North Carolina Coastal Home Insurance: What You Need To Know!

08 Mar
Coastal North Carolina Home Insurance

Coastal North Carolina Home Insurance

North Carolina is a beautiful state to live in but homeowners insurance can be expensive, especially if you live near the coast.

The average premium for an HO-3 policy, which is considered the standard for single family homes in North Carolina, is $1,008, which is roughly 8 percent lower than the national average of $1,034.

This is great news if you live in a city such as Raleigh, Fayetteville or Charlotte, but if are putting down roots in a high-risk coastal city such as Wilmington, Wrightsville Beach or in Dare County (Outer Banks), expect your homeowners insurance costs to be much higher.

Here is everything you need to know about coastal insurance in North Carolina.

What exactly is a high-risk location?

A high-risk location is an area that is more susceptible to certain perils that are covered by homeowners insurance. Coastal properties are a prime example of this type of dwelling. Oceanfront and coastal properties are much more susceptible to wind, hailstorm and flooding damage.

Every time a major storm such as a hurricane hits the coastal community, insurance companies can experience thousands of claims. As an example, Hurricane Sandy resulted in $57 million in insurance claims in North Carolina.

Hurricane Sandy was not the only hurricane to cause damage in North Carolina. Five of the top 10 costliest hurricanes that have hit the United States did damage in the state of North Carolina.

As you can see, North Carolina is no stranger to major storm damage. While the majority of homeowner insurance policies cover damage from windstorms and hail, it is possible that this coverage will be excluded from a standard homeowner policy in certain coastal areas.

If your home is located in a high-risk area you should check with your agent or insurance company to make sure you are protected against all perils. If it turns out that there are gaps in your coverage you will need to shop for another policy or check with the NCJUA-FAIR Plan or the NCIUA-Coastal Property Insurance Pool which was formerly known as the Beach Plan if you cannot find coverage in the private market.

High Risk Pools in North Carolina

In North Carolina there are two different high-risk homeowner insurance pools and which one is right for you will depend on where your home is located.

Both of the plans available in North Carolina are risk pool arrangements which require that all companies selling homeowners insurance in North Carolina share the risk of insuring property owners, who are unable to find insurance coverage via normal channels.

Both of these plans are available to any North Carolina property owner. These policies cover homes, rentals and some business properties. They provide protection for perils that are named in the policy which include fire, wind, vandalism and other losses. Liability protection is not offered.

The North Carolina Joint Underwriting Association (NCJUA) administers the FAIR (Fair Access to Insurance Requirements) Plan, which mainly deals with non-coastal cities such as Asheville, Durham, or Greensboro.

The North Carolina Insurance Underwriting Association (NCIUA) is in charge of the Coastal Property Insurance Pool, which deals with coastal properties that are difficult or impossible to insure through normal channels.

Not sure what to do, please give us a call at 888-986-0223, we can quickly help answer any questions you have about NC coastal home insurance policy, coverage, rates and more.

Limitations of High Risk Pools

Both the FAIR plan and Coastal Property Insurance Pool should be considered a last resort.

These plans tend to be more expensive and offer less robust coverage than insurance policies written in the private market. While pricing will vary dramatically depending on where your property is located, expect to pay at least 10% -20% more than you would for a private insurance policy.

In North Carolina, the FAIR Plan provides coverage for fire, windstorm, lightning, vandalism as well as malicious mischief. These policies can be written as either actual cash value or replacement value.

It should be noted that all of your contents are only covered under actual cash value. This means that the insurance companies will take depreciation into account when valuing your contents. With actual cash value, the check you receive for your 10-year-old TV will most likely not be enough to replace it.

These policies also come with coverage limits. The FAIR Plan has residential limits of $750,000 and your personal property limits is capped at 40% of the approved building coverage If you need more coverage than that you will need to find a private market policy.

The Coastal Property Insurance Pool includes the following counties: Beaufort, Brunswick, Camden, Carteret, Chowan, Craven, Currituck, Dare, Hyde, Jones, New Hanover, Onslow, Pamlico, Pasquotank, Pender, Perquimans, Tyrrell and Washington.

As long as your property falls within one of these areas you are eligible for a policy through the pool.

Just like the FAIR Plan, these policies offer coverage for windstorm, fire, lightning, vandalism and malicious mischief and can be written as actual cash or replacement value. Personal property is only covered at actual cash value.

These policies also cap residential coverage at $750,000 with personal property being capped at 40% of the approved building coverage.

Deductibles Can be Tricky

When shopping for insurance in a coastal community, regardless of whether it is a private insurance company or a state run high-risk pool, the deductible can be tricky.

The deductible is the amount of money you need to pay before the insurance company will cover your losses. In a standard homeowners insurance policy the deductible is usually a set amount ranging from $750 up to $10,000. You choose your deductible, the higher the deductible the lower your premium.

When it comes to coastal insurance there are often two separate deductibles one for wind and hail damage and another for normal damages such as fire or vandalism. There can be a dramatic difference between these two deductibles. In most cases wind and hail damage will be a percentage deductible which means you will pay a certain percentage of the policy amount before your insurance kicks in to cover the rest.

As an example, if you are carrying $200,000 worth of home insurance and your wind or hail deductible is 1 percent, you would pay $2,000 out of pocket for any wind- or hail-related claim. If you have a 5 percent deductible, your cost jumps to $10,000.

Regardless of whether you have a private insurance policy or one issued from FAIR or Coastal Property Insurance Pool, you will most likely have a percentage deductible for wind and hail. Deductibles in the FAIR and Beach Plans range between 1 and 5 percent.

Be sure you completely understand your policy as well as the deductibles when shopping for coverage.

Tips for Finding Standard Coverage

These high-risk pool policies should be considered a last resort and only used if you cannot find coverage in the private market. They tend to be more expensive and offer less robust coverage as well as putting coverage caps on both property value and personal contents coverage.

Here are a few tips for finding a policy in the private market so you don’t have to rely on high-risk insurance pools:

  • Work with an agent that represents multiple insurance companies and specializes in coastal properties. We can easily help you shop and compare up to 12 different North Carolina home insurance premiums.
  • Talk to your neighbors regarding which insurance company they use to cover their property.
  • Consider adding storm shutters and replacing your roof with wind resistant materials to make it more attractive to insurance companies.
  • If insurers are more concerned about the condition of your house rather than the location, ask what you can do to upgrade your home to make it insurable.
  • Remember, flood damage is not covered by a standard homeowners policy, you will need a separate flood policy to make sure your coastal home is fully protected.
  • If you are shopping for a home on the coast, be sure to get a homeowners insurance quote as well as a flood policy quote to make sure you can afford the cost to protect your potential home.

At, we can help you shop your North Carolina homeowners insurance, coastal insurance and even your flood insurance. Shop online with us today or give us a call now at 888-986-0223!

Tags: , , , , , ,