Landlord's strategies to protect against natural disaster

[Mani Swagath]

Happy Holidays !

In the wake of the recent tornadoes at northern Texas, i would like to know if there are strategies for landlords to protect against such natural disaster. I have my rental in the northern Texas area, i do have landlord insurance, fortunately nothing impacted the area of my rental, however, am now seriously concerned on the future potential of such natural disaster. Hence this two part inquiry : 

• Is there anything i can do proactively per this potential of being in the "tornado alley"? 
• What can one do reactively if such a natural disaster demolishes one's investment property ? What are the steps involved in reinstating the house while working with insurance provider ?

Thanks in

[BreAnn Stephenson]

Hi @Mani Swagath!

As I work for a company that is dedicated to helping investors, property managers and tenants prevent avoidable losses, I'd love to add my two cents...

First, I'm glad that these events are making you consider ways you can be proactive! Insurance is great of course, but it doesn't cover everything as we all know. Changing our mindsets to viewing insurance as useful in catastrophic situations can help us avoid interruptions in business, money out of our pockets, and many headaches! "An ounce of prevention is worth a pound of cure"...wah, wah, wahhhh....

Unfortunately, there is not usually much that can be done to avoid becoming a victim of such disasters other than investing in areas that are less prone to this type of weather activity. Any investment carries some level of risk, but you may consider carefully the areas in which you invest as you are looking for future properties. Many areas of the country have their own potential for catastrophic losses due to mother nature... in California and on the west coast it may be earthquakes and wildfires, the Gulf Coast and Florida, hurricanes, the Midwest has hail and tornadoes for example...

That stated, the events over the weekend were quite extraordinary. Although tornadoes have occurred in December in Texas, one usually expects to see that activity in the months of April, May and June. Secondly, even though there have been reports of up to 1000 properties damaged, Texas is home to more than 26 million people. I'm not quite sure how many homes that equates to, but unbelievably, even 1000 is a very small percentage when compared to millions of homes. In other words, this was a "needle in the haystack" event.

In terms of making the process smoother if damage does occur, I might recommend a recent article I wrote for Community Investor:

http://communityinvestor.com/index.php/component/c...

In the article I talk about items that might be required of you as an insured, how to spot and avoid scammers who are looking for easy "prey" after a large storm, and there's also a couple of links to information about how to properly board up your property and how to fight mold.

The short "skinny":

1. Always be sure to contact your insurance company as soon as possible in the event of a loss as there may be limitations on the time frame for reporting a loss/filing a claim.

2. Be sure that you are familiar with your coverage BEFORE a loss happens. If there is something in your coverage you don't understand, consult your agent. They should be happy to clarify anything that feels confusing.

3. Know that there are some answers that you cannot have until you have gone through the entire claims process... like, "What will I be paid if X happens?" Each incident is unique and depending upon the circumstances of the loss, a variety of outcomes may be possible. Try to be patient even though this is one of the hardest times to do so. Any company worth their salt will be doing their best to settle the claim fairly and in a reasonable time frame. Sometimes it may take a while to gather the necessary information to make the correct determination.

4. If there is anything that you can do to prevent further loss from occurring (like boarding a property after a break-in, for example) it is advisable to do so. Take pictures before you make your temporary fix and set aside any damaged items for the adjuster to examine.

I hope that helps!

-BreAnn