Coastal Home Insurance Tips (Part 1)
There are four location factors you should understand when purchasing coastal home insurance:
1. Proximity to the beach or water
2. Will the house be your primary residence or will you offer the home as a rental?
3. Is the house required to have flood insurance?
4. Type of construction
Each of these factors will affect the type and cost of your insurance. A knowledgeable, experienced real estate agent will be helpful and can connect you with a knowledgeable insurance agent who can provide detailed information.
How do I know what kind of coastal home insurance I will need if I purchase in Landfall or near Wrightsville Beach?
Often your real estate agent will be able to lead you in the right direction and let you know if you may need “wind and hail” or flood coverage – or s/he will have a trusted insurance agent to answer your questions and concerns, including explaining the zone your purchase is located in. If you will have a mortgage on your home, it is likely that your lender will have a requirement for these coverages, as well as a minimum amount. If the property is in a Special Flood Hazard Area (Zones A, AE, V or VE) and you have a federally-backed mortgage, flood insurance will be required. Other coverage options are available upon request.
What factors impact the cost of my insurance?
There are several factors that may impact the cost of your homeowners’ insurance coverage. Location is a major factor. Rates for wind and hail may be determined based on zip codes. There may be different rates for south or east of the Intracoastal Waterway (beach side), the eastern coastal zip codes in New Hanover, Brunswick and Pender Counties (not on the beach) and the western zip codes in those counties. Other factors that may impact the rate include whether the home is brick or frame construction, whether it has a complete hip style roof, whether it has a Fortified roof or if there are opening protection systems for windows in place. Some companies may not offer coverage for homes built before a certain date, while some may offer discounts for newer homes.
What is “Wind and hail”, and do I need it?
A regular homeowners’ policy which is most commonly written as a form HO3 is an “all perils policy.” That means it covers all perils other than specifically excluded perils. You may have seen a warning on the front of your policy stating that the policy does not cover you against earthquakes, mudslides, mudflows or landslides, etc. In the 18 coastal counties of North Carolina insurance companies can also exclude the perils of wind and hail. So unlike the other 82 counties in the state where the wind and hail coverage is included in your home owner policy, on the coast it may not be included. If that is the case, you will be notified, and the agent or company that helps you get the coverage will offer you a supplemental policy for those perils.
Next month, we’ll cover more coastal home insurance tips like flood protection. See you then!
North Carolina Farm Bureau Mutual Insurance Group