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North Carolina has a thriving rental property market and is a reasonably landlord-friendly state. These are just some reasons property investors buy here, and running a rental property business here has its perks.
That said, North Carolina is as perilous as it is beautiful- landing in the top 10 most at-risk states for natural disasters. Dramatic storms, tornadoes, hurricanes, and floods all cause huge amounts of property damage- which is part of what makes landlord insurance so important.
You also need to consider the general risks of renting to others and take steps to protect your finances.
This guide to North Carolina landlord insurance shares useful insight into the types of coverage offered, how much it costs, where to get it, and why you need it.
Rental Costs and Landlord Insurance in the US
After an increase in property values and rental demand in many parts of the country, the average cost of renting a property in the US jumped from less than $1,400 to over $1,900 per month.
The average monthly premium for landlord insurance in the US is $175, or $2,100 per year- but this figure varies significantly between states and specific properties.
What Is North Carolina Landlord Insurance?
Put simply, landlord insurance in North Carolina is a highly recommended home insurance policy that covers rental properties. It is designed for people who own investment property and have tenants rather than living in the space themselves.
Landlord insurance is not required by law if you own a rental property in North Carolina, but without it, you leave yourself and your business exposed to significant financial risks. Rental property insurance (another name for landlord insurance) is the first line of defense against property damage, liability, and other potentially expensive events.
Differences Between Landlord Insurance and Homeowners Insurance
Landlord insurance is essentially homeowners insurance for people who rent their properties to others rather than live in them themselves. There are, however, a few notable differences.
- Homeowners insurance policies do not include the same liability coverage that comes with landlord insurance.
- You generally pay a bit more for landlord insurance.
- A standard homeowners insurance policy does not cover properties that have other people living in them.
You can decide whether you need landlord insurance or homeowners insurance by exploring options with different providers.
What Is Covered by Landlord Insurance in North Carolina?
Policies vary as far as coverage goes, and some offer more in-depth protection than others. That said, the basic categories are the same across the board.
These are:
- Dwelling coverage
- Personal property insurance
- Additional structures
- Liability coverage
- Loss of rental income insurance
Some useful coverage options are usually offered but not automatically included. In North Carolina, the most important additional coverages are flood insurance and enhanced storm damage insurance.
Many rental properties in this state lie in a flood zone and are at risk of being hit by hurricanes. If your policy does not automatically include it, you must add it- or take out a separate policy with the National Flood Insurance Program.
What Is Not Covered by Landlord Insurance in North Carolina?
Although you can add on a lot of additional coverages to extend your policy, there are a few things that are simply not included in landlord insurance.
- Tenant belongings: Tenants should take out their own renters insurance to cover any damage to their personal property.
- Wear and tear: Landlord insurance does not pay for repairs or replacements for old appliances that break down from general use.
- Intentional damage: Damages caused by the malicious or intentional actions of a tenant are not insured. You would need to file a lawsuit instead.
How Does Landlord Insurance Help North Carolina Rental Property Owners?
Why is landlord insurance required? It may not be a legal requirement, but it is an essential investment for many reasons.
Examples of When North Carolina Landlord Insurance Coverage Comes In Handy
You need landlord insurance in North Carolina for protection in various situations.
The best example of this is natural disasters protection- something North Carolina property owners are at risk of.
If you are hit by a hurricane or flash flood, the damage could be catastrophic. Landlord insurance will pay to rebuild your property.
Another risk landlords face is having to pay medical bills if a tenant is injured. Property liability laws leave landlords responsible for damages in many situations. Your insurance can cover medical expenses and legal fees.
Other examples include tenant disputes and evictions, leaking HVAC systems, roof damage during severe storms, and break-ins at your property. In every case, it pays to have protection.
The Average Cost of Landlord Insurance in North Carolina
When discussing the average landlord insurance cost in North Carolina, it is important to take the numbers with a pinch of salt. We can look at general data to pull a figure, but your landlord insurance quote could be vastly different.
There are many variables, and two seemingly similar properties could have very different rates. That said, here are the average costs of landlord insurance in North Carolina by property value (data taken from Clovered).
- $1,976 (property value $200,000)
- $2,126 (property value $300,000)
- $2,563 (property value $400,000)
North Carolina's average landlord insurance cost is higher than many states- primarily due to the various weather risks in the area.
Exactly how much you will pay can only be established by asking for landlord insurance quotes from several providers.
How Are Landlord Insurance Costs Calculated?
As mentioned, many factors influence the cost of landlord insurance. Here are the key considerations during rate calculations.
- The age and condition of the property
- The property's size, type, and value
- Specific risks in your particular location
- Coverage limits
- Deductibles
- Additional coverages
- Previous claims
Generally speaking, the higher the risk, the higher the cost.
A large, valuable property in a high flood-risk zone that has not had any upgrades or renovations for 20 years will cost more to insure than a small apartment that was built two years ago with storm-resistant roofing in a relatively low-risk part of the state.
Also, rates are usually lower for clients who have not made any recent claims from their previous provider.
Are There Ways to Reduce Your Rental Property Insurance Rates?
There is no such thing as free landlord insurance, but there are ways to potentially lower your premiums and still get the coverage you need.
How much you can reduce your rates depends on your specific situation and property, but the following options are worth exploring.
Mitigate Storm Damage Risks with Property Upgrades
In a state like North Carolina, where extreme weather is an undeniable risk, many insurance companies look favorably on properties where storm mitigation efforts have been made.
Upgrading your roof, reinforcing windows, and looking into ways to reduce the likelihood of flooding can all lead to a lower price for your insurance policy.
Think About Increasing Your Deductible
On the one hand, you can secure lower monthly rates if you increase the amount of your deductible- but it does mean paying more out-of-pocket if you need to make a claim.
It is about getting the right balance, but if lower premiums are your priority, this is something to consider.
Reduce Claim Risks by Screening Tenants
Most insurance providers offer lower rates over time if you don't make any claims. Although some things are beyond your control, some risks can be mitigated by filling your properties with high-quality tenants.
Using DoorLoop, you can effectively screen tenants and control the application process to make sure you put the right people in your rental properties.
Upgrade Appliances
Some insurance companies offer lower rates to landlords who have new appliances. Upgrading HVAC systems and other important appliances could be a worthwhile investment.
The Five Best Landlord Insurance Companies in North Carolina
Here are five of the best companies offering landlord insurance cover for rental properties in North Carolina.
What Can DoorLoop Do for North Carolina Landlords and Property Managers?
Insuring your properties is a great move for building a stronger property management company- but you need more than that to help you operate at your best without wasting time on slow, outdated processes.
The answer is DoorLoop. Bring every aspect of your business together in a streamlined, convenient, and highly efficient platform.
Make your life easier and your property portfolio more manageable with a sophisticated, streamlined tool that makes sense.
DoorLoop Features
- Automated online rent collection and payment system
- Tenant portal
- Accounting suite
- Customized marketing with Zillow and Trulia
- Build your own applications website
- Tenant screening
- Online maintenance management platform
- Track earnings and outgoings
- Manage your property portfolio
- Much more!
Learn more about the great features available at DoorLoop by scheduling a free demo to get started.
Summary
Whether you have one rental property or manage a huge portfolio spread across North Carolina, having a landlord insurance policy in place is essential to protect your investment.
It is also highly beneficial to use a comprehensive property management solution such as DoorLoop to keep your business running smoothly.
Remember to compare insurance quotes for your rental property and choose a policy that offers enough coverage in the right areas.
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