Natural hazards and home insurance in North Carolina

Which hazards does a buyer need to check?

The NC Department of Insurance describes four exposures that a standard policy handles differently:

1. Flood. Homeowners policies do not cover it.
2. Wind, hail and named storms. Coverage may be excluded or subject to a separate, higher deductible.
3. Earthquake. Usually excluded, though fire or explosion that results from earth movement is usually covered.
4. Mudslide, mudflow and landslide. Also excluded from most policies.

This page does not rank the risk by county or by city. Look up your own address, as described below, and ask an insurance agent for quotes before you sign a purchase contract.

Flood insurance and flood zones

The NC Department of Insurance says: “Homeowners insurance policies do not cover flood damage.” Your lender may require flood insurance if your home is in a flood plain, and you should not assume you are safe outside one.

What the federal program offers. According to FEMA’s floodsmart.gov:

• Building coverage pays up to $250,000 and contents coverage up to $100,000. They are usually bought separately and have separate deductibles.
• Any homeowner in a participating NFIP community is eligible, including owners of condos and townhouses.
• Rates depend on where the property is built, how it is built and its replacement cost. The NFIP says its rates do not vary by insurance provider, so shopping among NFIP agents will not change the price.
• The Department of Insurance notes a 30-day waiting period before a policy takes effect, with exceptions. Plan for it when you set a closing date.

Flood zones. FEMA says zones A, AE, AH, AO, AR and A99 are high risk, and zones V and VE are high-risk coastal areas with an added hazard from storm waves. In participating communities, flood insurance is mandatory for federally backed mortgages in those zones. FEMA also says that about 1 in 3 flood insurance claims come from low- and moderate-risk zones, so a map designation is not a guarantee. Flood maps are updated periodically, so a property’s zone can change (Real Estate Commission). You can request a Letter of Map Amendment or Revision if you think a designation is wrong.

Elevation certificates. Most homeowners do not need one to buy a policy, but owners in zone A or V may. It records the home’s first-floor height, and it can identify discounts. Ask the local floodplain manager whether one is on file. If not, a land surveyor, engineer or architect completes it (FEMA).

Hurricane, wind and hail coverage

The Department of Insurance explains that, depending on location and the insurer’s rules, windstorm and hail may be excluded from the main policy. A separate wind policy has its own deductible. Two deductible types matter:

• Named storm deductible. It applies to wind or hail loss during a period that begins when the National Weather Service issues an advisory, watch or warning for a named storm in any part of North Carolina, and ends 24 hours after the last watch or warning ends. It is typically a percentage of Coverage A (dwelling) or Coverage C (personal property).
• Windstorm or hail percentage deductible. A percentage of Coverage A for any wind or hail claim.

Worked examples from the Department of Insurance: a 2% named storm deductible on a home insured for $300,000 is $6,000. A 1% wind or hail deductible on a home insured for $200,000 is $2,000 per claim.

Discounts. In North Carolina’s beach and coastal territories, qualifying homes may earn mitigation credits on wind and hail premiums, including through the voluntary FORTIFIED construction and re-roofing program. Contact an agent to find out whether a home qualifies.

Earthquake coverage

Homeowners and renters policies typically exclude earthquake loss. An earthquake endorsement can add cover for the dwelling, detached structures, personal property, debris removal and extra living expenses. Endorsements usually treat shocks within a 72-hour period as one earthquake and do not increase the policy’s limits. They may exclude flood and some masonry veneer (Department of Insurance).

The state insurance market and the insurer of last resort

The North Carolina Insurance Underwriting Association (NCIUA), also called the Coastal Property Insurance Pool, is a tax-exempt association of insurance companies created by law to provide essential property insurance in the Beach and Coastal Areas of North Carolina. To get a wind and hail policy from the NCIUA, you must hold an active primary policy with an admitted North Carolina insurer that has excluded windstorm. In a wind loss, your primary insurer still investigates and adjusts the claim even if the NCIUA wrote the wind policy.

Insurance on your home is not required by North Carolina law, but if the home is mortgaged the lender may require it (Department of Insurance). A policy should carry at least 80 percent of the dwelling’s replacement cost, or the insurer may not pay the full cost to rebuild.

What does a seller have to tell you about hazards?

The Real Estate Commission’s disclosure statement (REC 4.22, rev. 7/26) asks sellers whether the property is in a federal or other designated flood hazard zone, has had flood damage, has been the subject of a flood claim or federal disaster aid, carries flood insurance, and has a flood or FEMA elevation certificate. Sellers may answer “No Representation.” See seller disclosure in North Carolina.

For the general rules, see the flood insurance and homeowners insurance guides, and the Charlotte page.