Natural Disasters and what to do when your rental is unlivable

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I have a question that I'm sure has been addressed I just haven't been able to find anything on this subject.  What do you do when your rental property becomes unlivable for an extended period of time as in the case with a natural disaster?

A little background. I live on the MS Gulf Coast and this area was devastated by Hurricane Katrina.  Depending on what sources you use between 65,000 and 75,000 homes were destroyed.  Getting any work done was a months long process and the market was flooded with fly-by-night contractors which just exacerbated the problem because in some cases the work had to be done twice.  I know that a good homeowners policy would cover the cost of repairs, but what do you do about the loss of rental income on those units?  Some banks did offer a little relief, usually 3 months of no payments on the mortgage that were tacked on to the backend, but many people had to wait much longer before being able to get a reputable contractor in to fix their homes.  Is there some kind of business interruption insurance for cases like this?  This will likely be the first of many questions I will have and I look forward to your feedback as I dive into what I hope to be a long term real estate investment dream.

Business Income or Fair Rental Value coverage is usually available at a nominal cost to any property policy. 

The caveat to that is it is usually not available on Flood and never on a National Flood Service policy.  If that was a huge worry you could always buy a Difference in Conditions policy (DIC), but that would most likely be too expensive of a solution for one rental home. 

So for a flood policy there is not a good easy cheap solution.  All I can say is call your congressperson on that, this has been an ask of the insurance industry for many years. 

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