Does my homeowners insurance cover hurricanes in North Carolina?

 

Does your homeowners insurance cover hurricanes in North Carolina?

Nope…. In some cases, it may not.

Those complicated insurance policies are difficult to understand and that could be a perilous position to be in when the Atlantic starts spinning up a monster.

At the time of this recording, we are in the lead up to peak hurricane season in the Atlantic ocean.

Eastern NC has seen two major storms in the last 3 years with Hurricanes Matthew in 2016 …. and Florence last year.

How did your homeowners’ insurance respond?

Will your policy cover you if the worst happens again?

Let’s jump in…

So let me start by saying, I am mainly going to be talking to homeowners insuring the actual home you are living in. Secondary homes, commercial, and rental properties follow many of the same rules but there are nuances that I won’t get into here.

That said there are just two key areas on your insurance policy that you need to pay close attention to.

The MOST important component of your policy to review is your deductible

Being that NC is located on the Atlantic coast insurance companies have put some fine print in your policies that might cause you to not have coverage for a major wind event.

How? Deductibles are not as simple as you might think.

Wait, I thought It was like $1000 or something?

There is a clever pricing mechanism called a “split wind/hail” deductible that can lower your homeowners’ insurance premium and coverage.

Let me explain…

Many companies will actually give you a standard deductible that covers most things…(think fires, theft, water damage inside the home) and sneak in a special deductible for any damage caused by wind and hail events.

It might read something like:

$1000 all perils deductible

**2% wind/hail deductible

Can you give me an example? 

That percentage deductible is calculated using your homes replacement cost value. So if your home is insured for $200,000 a 2% deductible would be $4,000

And if you have minor roof or siding damage equaling less than $4000…insurance won’t pay for that claim since it’s under the deductible amount.

I see this almost weekly in our agency. Consumers focus on finding the “best deal” or cheapest policy, disregarding how the policy is actually covering them.

Many times they consciously make the decision to “take the risk” and buy the lower cost policy because…

Well, homes are expensive…

What drives me crazy is to properly protect the home and keep deductibles at a reasonable level might only cost you a few dollars more…

Heres something else:

North Carolina being a coastal state does have some challenging insurance situations. Not to mention we are right behind Florida as the most hurricane-prone state on the east coast.

If you own property within one of the 20 coastal counties in NC you very well might be forced to accept a separate deductible for wind/hail or hurricane/named storms.

That said – if you are NOT situated on a coastal county you should NOT have to carry a separate wind/hail deductible in most cases.

And a quick tip to my friends who live within the coastal counties, reach out to your insurance agent and make sure you have something called a “hurricane/named storm deductible.”

This gets a little confusing but essentially means that a separate and higher deductible only applies if there is a major hurricane or named storm event. All other wind/hail events would be subject to your standard deductible…

That’s enough about deductibles.

Let’s move into another huge topic of discussion…

Flood insurance is NOT included.

In Eastern NC you hopefully know by now that flood insurance is a separate policy and is excluded on almost all home insurance policies.

After two major storms caused millions in damage across our region it’s painful to think that many homeowners still do not have flood coverage on their home.

If you do, congratulations. You are among a very small percentage.

Two quick stats, according to Mike Causey, our insurance commissioner, only around 140,000 homes in NC actually have flood insurance. And many of those homes are forced to have it based on flood zones and mortgage companies.

But get this, 50 percent of flood claims are actually paid to homes insured OUTSIDE a designated flood zone.

Go back 30 seconds if you need to hear that again.

I’ll go into flood insurance in more detail in later videos. But suffice it to say, it’s time to investigate flood coverage if you don’t already have it.

The devastation we saw in Lumberton, Carteret County and so many other areas in the recent past speaks for itself.

In many cases, flood coverage is very affordable and may only cost you a few hundred dollars if you live outside a flood zone.

If water rises and floods your home without a flood policy in force…. Your homeowners’ insurance will NOT cover the loss.

The Bottom Line

Let me bring this home to us.

YOU have control of where your home is insured and how it’s covered.

You may have purchased something in the past that doesn’t cover your home the way you thought.

Dig out your policy, or ask for a copy from your current agent, and review what you have.

If something looks alarming, ask questions.

You have worked too hard and pay too much, only to have that insurance company to tell you something is not covered.

So remember:

Deductibles

Flood Insurance

If you would like a second set of eyes to review your policy please let me know and we would be happy to assist.

Stay safe out there.

Thanks for watching.

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