Do North Carolina Homeowners Need Hurricane Insurance?
The Atlantic and Gulf Coasts’ hurricane season runs from June through November, with the most activity occurring between August and October.
2017 was a hard year for the southeast, with over 17 named storms hitting the area. The National Oceanic and Atmospheric Administration (NOAA) predicts that the 2018 hurricane season will be “near- or above-normal.”
With the growing threat of hurricanes due to a changing climate, many homeowners are considering hurricane insurance coverage.
But do you really need hurricane insurance in North Carolina? Keep reading to learn more.
What is Hurricane Insurance?
Your home is probably your most valuable investment, and homeowners insurance is a must to help recover your investment after damages.
But if you’re in an area that hurricanes may affect, homeowners insurance can get complicated. Because hurricanes bring both high winds and lots of rain, you need to be sure your policy protects against both floods and wind damage.
Unfortunately, no homeowners insurance covers floods or storm surge, and some policies don’t automatically cover windstorm damage. If you live in an area prone to high hurricane activity or even factors such as groundwater surge, tidal surge, or overflowing bodies of water, you may need flood insurance.
While there is no specific “hurricane insurance” package, a homeowners policy that covers windstorm damage in addition to flood insurance is enough to cover your home during a storm.
What Does Hurricane Insurance Cover?
Assuming you have adequate windstorm and flood insurance, the following are covered:
- The home itself (including heating, plumbing, etc.)
- Home contents
- Detached structures (sheds, garages)
- Temporary living expenses
As always, maintaining an inventory of personal belongings is essential to later filing a claim with your homeowners insurance.
Do I need Hurricane Insurance in North Carolina?
The number and intensity of storms in North Carolina has been increasing throughout the last century. This is true in the Virginia Beach/Norfolk region of North Carolina, which is the fourth most likely U.S. region to receive a major hit from a hurricane.
This trend is similar to much of the southeastern United States, as hurricanes continue to grow in strength and number. In fact, Florida declared a state of emergency in May of 2018 (before the official start of hurricane season) due to a subtropical storm.
Hurricanes are expected to continue to grow in strength and number, so you should consider purchasing hurricane insurance to make sure you’re covered. Here’s where it’s good to be aware of the existence of hurricane deductibles, a policy which is in place in 19 states including North Carolina.
What are Hurricane Deductibles?
After the destructive Category 5 Hurricane Andrew in 1992, insurers realized that losses from hurricanes were much higher than they previously thought. This was proven in 2005 when Hurricane Katrina hit and cost insurers $41 billion.
To limit their exposure to huge amounts of losses from policyholders, insurers introduced hurricane deductibles. It refers to the amount a homeowner must pay before the insurance covers the damage caused by a hurricane. In the 19 states that have this, insurers sell homeowner insurance policies with a percentage deductible instead of dollar deductibles for storm damage.
The percentage deductible is based on the insured value of the policyholder’s home. The actual percentage also varies by state or by each case. In NC, most homeowners have 1 percent deductible. So, if your Raleigh home is insured for $300,000 and has a 1 percent hurricane deductible, you must pay the first $3,000 of your claim out of your own pocket before your home insurance kicks in and covers the rest of the hurricane’s damage to your property.
How Much Does a Hurricane Insurance Policy Cost?
Strictly speaking, there is no “hurricane insurance.” Rather, there is a combination of policies that you can purchase to protect your home from damage caused by a hurricane. Homeowners insurance and flood insurance are the most common and important ones.
According to personal finance data website ValuePenguin, the average cost of flood insurance for North Carolina homeowners is $718 every year. This is slightly higher than the average cost of flood insurance in the country, which is at $699 per year.
Together with an average cost of $1,056 for home insurance in North Carolina every year, the total cost of hurricane insurance in the state is around $1,774. Considering how much damage a hurricane can wreak on your home, the total hurricane insurance cost is well worth it.
Home and Flood Insurance: Why You Should Get Them
When living in a hurricane-prone state like North Carolina, one of the best ways to protect yourself and your property is by getting your home insured.
Standard homeowners insurance doesn’t cover flood damage at all. It does, however, cover damage caused by heavy winds during a hurricane. Then, to protect yourself better, supplement it with flood insurance.
Historically, North Carolina has experienced devastating, record-setting floods like the 500-year flood level during 1999’s Hurricane Floyd. Even if you don’t experience a hurricane as extreme as Floyd, the cost of flood damage can still easily reach tens of thousands of dollars. With a flood insurance policy, you can rest assured that flood damage to your home is covered.
Tips to Find Hurricane Insurance
- Make sure you have enough coverage to pay for the full cost of rebuilding your home.
- Don’t delay reviewing, updating, or increasing your policy. Flood insurance policies have a 30-day waiting period, and insurers likely won’t adjust coverage when a storm is imminent.
- Be sure to compare quotes and ask lots of questions to get the best deals.
Eight out of the top ten costliest catastrophes in U.S. history are hurricanes.
And the scary part: they’re expected to get even worse within our changing climate.
For more information on hurricane insurance coverage, rates, and policies, contact a North Carolina homeowners insurance provider today.