Do I Need Flood Insurance in North Carolina? How Much Does It Cost?

Do I Need Flood Insurance in North Carolina? How Much Does It Cost?

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North Carolina homeowners are not legally required to buy flood insurance. However, people who own homes in areas at high risk of flooding may be required to purchase coverage in order to qualify for a mortgage. And even people who don't live in a high-risk area may want to consider flood insurance, as a standard homeowners insurance policy doesn’t pay for damages due to flooding.

Flood insurance is available to homeowners in North Carolina through the National Flood Insurance Program (NFIP), which is a federally backed program, as well as through private insurance companies.

Do I need flood insurance in North Carolina?

According to state law, residents of North Carolina aren't required to buy flood insurance. But if your home is located in an area determined by FEMA to be at high risk of flooding, you may have to buy coverage in order to be eligible for a mortgage backed by the federal government.

Homes that are located in a flood zone beginning with "A" or "V" — such as AE, AR or VE — have a 1% or greater chance of flooding each year and need flood insurance to get a mortgage. These homes are typically located at a low elevation above sea level or other body of water, like the Pamlico Sound, or near a river like the Catawba.

Even if your home is far from the coast or another body of water, flood insurance is worth considering for North Carolinians. Flood damage is not covered by standard homeowners insurance, and the cost of flood damage can easily reach tens of thousands of dollars for even a few inches of water.

North Carolina is frequently subject to flooding, including hurricanes and seasonal heavy rains, each year. In extreme scenarios, floodwaters can come out of storm drains or other sources, causing flooding in places that might not otherwise be vulnerable.

Flood insurance coverage in North Carolina

The maximum amount of coverage for your home's structure available from NFIP flood insurance plans is $250,000 for the structure of your home and $100,000 for its contents. The $250,000 structure limit covers the cost to rebuild your home and is different from your home's resale value. Your home's resale value is usually higher, as it includes the value of the land it is built on — especially if it's in a desirable location.

Beyond the dollar-limit maximum, there are some limitations as to what is covered under NFIP flood insurance. NFIP insurance pays to repair or replace damage to the following parts of your home, with separate limits for different parts of your property.

Covered under the dwelling portion of NFIP insurance:

  • Your home's walls, windows, doors and roof.
  • Standard home systems like a furnace, central AC and electrical wiring.
  • Built-in appliances such as a refrigerator or stove.
  • Permanent flooring like hardwood or carpeting.
  • Detached garages (up to 10% of your coverage limit).
  • Debris removal.

Covered under the property portion of NFIP insurance:

  • Furniture and movable floor coverings, like rugs.
  • Electronics.
  • Portable appliances, like window air conditioners and microwaves.
  • Clothing.
  • Curtains.
  • Frozen (but not refrigerated) food.
  • Valuables (up to $2,500, subject to the exclusions below).

Some parts of your property are specifically excluded from NFIP flood insurance, usually because they are very valuable or particularly susceptible to flood damage, like landscaping or an outdoor pool.

What's not covered by NFIP insurance:

  • Trees and plants
  • Landscaping
  • Outdoor paths
  • Hot tubs and pools
  • Decks
  • Fences
  • Precious metals
  • Cash and stock certificates

NFIP flood insurance also does not cover additional living expenses or loss of income. If you want or need coverage for anything not covered by NFIP insurance or need more than the coverage limits NFIP provides, consider buying a policy from a private flood insurance company in North Carolina. Private flood insurance companies often have a wider range of coverages available and are more likely to be able to meet your needs.

How much does North Carolina flood insurance cost?

In our research, we found the average cost of flood insurance for North Carolina homeowners to be $718 per year. Among cities we surveyed, Raleigh had the highest rates, with an average premium of $944 per year. Residents of Wilson, N.C., paid the most per dollar of coverage. They had to spend about $391 per $100,000 of coverage. Meanwhile, Cary residents only had to spend $176 to receive the same amount of coverage.

City
Policies in force
Total coverage amount
Total premiums
Average cost per policy
Raleigh1,945$551,864,400$1,835,391$944
Wilson494$117,648,800$460,408$932
Concord171$049,275,900$90,481$529
Cary/Chatham County795$237,675,800$417,498$525
Charlotte2,970$769,244,200$1,808,068$609
Wilmington2,890$815,719,900$1,914,418$662
Greenville1,202$278,250,500$822,145$684
Durham1,226$305,241,100$1,053,455$859

Based on NFIP flood rates

North Carolina residents who buy flood insurance from the NFIP will find that the price they pay for flood insurance depends heavily on whether they live in a high-risk flood zone. The elevation of the ground your home is on and the height of the lowest floor of your home make a particularly significant impact on your rates.

For example, we compared two neighboring homes in New Bern, N.C, along the Trent River, which are of approximately equal value and size. One, located in a 200-year flood zone — meaning the property has a 0.2% chance of flooding per year — is estimated to have an annual flood insurance premium of up to $2,530. The other, located outside a high-risk flood area, is expected to cost a maximum of $730 per year.

How do I find out which flood zone my house is in?

North Carolina homeowners who are considering buying flood insurance through the NFIP can easily determine which flood zone they are in using the North Carolina Flood Risk Information System (FRIS) online mapping tool.

The tool shows the location of areas at high risk of flooding, so you can get an understanding of the chance of flooding where you live. The tool even includes a calculator that uses your home's square footage, elevation and building value to give an estimate of how much you might pay for flood insurance.

Keep in mind that the information provided by the tool is an estimate, not an exact quote. You'll have to contact a local North Carolina flood insurance agent working with the NFIP to determine the exact rate you'll pay for flood insurance.

Which is better for North Carolina homeowners: private or public flood insurance?

The most affordable and accessible option for flood insurance has historically been through the NFIP, but over the last several years, the private flood insurance industry has seen a rapid improvement in both rates and accessibility. North Carolina residents may want to look into private insurers, especially if they can't get the right level of coverage or are quoted a prohibitively high price for flood insurance from the NFIP.

There are a few potential drawbacks to be aware of. First, if you are required to buy flood insurance as a condition of your mortgage, your lender may require that a private policy meet the same level of coverage as an NFIP-backed policy. Second, many private flood insurance companies are new and untested, so there is a bigger chance that your insurance company may not be able to pay your claim in the case of a major disaster.

Insurance companies are at the most risk of being unable to pay out claims when a large number of people make expensive claims at the same time — such as a widespread flood — similar to what happened after Hurricane Florence in 2018.

Additionally, while almost anyone can buy flood insurance through the NFIP, that's not necessarily the case with private insurance. If your home is located in a very high-risk area, such as the Outer Banks, some private flood insurance companies may charge you very high prices. And some may decline to offer you flood coverage at all. If you're denied coverage, you can check with other insurers to find a better price, but the NFIP may be your only option.

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