas from Texas to Florida and up the Eastern Seaboard as far north as Massachusetts. Insurers including Allstate Corp. and Nationwide Mutual Insurance Co. say they need to reduce the financial risk that could come with fresh storms as soon as this year. But the moves have left homeowners in a number of states scrambling to find new coverage, often at higher cost.�
The article goes on to point out that, “Problems are most acute in areas that suffered hurricane damage. In Florida, insurers including Allstate, Nationwide Mutual, a unit of Nationwide Financial Services Inc., and Poe Financial Group, southern Florida's second-largest insurer and a major condominium insurer, recently have said they would stop writing new business anywhere in the state. Those moves came after Nationwide Mutual last summer won Florida approval for a 21 percent rate increase.�
The cost of insurance premiums has long been a major concern to many vacation rental owners, such as us. However it is a necessity. There is little that the vacation rental owner can do except shop around, have a large deductible, and avoid filing claims whenever possible. In fact, you should never file maintenance –related losses such as damages from water leaks, because even one claim could cause you to be dropped by an insurer. The article quotes industry experts who “advise consumers to keep a low profile. Self-insure as much as possible by carrying as high a deductible as you can afford to keep premiums low and remain attractive to insurers�.
