Independence Day Hurricane Deja Vu

Exactly 18 years ago, my family's summer vacation on North Carolina's Outer Banks was cut short by Hurricane Bertha.  The Weather Channel was in its infancy and online storm tracking maps did not exist, but I had seen enough tropical storms to recognize the impending mandatory evacuation.  We bailed out a half-day early and got across the bridge before the traffic jam.  Outer Bankers are nice folks, and our mom & pop motel did not charge us for the remainder of our reserved week.

Hurricane Arthur is following almost an identical track and schedule to Bertha, which got me thinking about those nice Bankers and how much money they stand to lose because of a weather interruption during a peak tourist week. As the old folks say, this is why you buy good insurance, right?

Or not.  Few insurers write wind coverage on the coast of North Carolina, especially on hurricane-magnet Hatteras Island.  The North Carolina Insurance Underwriting Association, or NCIUA, or Beach Plan provides most of the coverage.  According to specimen policy forms available on the NCIUA website (http://ncjua-nciua.org/), the Beach Plan does provide a Business Income coverage option, including Rental Value, on its commercial property wind policy.  But the coverage requires DIRECT PHYSICAL LOSS to the insured property.  So no coverage for canceled reservations or early departures before the storm.

If a property is damaged by wind from Arthur and, as a result, cannot be rented, then the Business Income coverage kicks in after 72 hours.  Arthur is, at this writing, barely a hurricane and moving fast, so widespread property damage is not expected.  Most Outer Banks properties should be in rentable condition immediately after Arthur passes.

If you have ever been through a hurricane, you know that the sky is at its absolute clear blue best for a day or two after the storm.  Arthur will be long gone from the Outer Banks by fireworks time on Friday night.  The storm's timing is terrible for the local merchants, but the weekend will be beautiful, and a savvy traveler can probably find a vacancy.