The homeowners forms, Coverages A through F, perils, exclusions and loss settlement are covered in the national Homeowners guide. North Carolina homeowners policies are written on the North Carolina Rate Bureau's homeowners program, and several features of that program, as described by NCDOI, are tested. North Carolina also has two residual markets for property, the Coastal Property Insurance Pool and the FAIR Plan, and a set of statutory protections for residential policyholders.

Coverage limits and features on North Carolina homeowners policies

NCDOI describes these normal limits under the Rate Bureau program. Higher limits are available for added premium.

• Structure of the policy. Section I is the property coverages, A through D. Section II is the liability coverages, E and F. Coverage F (medical payments to others) doesn't pay for injuries to the insured or household residents.
• Setting Coverage A. Leave the value of the land out of the replacement cost.
• Required by law? Homeowners insurance isn't required by North Carolina law. A mortgage lender may require it.
• Replacement cost after a total loss. An insured who takes an ACV settlement may claim the extra replacement cost within 180 days after the loss, under the loss settlement condition.
• Small coverages:
  • Tree removal is paid up to $500 per loss when a tree damages a structure or blocks the driveway.
  • A neighbor's tree that falls on your home is generally paid by your own policy.
  • The refrigerated property endorsement pays up to $500, above a $100 deductible.
• Optional coverages. Water backup needs its own endorsement. Flood is excluded, so buy NFIP or private flood coverage.
• Perils warning page. A residential policy that excludes perils such as flood, earthquake, or windstorm and hail must include a 16-point warning page naming them, placed before the declarations, at issue and at each renewal (G.S. 58-44-60).
• Named storm deductible. A "named storm" includes hurricanes, tropical storms and tropical depressions (58-45-5(6a)). The deductible period runs from the first watch, warning or advisory for any part of the state until 24 hours after the last one ends.
• Mobile homes are written on the MH (C) and MH (F) forms. Losses are settled at ACV unless replacement cost is bought. MH (C) covers earthquake without an endorsement, and some mobile home policies include flood.

Rating and underwriting protections

• Consent to rate. A homeowner may agree to pay more than the Rate Bureau rate. A notice comparing the approved and charged premiums must appear on page one of the declarations, or on a page before it, in 14-point bold capitals (58-36-30(b1)).
• Coastal mitigation credits. The Rate Bureau's credits for beach and coastal homes are based on mitigation and construction features (58-36-15(d1)). Homes built or re-roofed to the IBHS FORTIFIED standard may qualify.
• Wind and hail split. Each territory's rate must show the wind and hail portion separately (58-36-15(d3)).
• Age of the home. Refusing or limiting coverage because of the age of the home is unfair discrimination unless it's for solvency or required by law (58-63-15(7)).
• Credit scores may be the sole basis only for a discount (58-36-90).
• Unpaid other policy. Canceling a paid policy because another policy is unpaid is an unfair practice (11 NCAC 04 .0422).

Coastal Property Insurance Pool (NCIUA, Article 45)

• The North Carolina Insurance Underwriting Association, formerly the Beach Plan, writes essential property insurance. That means the standard fire policy plus extended coverage and vandalism. It also writes wind and hail coverage in the beach area and 18 coastal counties.
• Membership is required of insurers writing essential property insurance.
• Applying:
  • Anyone with an insurable interest may apply.
  • Neighborhood or environmental hazards beyond the owner's control don't count against insurability.
  • A denied applicant may appeal to the Commissioner.
• Policies run one or three years. A wind-only policy requires proof that essential property coverage from a licensed insurer is in force.
• Producers. A producer appointed by a member insurer isn't the Association's agent but may temporarily bind coverage under its guidelines.
• After a catastrophe, wind losses are adjusted by the licensed insurer that wrote the primary policy.
• A catastrophe recovery charge after a deficit can't exceed 10% of premium a year.

FAIR Plan (Article 46)

• Operated by the North Carolina Joint Insurance Underwriting Association. It covers all areas except the beach area.
• It offers basic property coverage, including farm risks, plus extended coverage, optional perils and crime.
• A submitting producer isn't the Association's agent. The Commissioner reviews the plan of operation every year.
• The General Assembly intends both plans to be the market of last resort, not the first choice (58-45-1, 58-46-1).

Claims after a loss

• Disaster mediation (58-44-70 to 58-44-90). When the Commissioner orders it after a declared disaster, residential property disputes may go to mediation:
  • A disputed claim must involve at least $1,500.
  • The insurer mails notice of the right to mediate within 5 days of learning of the dispute.
  • The insured must request mediation within 60 days after a denial.
  • The insurer pays the mediator's fees.
• Mortgagees and loss payees are paid within 90 days of the loss or 60 days of proof of loss, whichever is longer (58-43-15).
• A lender must accept a producer's binder on a 1–4 family home if it meets statutory terms. These include 10 days' notice to the mortgagee before cancellation (58-3-140).

Common exam traps

• Under the North Carolina program, Coverage D is normally 20% of A per NCDOI. The renters' version is 20% of C.
• Beach and coastal property goes to the NCIUA (Coastal Property Insurance Pool). The rest of the state's residual market is the FAIR Plan.
• Homeowners insurance isn't legally required in North Carolina.
• Disaster mediation: $1,500 threshold, 60 days to request, and the insurer pays.