Home Insurance in North Carolina

WRITTEN BY: Amelia Ciffone

UPDATED: MAY 24, 2022 | 1 MIN READ

When you live in a home for a long time, there will undoubtedly be a time when it gets damaged – whether that be from something as serious as a house fire or burglary, or as commonplace as a burst pipe. In these circumstances, home insurance can help you pay for what would otherwise be much more costly repairs. Considering how important home insurance is for maintaining the home, it”s important to understand some basic facts about home insurance as you begin your search for the ideal plan. North Carolina has relatively average premium prices. However, because state law doesn”t require coverage for hail or wind damage, significant gaps in coverage can exist in a state where tornadoes and hurricanes are commonplace.

  • Fun fact:  North Carolina is the largest producer of sweet potatoes in the nation!

Average Rates in North Carolina

North Carolina is a middling state for home insurance – its average annual premiums of $1,086 fall just $125 below the national average of $1,211. Based on data from the Insurance Information Institute, states with comparable prices to North Carolina include Illinois (average premiums of $1,056) and Hawaii (average premiums $1,102).

When it comes to renter”s insurance, North Carolina places 37th in the nation when states are ranked from most expensive to least expensive average premiums. Still, there isn”t a large range of renters” insurance prices, so the $157 average premiums in North Carolina fall just $23 below the national average of $180. Vermont and Pennsylvania have similar renters” insurance premiums (averaging at $155 and $158 respectively).

North Carolina Legal Insurance Requirements

While home insurance isn”t a legal requirement in North Carolina, it will be a requirement of a mortgage, and some renting agreements. For people who can”t choose their own home insurance, a mortgage company can put you on an insurance plan most beneficial to them. These kinds of insurance are often more expensive than those you could obtain yourself, making it doubly important to do the research to find a home insurance plan yourself.  

In North Carolina there are both Section I coverages, which involve the home and related structures, and Section II coverages for liability and injury

  • Coverage A (Dwelling): This coverage will pay for damages to the structure of your house as well as for electrical and plumbing systems.
  • Coverage B (Other structures): Coverage A only applies to whatever is physically attached to your main dwelling. Any buildings or man-made architectural features unattached to this dwelling are covered by Coverage B, including tool sheds, guest homes, fencing, and garages.
  • Coverage C (Personal Property): Should any belongings important to your daily life be damaged or stolen, this will pay for their replacement. This coverage typically extends to household appliances, furniture, and clothing. For more expensive or luxury items like jewelry, you may need to purchase additional insurance or special endorsements.
  • Coverage D (Loss of Use): At times, you may be forced to live for a time outside of your home due to extensive damage, complete destruction of the home, or an ordered evacuation. In these circumstances, up to a stated limit Coverage D will help pay for additional living expenses incurred by this change in housing. This can include storage costs, motel costs, or even groceries.

Section II insurance includes the following:

  • Coverage E (Personal Liability): This coverage applies when you are held legally responsible, due to negligence, for someone being injured or their property damaged. This will help you pay for legal expenses like attorney fees, finds, and settlements.
  • Coverage F (Medical payments): A limited amount of money is available to cover the medical expenses of a person (not yourself or your family) who is injured by accident on your property by accident.

North Carolina offers these types of coverage in various forms. They differ based on the kind of residence you dwell in (home, apartment, or condominium) as well as the range of protection you desire. All North Carolina insurance packages insure a number of “perils,” or damaging events like fire or theft – different insurance packages will insure for more or fewer of these perils.

When purchasing home insurance, you may wish to keep in mind what is NOT covered by your home insurance. If you wish for insurance, you need to purchase it separately, or obtain an endorsement. Most North Carolina policies offer no protection against flood, earthquakes, mudslides, mudflows, or landslides. In addition, North Carolina law permits many insurance companies to exclude insurance coverage for windstorms and hail, which are commonly covered perils in other states.

Common Risk Factors in North Carolina

North Carolina is somewhat of a catch-all when it comes to natural disasters – no matter where you reside in the state, properties are at risk of damage from tornadoes, floods, hurricanes, lightning strikes, snow and ice storms. While damage caused from ice storms and wildfires from lightning strikes is a common feature in North Carolina home insurance plans, additional coverage may be needed for wind and flood damage.

Tornados can strike suddenly and without warning, with severe winds that can destroy roofing, rip holes into homes by throwing objects into it at high speeds, warping foundations, and pulling away structures like sheds or porches. In 2017, 31 tornadoes touched down in North Carolina, concentrated mainly in the western side of the state. While wind damage may not be covered by North Carolina home insurance, it can be purchased separately, at an additional cost

Flood damage is one of the most common causes of property damage in the United States, and North Carolina is no exception. Tsunami, storms, and hurricanes all contribute to high levels of flooding in North Carolina. While flood insurance is not covered by homeowners” insurance, it can be purchased separately from the National Flood Insurance Program, provided you live in a community participating in this federal program.

Insurance Demographics/Statistics in North Carolina

Home insurance prices aren”t one-size-fits-all – they vary from town to town, and between individual to individual. There are a host of calculations that go into determining your final home insurance price, including things like local crime rates and your credit standing.

Your Home”s Value

Your home”s value is likely the single greatest influence on your final home insurance cost, as all of your coverage is based on a percentage of your home value. But what is home value? It can be calculated in two ways. More commonly, home value is calculated in terms of replacement cost, meaning the money it would take to completely rebuild your home using similar materials and with current labor costs. Another way to calculate home value is by using actual cash value. This is essentially replacement cost, minus any existing damage or depreciation in the home.

North Carolina home values are a little below average – $208,001 compared to the national average of $248,857. This may translate into modest savings for home insurance in this state. It”s important to remember that the sale price of the home is not equivalent to the home value an insurance company would assess. The sale price of a home includes the cost of the land the home is on, which is not part of the calculations for replacement cost or the actual cash value of a home.

Local Crime Rates

Nearly all basic home insurance protects the home from property crime – whether that be theft, vandalism, arson, or broken glass. To protect from losses in areas with high property crime rates, insurers may increase the price of home insurance premiums. North Carolina property crime rates fall above the national average of 1.18%, which may result in higher insurance premiums. Information collected from the FBI Uniform Crime Reporting Program in 2018 shows a 2.32% property crime rate in North Carolina, after taking out incidents of auto theft.

Your Income and Education

Most insurance companies will offer more favorable home insurance rates if you have good credit – and some predictors of good credit include higher incomes and a college education. Besides there”s no denying that a higher income can make insurance premium payments easier!

In North Carolina, household income falls on the lower end – averaging $53,855 compared to the national average of $64,179. Educational attainment falls a few percentage points behind the national average, with 30.5% of people above age 25 having a bachelor”s degree or higher, opposed to 32.06% nationally.

Where To Purchase Home Insurance in North Carolina

Having an understanding of average policies and property risks in North Carolina shouldn”t be the end to your search for excellent home insurance. To get a detailed picture of what insurance policy would be best for your unique needs, you should compare a number of insurance companies and policies. Agilerates.com can help, giving you accurate quotes for your situation from a wide range of insurance companies. You can shop around even if you already have homeowners insurance – you have the opportunity to switch insurance plans at renewal time every year. According to the Pulse Whitepaper from iii.org, only 44% of homeowners compare prices of different insurers at renewal time, and only 17% do so online. That means more than half of all homeowners are leaving money on the table at renewal time. Use Agilerates.com online form to get matched with a local agent, get free quotes, and shop around!