When severe weather or a natural disaster is forecasted, insurance carriers may issue a moratorium. These temporary suspensions may disrupt your ability to protect your investments when they need coverage most, especially if proper coverage wasn’t already in place or if you’re in the midst of acquiring a new property.   

It’s important to know that moratoriums do not cancel or override existing coverage, but they do prevent policyholders and their insurance providers from adjusting limits, adding endorsements, or securing new policies until the suspension is lifted. For real estate investors, understanding when and why these temporary pauses happen, and how to stay ahead of them, is key to minimizing risk.  

What Is a Moratorium and Why Are Moratoriums Implemented?

A property insurance moratorium is a temporary pause on issuing or changing insurance policies within a specific geographic area. These suspensions are issued by insurance carriers—typically by county or ZIP code—in response to approaching natural disasters or severe weather.  

The primary goal of a moratorium is to stabilize the carrier’s exposure during high-risk periods. Allowing new or adjusted coverage right before a potential catastrophe, like a hurricane, could significantly increase claims and threaten the carrier’s ability to pay out claims. Moratoriums help ensure fair, consistent risk assessment and protect both carriers and policyholders from sudden, unsustainable exposure.  

Common Triggers Include: 

  • Natural Disasters: Hurricanes, wildfires, etc.  
  • Severe Weather Forecasts: The threat of widespread or prolonged damage from events like flash flooding or exceptionally intense wind/hailstorms may prompt precautionary restrictions.  
  • Economic Conditions: In rare cases, large-scale financial or industry instability may also lead to moratoriums.  

The Implications of Moratoriums on Real Estate Investors

For real estate investors, moratoriums can be disruptive—especially if you realize you don’t have the proper coverage in place or if a new acquisition is in motion. The most immediate impact is the inability to place coverage on a newly acquired property. If a moratorium is in effect for the area, insurers will typically not allow new policies to be written until the risk subsides and the moratorium is lifted.  

Moratoriums also restrict changes to active policies. Policyholders cannot adjust coverage limits, add endorsements, or make other updates to their policies during this time. This could create problems if an investor delayed necessary adjustments and now faces a high-risk event with inadequate protection.  

How Investors can Avoid the Potential Consequences of Moratoriums

As always, proactive risk management is the best defense against the limitations that moratoriums can create. Here’s how investors can stay ahead:  

Evaluate coverage early and often

Regularly review your portfolio’s insurance needs and update policies accordingly—especially if you own properties in high-risk states like California, Florida, Louisiana, or Texas. You don’t want to be scrambling for coverage when severe weather or natural disaster is on its way.   

Understand your limitations

Most carriers do not allow insureds to drop certain coverages in “low risk” seasons and re-add them later. Attempting to do so can leave your property unable to obtain the coverage once more, leaving your property exposed.  

Be patient

Moratoriums are temporary measures put in place to protect both insurers and policyholders. While they may cause frustrating delays in adding or updating coverage, they help ensure fair risk assessment and long-term coverage stability.  

Work with an experienced insurance partner

Partnering with a provider, like NREIG, that understands the risks investment properties face helps ensure appropriate protections are in place long before a moratorium is issued. Look for a team that is not only knowledgeable but also easy to reach by phone, should you need to bind coverage quickly.