Results of my research so far (
https://www.nolo.com/legal-encyclopedia/hurricane-ruined-vacation-rental-65359.html):
I'm summarizing what is on the web site. In absence of a rental agreement that covers the situation, look to the following three sources, in the order listed.
1.
State Law. North Carolina law directly addresses what will happen when mandatory evacuation orders affect the rental: Tenants are entitled to a refund, but not if they have either refused the landlord's or broker's offer of insurance (which would have compensated them for loss of use), or if they purchased insurance that covers the situation. [Question: if the owner recommends insurance, is that the same as an "offer of insurance?"]
2.
Court Cases. California, which has a robust vacation rental scene, has not passed legislation covering these rentals. This results in a rather harsh rule, following a 1926 case. Unless the rental agreement specifies otherwise, prepaid rent cannot be recovered when the property has been destroyed (
Pedro v. Potter, 197 Cal. 751 (1926)).
3.
Default Rules. In some situations, neither the lease nor state statutes or cases will address the problem of pre-paid rent for a vacation rental that can't be enjoyed. When that happens, a court is likely to look for past similar cases from higher courts and follow the solutions handed down. Most courts will insist that prepaid money be refunded, as long as the event that frustrated the lease was not only beyond the power of the landlord to control, but unforeseen. That last requirement triggers lots of arguments—are hurricanes during hurricane season truly unforeseen? What about road closures in the mountains in the winter—when they happen frequently, isn't this a risk that tenants are assuming? The answer is likely to be yes, especially when the landlord has urged the renter to purchase insurance.
I don't know about North Carolina but in Virginia, statutory provisions like this are not mandatory. In other words, they are there to fill in gaps. If a rental agreement covers the situation, the statutory provisions don't override the rental agreement.
I'm surprised that California, of all states, has no statutory provisions and a court would have to rely on a 1926 case.