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A Word About Rental Properties

If you own a rental property insured by Citizens, you may wind up paying a significant amount of any shortfall caused by a future hurricane. Last year, the Legislature created two types of properties insured by Citizens—a “homestead” category that includes renters with lease agreements (unlike the familiar Homestead Exemption), and a non-homestead category that covers second homes and month-to-month renters.

What that means, according to Greg Rokeh, is that if Citizens suffers a shortfall after another hurricane, the non-homestead owners would be levied first. If that’s not enough, both the homestead and non-homestead owners would be levied again. And if there were still a shortfall, all policyholders throughout the state would then be levied.
“If you own a rental property and have tenants without a lease, you could potentially be levied 90 percent of your premium amount,” Rokeh says. “If there is a lease in place, the potential levy is only 60 percent. For a lot of professionals who manage rentals, it now makes sense to keep your tenants on a long-term agreement.”