How and Where to Get Flood Insurance in the Carolinas

By: Bob Bencivenga

How and Where to Find Flood Insurance in North and South Carolina, Without Taking Out Another Mortgage

Since the disaster of Hurricane Katrina the nation has taken a long hard look at the insurance industry, with sweeping changes for consumers, especially those living in coastal areas. From Florida to Long Island, insurance companies are raising their rates drastically, or even refusing to cover people. Thankfully states like North Carolina and South Carolina have taken steps to protect their coastal areas and the people who live their. In addition, the Federal Government has also stepped in to help alleviate the troubles caused by flooding, which happens to be 26 times more likely than fire, according to the Federal Insurance Administration.

The Federal Emergency Management Agency (FEMA) has identified over 19,000 communities nationwide which are susceptible to flooding. For those residents, FEMA has established the National Flood Insurance Program. To find out if your community participates in the program, visit www.fema.gov/fema/csb.shtm. North Carolina has 486 participating areas, and South Carolina has 205 areas. The numbers include both towns and counties, so there is a good chance your area is covered.

The National Flood Insurance Program covers residences, commercial properties, and renters. The insurance isn't prohibitively expensive, especially considering what you can loose. Premiums average around $400 per year for residences and provide coverage for up to $250,000 of structural damage, and $100,000 of personal property. Renters are able to cover up to $100,000 of personal property. Commercial property premiums are slightly higher, and provide coverage of up to $500,000 combined for structural and property damage. The first step in educating yourself about flood insurance is to visit www.floodsmart.gov, which is the National Flood Insurance Program's website. Typically deductibles for the policies run from $500 to $1,000. These are standard deductibles, and do not change from company to company.

The National Flood Insurance Program's limit of $250,000 for structural damage and $100,000 for personal property has led many people to opt for additional insurance from private companies. Remember, the bank is still going to expect its mortgage payments, even if your home is destroyed. The American International Group allows policyholders to insure their property for up to its full value, and premiums start at around $1,200 for $1 million in coverage and increase from there, as you increase your coverage limit. Rates vary, so check at www.aig.com. Also, using www.floodsmart.gov, you can enter your address to first check your flood danger, and then find local insurance companies in your area. It will pay off to speak with a few companies to find the best terms of service, premiums, and deductibles. Another point to keep in mind is that flood coverage does not cover damage caused by wind or hail. You'll need a special rider or policy for wind and hail damage. If you are having trouble finding a private insurer, talk to your neighbors, or call your state insurance department for recommendation. You can use the site www.naic.org/state_web_map.htm to find your state's agency. Here is where checking with a few companies can make a difference in your premiums and coverage.

Luckily, for residents of coastal North Carolina and coastal South Carolina, their states have supplemental plans that cover things such as hail, windstorms, vandalism, theft, and fire. Residents can participate in the FAIR Plan, which stands for Fair Access to Insurance Requirements. However, in order to participate in the FAIR Plan you have to make improvements to your home designed to mitigate the effects of such calamities. Efforts such as repairing your roof, using wind resistant materials, and increasing security measures all qualify. In South Carolina the FAIR Plan administration office number is 803-737-6180. The FAIR Plan offers up to $1,500,000 in coverage, and you can find information at the South Carolina Department of Insurance at www.doi.sc.gov, or the North Carolina Department of Insurance at www.ncdoi.com. You can also contact your local insurance agent for information regarding the FAIR Plan. Both North Carolina and South Carolina participate in the Beach and Windstorm Plan. Coverage is limited up to $1,500,000, and you can find more information at the same resources as listed above for the FAIR Plan. Like the National Flood Insurance Program, the premiums and deductibles of the FAIR Plan and Beach and Windstorm Plan are standardized. Shopping around with different providers is still smart though, as you want to choose a reputable company.

Living in a beautiful beach town such as Beaufort, Charleston, Hilton Head, and Myrtle Beach in South Carolina; or Wilmington, Morehead City, Oriental, and New Bern in North Carolina is very appealing. But you must take the proper precautions. In many of these areas, you can't even get a mortgage without buying a flood insurance policy. Make sure your insurance covers all possible damage to your home and belongings. Some policies do not cover fire, although your regular homeowner's policy should, and some do not cover water damage from a burst pipe. Make sure you read the fine print and get a combination of policies, so that you'll be fully protected.

Other great insurance resources we've found are the Insurance Information Institute at www.iii.org, and the Insurance Agents and Brokers of America, found at www.iiaba.net. Buying insurance may seem expensive at first, but with the possibilities of hurricanes and tornadoes, you'll have peace of mind which is priceless.

Visit www.PlacesOfValue.com for more articles on best places in North Carolina and South Carolina, relocation made easy, top retirement communities, cost of living, and designing and building your Dream Home.

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