HO6 (tenant occupied) in NC

3 Replies

I currently have a DP3 policy through ASI (Progressive) on my townhome in Durham, NC. I was recently informed by ASI that they would be dropping my coverage. I called them and they said that I had the wrong policy. I need a HO6 tenant-occupied policy because the HOA's insurance covers the exterior, but they don't provide that type of coverage in the State of North Carolina. I called Progressive to see if they could switch me to a different underwriter, but of the 6 different subsidiaries that they use, none of them will insure a tenant-occupied townhome. The rep said that my case was unusual and that they rarely get requests for tenant-occupied townhomes. I feel like that's weird. There must be tons of landlords in NC with townhomes in their portfolio. What are other landlords in NC doing to insurance their townhome rentals? Is a HO6 policy the correct choice?

You're not the first person I've seen who didn't know there was a different policy needed.  Insurance brokers are usually the best/easiest way to go about obtaining the proper coverage.  Also, working with a broker who specialized in working with investors is always a major bonus!

The confusion may be in what is a "Townhome". Is it a house in a community Association or unit in a condominium association (Townhouse style).

If it is a house, attached or detached, in a homeowners association then the Dwelling/Fire policy may be the correct coverage (the special form is form DP3).

If this is a townhouse style condo unit then the Homeowners form (form condo's it is HO6) or the DP3 is used. Depends on the company.

Progressive may or may not write DP3 coverage for condo units that are rented out.

If you have not spoke to an Independent agent I would suggest doing so.