Residents in North Carolina have to be wary of a number of common natural hazards, including hurricanes and floods, that can cause catastrophic damage to their homes. This highlights the importance of home insurance, which protects home owners from the financial burden of repairing or replacing their house or property.
How Much Does Home Insurance Cost?
The average cost of a home insurance premium in North Carolina was $757 in 2010, according to the Insurance Information Institute. Insurance rates are affected by the age of the home, its location, the type of construction, and the crime rate in the area. Old homes may not be insured or may only be insured for limited coverage whereas insurers may discount new homes. Homes in urban areas or in areas susceptible to natural disasters, or homes located further from fire-fighting capability will cost more to insure. The type of construction and its ability to withstand or minimize loss in the event of a fire or other disaster will affect your insurance premium.
The amount of coverage you have will also affect how much you premium is. The more expensive your property is the more it will cost to insure it, and any additional coverage, such as for special contents in your home or any other endorsements, will drive up the price. Fortunately there are ways you can reduce the cost of your premium. Insurance companies favor customers who install safety devices, such as smoke detectors, burglar alarms, or sprinklers, that reduce the chance of property loss. You can also qualify for a multi-policy discount if you combine your home insurance with another type of policy, such as automobile coverage.
What Does It Cover?
Homeowners insurance policies provide property coverage for dwelling and other structures, personal property, loss of use, personal liability, and medical payments to others. It also covers plumbing, heating, permanently installed air-conditioning systems, electrical wiring, and other fixtures in the house. Homeowners insurance policies in North Carolina cover damage caused by fire, smoke, theft, windstorm, and vandalism. However, it does not cover losses caused by earthquakes, mudslides, mudflows, landslides, or floods. Liability coverage is another element of standard homeowner’s insurance policies. It provides coverage for the injury of another person not covered in your policy, or damage of another person’s property while on your premises. Liability does not protect against an intentional act. It’s important to report incidents to your insurance company even if you’re uncertain whether a claim will be made against you, otherwise you may be denied coverage later on.
Do I Have to Get Home Insurance?
North Carolina does not require its residents to have home insurance, but it’s a good idea to have it since it can protect you from having to pay for catastrophic, and expensive, damages to your home and property. However, home insurance is required by lenders before they finance the purchase of a home. Refer to the homeowners insurance guide from the North Carolina Department of Insurance for more information on home insurance in the state.
Optional Coverage to Consider
- Flood. Standard homeowner’s insurance policies typically do not cover flood damage. The National Flood Insurance Program offers insurance for flood and mudslide damage. Hurricanes impact North Carolina and may require residents to cover flood damage. The National Flood Insurance Program provides coverage limits up to $250,000 for structure and $100,000 for contents to participating communities. Wind storms must be covered in a separate policy. Coverage for low-risk areas is advised by the National Flood Insurance Program, as it reports between 20% and 25% of claims come from low-risk areas. Flooding insurance requires a 30-day waiting period before the coverage goes into effect.
- Fire and Lightning. Fire and lightning coverage is usually provided in a standard homeowner’s insurance policy. Fire and smoke damage cause millions of dollars in losses each year, and firefighting access – including distance from a fire extinguisher, water supply, building codes, and a nearby fire department – affect your insurance rate. Fire prevention, including the installation and maintenance of heat and smoke detectors and the purchase of a fire extinguisher, may reduce your premium. After a fire, contact your insurance agency immediately. Damaged goods should not be thrown away until an inventory is made, as all damages are surveyed when developing an insurance claim.
- Hazard. A hazard insurance policy will cover things like physical damage, and is standard in most homeowner’s insurance policies. It’s important to note what damages are specifically included or excluded in your homeowner’s insurance policy. You may need to purchase additional policies or endorsements for further coverage.
- Windstorm. Most windstorm and hail damage is covered in a standard homeowners insurance policy, though some coastal areas exclude windstorm and hail coverage. The Fair Access to Insurance Requirements (FAIR) Plan, administered through the North Carolina Joint Underwriting Association, or the Coastal Property Insurance Pool, administered through the North Carolina Insurance Underwriting Association, may help you obtain insurance if you cannot find coverage. Discounts may be available to homeowners who install storm shutters and hurricane-resistant laminated glass on windows and doors. Damage from flooding in a hurricane is not typically covered in standard homeowner’s insurance, and requires an additional flood endorsement or a separate policy.
Mobile Home Insurance
Mobile home or manufactured home insurance includes property and casualty coverage, and liability coverage. Mobile policies will provide loss of use coverage to insure additional living expenses in the event that you are not able to live in your home after a loss, and will provide for temporary housing, meals, and storage. Mobile home or manufactured home insurance renewal depends on regular payment, truth of insurance claims and factors, and repair of damages after a claim.