Homeowners insurance doesn't cover floods: How to protect your home in North Carolina
The Atlantic hurricane season runs from June 1 through Nov. 30, but heavy rains and flooding can happen any time.
It’s important to know that in North Carolina, homeowners insurance policies do not cover flood damage.
If you live in a flood plain, near a river or if you live near the coast, you should consider purchasing flood insurance for your home.
Many homeowners insurance companies also sell flood insurance.
Also, just because a home is not in a designated floodplain does not mean flood damage never happens.
Most flood insurance policies come with a 30-day waiting period, so waiting until a storm is forecast will be too late to protect your property.
Want to check your property’s flood factor? Click or tap here
The federal government offers insurance for direct flood and flood-related damage, including mudslide and erosion under the National Flood Insurance Program (NFIP).
The federal program requires that the community in which you live adopt zoning laws that prohibit future building in flood-prone areas. The coverage involves a 30-day waiting period before the policy becomes effective; however, there are exceptions. For more info, contact NFIP at 1-800-427-4661 or on FEMA’s website.
What is a flood?
Flood insurance covers direct physical loss caused by a flood. In simple terms, FEMA defines a flood as an excess of water on land that is normally dry.
Also, the National Flood Insurance Program defines a flood as general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is your property) from:
● Overflow of inland or tidal waters;
● Unusual and rapid accumulation or runoff of
surface waters from any source;
● Mudflow
● Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood as defined above.
How much does North Carolina flood insurance cost?
The average cost of flood insurance in North Carolina is $836 per year for an NFIP policy with around $287,000 of coverage.
Contrast that to the average home value in the state – $322,527, according to Zillow – and it’s easy to see that a flood policy won’t cover the full replacement value of the average home.
Annual flood insurance rates in North Carolina range from $200 to nearly $4,000, depending on where you live.
North Carolina residents who buy a policy from the NFIP will find that the cost of flood insurance depends on whether they live in a high-risk flood zone. For example, the average annual cost for flood insurance in Wrightsville Beach is $3,729.
Other factors that impact rates include the elevation a home sits on and the height of the lowest floor of the home.
Is flood insurance required in North Carolina?
North Carolina homeowners aren't required by the state to buy flood insurance. However, your mortgage company may require it if your home is in an area with a high risk of flooding.
There are also federal requirements.
Homes that are in a Federal Emergency Management Agency (FEMA) flood zone beginning with "A" or "V" need flood insurance to get a mortgage. You can check FEMA’s Flood Insurance Rate Map (FIRM) to look up your property’s flood zone.
These homes are typically located at a low elevation above sea level, like the Outer Banks, or near a river, like the Catawba. Their proximity to water means that they have a greater chance of flooding compared to a home that is inland.
NFIP flood insurance companies in NC vs. private flood insurance
Since the NFIP is a federal program, a policy costs the same regardless of who you buy it from.
Companies that offer NFIP flood insurance include: North Carolina Farm Bureau, Selective, Assurant, The Hartford, Allstate, Wright National, USAA, Bankers Insurance, Auto-Owners and Trisura among others. Federal coverage (NFIP) is paid out by the government and financed through taxpayer money.
Private flood insurance covers the structure of your home and its contents from water damage caused by a flood. What separates this option from other flood insurance policies is that it is not backed by the federal government.
Policies under the federal program are able to pay out flood damage claims for as long as the program receives funds. A private flood insurance company, on the other hand, is a for-profit company that relies on either an insurance policy of their own or money collected from premiums to pay out damages to claimants.
Some companies offer both NFIP and private flood insurance. People looking to purchase flood insurance should compare prices and select a policy that best fits their needs.
The largest private flood insurance companies in North Carolina include AIG, AXA SA, Liberty Mutual, Zurich, Assurant, Sompo, Berkshire Hathaway, Allianz, Transverse, Swiss Re, Arch Captial, Trisura and Allstate among others.
What does an NFIP cover?
A flood insurance policy can cover both your home and its contents.
The NFIP’s building coverage includes foundations, electrical and plumbing systems, and water heaters.
An NFIP contents coverage policy would cover clothing, furniture, personal electronics, and portable and window air conditioners.
For residential properties, you can secure coverage up to $250,000 for the building and $100,000 for the building contents.
For commercial properties, you can secure coverage up to $500,000 for the building and $500,000 for the building contents.
Contents and building coverage are purchased separately, and there are always separate deductibles.
How you’re repaid: What’s the difference between actual cash value (ACV) and replacement cost value (RCV)?
Actual cash value: The amount of money needed to fix your home, minus the decrease in value of your property because of age or use. This is also called depreciated cash value.
Replacement cost value: The amount of money needed to repair your home at today's prices of building supplies or to replace your belongings at today's cost of the similar or like item. It is important to discuss replacement cost with your insurance agent when purchasing your policy.
Visit the North Carolina Department of Insurance's website for more information.
How many people in North Carolina have federal flood insurance through NFIP?
In North Carolina there are more than 81,000 flood insurance policies in effect representing more than $10 billion in coverage.
Does my renters policy cover water damage caused by flood?
No.
A renters or tenant’s policy does not cover loss due to flood. If you rent, be sure to ask your landlord if the property is covered in case of flood. Renters may still want their own policy to cover belongings. They can purchase coverage through the NFIP or Write Your Own program.
Safety when returning to a flooded home
- If you left home during the storm, return to your home only after local officials have said it is safe to do so.
- Turn around, don’t drown: Don’t drive through flooded areas or standing water. As little as 6 inches of water can cause you to lose control of your vehicle.
- Don’t walk into floodwater, it can be full of chemicals and dangerous debris.
- Underground or downed power lines can also electrically charge the water.
- When entering your home, do not use matches, lighters, candles or any other flames. Gas may be trapped inside your home. Use a flashlight instead.
- Do not touch electrical equipment if it is wet or if you are standing in water. Turn off the electricity to prevent electric shock if it is safe to do so.
How to document damage after a flood
FEMA made a YouTube video of how to document damage after a flood.
It includes taking pictures and video of:
- Exterior damage to the home
- Damage to furniture or appliances
- Damage to the inside of closets and cabinets
How to start a flood insurance claim in North Carolina
Here are the steps FEMA has outlined on how to start a flood insurance claim:
- Start your claim: When your property floods, report the loss to your flood insurer as soon as possible. They will assign an insurance adjuster to guide you through the claims process, which includes an in-person or remote (when appropriate) property inspection within a few days. If you need help finding your insurance carrier, contact FEMA Mapping and Insurance eXchange (FMIX) center at 877-336-2627.
- Document your loss: Return to your home when it’s safe. Take reference photos and videos of your flood-damaged property and personal items. Include flood water lines inside and outside of the home. Document the make, model and serial number for appliances and electronics to share with your adjuster.
- Start cleanup: Keep samples of flood-damaged items (carpet or other flooring, curtains, etc.) to show your adjuster. After you take photos or videos of the flood-damaged items, throw out contents that pose a health threat. Do everything you can to prevent the growth and spread of mold.
- Meet with your adjuster: Upon meeting your flood insurance adjuster, ask to see their Flood Control Number (FCN) card. The FCN card will have an active date for the current storm year and a picture I.D. The adjuster will answer your questions and prepare a damage estimate for your review.
- Receive payment: Your claim payment amount will be based on your policy’s coverage and the supporting documentation you provide to your adjuster. You are responsible for submitting the required documentation and meeting FEMA’s deadlines related to your NFIP claim. If you have a mortgage, your claim check will be written to you and the mortgage company.
To appeal your claim, follow FEMA’s appeals process for NFIP policyholders. For more information on appealing your flood insurance claim, visit FEMA’s website.
Who can I call if I have more insurance coverage questions?
You should first try to contact your local insurance agent or your insurance company for specifics about your policy.
The North Carolina Department of Insurance is also available to help consumers with insurance-related questions. You may call the Consumer Division at 855-408-1212.
The NFIP will respond to questions about the federal flood insurance policy and claims. NFIP can be reached by calling 800-427-4661.
If I have problems with my insurance company, agent or adjuster, where can I turn?
If you believe you are being treated unfairly, you may file a complaint with the North Carolina Department of Insurance. You may call the Department's Consumer Division at 855-408-1212 for help.
