Homeowners Insurance - The Ultimate Guide

North Carolina Homeowners Insurance – The Ultimate Guide

Estimated reading time: 8 minutes

North Carolina is known for its natural beauty.  The state offers residents and visitors the opportunity to experience the wonders of the Blue Ridge Mountains and the waves of the Atlantic Ocean.  

What makes the state wonderful, also makes home insurance in North Carolina a challenge.

To navigate the North Carolina Home Insurance market, you need a trusted Advisor that can guide you through the coverage options and risks!

Do A Google Search for “homeowners insurance nc” and you will be bombarded with search results from LARGE insurance companies wanting to SELL YOU something.

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Google Search Results – homeowners insurance nc

We hope this Homeowners Insurance Resource will help guide you to making the best decision for you and your family.

What Does Homeowners Insurance Cover?

Homeowners Insurance is designed to protect one of a family’s largest assets…their home.

The standard Home Insurance policies provide coverage for a few major things

  • Property Damage To Your Home (the actual building)
  • Property Damage To Your STUFF
  • Personal Liability associated with your home and property

Insurance Carriers have created policies that combine a number of common features into what they call:

Homeowners Insurance Policy Forms



Learn More

We have a resource that answers the question: “What Does Homeowners Insurance Cover?

Does Homeowners Insurance Cover Water Damage?

Water Damage is one of the leading causes of home insurance claims.

In general, home insurance companies will cover water related claims if the damage is considered “Sudden And Accidental”.

Typical COVERED Water Damage Claims might include:

  • Damage Caused By Rain And Snow
  • Water Damage Caused By A Burst Pipe
  • Hot Water Heater Malfunction

While man water related claims will be covered, you might be better served knowing what will NOT be covered:

  • Flood (Flood Insurance Is Needed In order To Have Coverage)
  • Backup Of Water And Sewer (Can Be Added By Endorsement To Some Policies)
  • Poorly Maintained Plumbing

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We have a resource that answers the question “Does Homeowners Insurance Cover Water Damage?” 

What Are The Different Types Of Home Insurance Policies?

In North Carolina, there are really only 2 Main Homeowners Insurance Policy Forms.

  • Homeowners Policy Form 3 – HO3
  • Homeowners Enhanced Form – HE7

Both of these policy forms are meant to cover Owner Occupied single family homes.

While the policy forms are similar, there are distinct differences you should be aware of.



Learn About The Homeowners Insurance Special Form (HO3)

The HO-3 Form may be used to provide coverage on a single family home or townhouse. Coverage is normally provided under the Special Form as follows:

  • Coverage A (Dwelling)Minimum amount determined by the individual carrier
    Coverage A provides coverage for the actual “structure” if it is damaged by certain events. Coverage A also provides coverage for certain fixtures within the home such as the plumbing, electrical, and HVAC system. Most Insurance Contracts dictate that you insure the structure to a minimum of 80% of the “Replacement Cost” of the home.
  • Coverage B (Other Structures)10 Percent of Coverage A
    Coverage B provides coverage for other structures on the premises that are not attached to the primary dwelling. Coverage B is normally limited to 10 percent of the Coverage A limit. However, additional coverage can be purchased if needed.
  • Coverage C (Personal Property)50 Percent of Coverage A
    Coverage C provides coverage for your personal belongings or the belongings of your family members who live with you. Coverage C is normally 50 percent of Coverage A (if coverage is also provided for the dwelling under the policy). There are limitations for certain types of “personal property” within the standard policy.
  • Coverage D (Loss of Use)20 Percent of Coverage A
    Coverage D provides coverage that will help with additional living expenses if your home is damaged by a covered cause of loss. Coverage D is normally 20 percent of Coverage A.
  • Coverage E (Personal Liability)Minimum Coverage of $100,000
    Coverage E provides coverage in the event you or a resident of your household are legally responsible for injury to others. This coverage will not protect you in the event of an intentional act.
  • Coverage F (Medical Payments)Minimum Coverage of $1,000
    Coverage F pays for reasonable medical expenses for persons accidentally injured on your property.

Learn About The Homeowners Insurance Home Enhancement Coverage (HE7)

The HE-7 Form (with the HE-21 Extended Enhancement Endorsement) is the most complete Homeowners Form in North Carolina today. At ALLCHOICE, we refer to the HE-7 (w/ HE-21) as a “regular homeowners form (HO-3)” on steroids! Coverage is normally provided under the HE-7 Form as follows:

  • Coverage A (Dwelling)Minimum amount determined by individual carrier (typically higher minimum than the HO-3)
    Coverage A provides coverage for the actual “structure” if it is damaged by certain events. Coverage A also provides coverage for certain fixtures within home such as the plumbing, electrical, and HVAC system. Most Insurance Contracts dictate that you insure the structure to a minimum of 80% of the “Replacement Cost” of the home.
  • Coverage B (Other Structures)20 Percent of Coverage A
    Coverage B provides coverage for other structures on the premises that are not attached to the primary dwelling. Coverage B is normally limited to 10 percent of the Coverage A limit. However, additional coverage can be purchased if needed.
  • Coverage C (Personal Property)70 Percent of Coverage A
    Coverage C provides coverage for your personal belongings or the belongings of your family members who live with you. Coverage C is normally 50 percent of Coverage A (if coverage is also provided for the dwelling under the policy). There are limitations for certain types of “personal property” within the standard policy.
  • Coverage D (Loss of Use)20 Percent of Coverage A
    Coverage D provides coverage that will help with additional living expenses if your home is damaged by a covered cause of loss. Coverage D is normally 20 percent of Coverage A.
  • Coverage E (Personal Liability)Minimum Coverage of $100,000
    Coverage E provides coverage in the event you or a resident of your household are legally responsible for injury to others. This coverage will not protect you in the event of an intentional act.
  • Coverage F (Medical Payments)Minimum Coverage of $1,000
    Coverage F pays for reasonable medical expenses for persons accidentally injured on your property.

Should I choose the HO-3 of the HE-7? (PDF)

Learn More

We have a resource that answers the question “What Are The Different Types Of Home Insurance Policies?” 

How Much Does Home Insurance Cost In North Carolina?

Home Insurance Premiums vary greatly across the state of North Carolina. 

In general, North Carolina Homeowners Rates are middle of the road when compared to the rest of the nation.

As of 2018, Home Insurance Rates In North Carolina ranked 35th in the nation.

The actual home insurance premium depends on a number of factors, accordingly, the premiums you pay will vary greatly as well.



How Are Home Insurance Rates Calculated?

Home Insurance Rates Are Calculated different from carrier to carrier, but in general, the following factors are used by most companies.

  • Location
  • Year Of Construction
  • Type Of Building Construction
  • Size Of Home
  • Credit History
  • Claims History
  • Other Insurance With The Same Carrier
  • Deductible

Most carriers will use the criteria listed above as a starting point for calculating an accurate Home Insurance Rate.

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We have a resource that answers the question “How Much Does Home Insurance Cost In North Carolina?” 

Insurance For Special Stuff And Optional Homeowners Endorsements

Home Insurance Policies provide standard coverage(s) for most items in, on, and around your house.

However, the base policy forms can lack coverage or amounts of coverage you need!

Instead of having to purchase EXTRA insurance products to cover your needs, often you can simply endorse your current homeowners policy to add coverage.

Insuring Special Belongings

Whether you are an avid collector, or just an everyday person that has acquired some special belongings…you should pay close attention to how those items are treated on your Homeowners Insurance.

With many “special” items, the standard policy either excludes certain losses or can limit the amount of coverage you have for certain items.



Gun Insurance

Guns and Firearm related equipment (ammo, sights, scopes, etc) can be pricey. 

Did you know that your homeowners insurance provides limited coverage for your firearms?

The type and amount of coverage you have depends on the type of policy you have.

  • $2,500 Coverage On The HO3
  • $10,000 Coverage On The HE7

Want More Information on Gun Insurance? We have a resource that dives deep into Gun Insurance

Learn More

We have a resource that answers the question “Gun Insurance – What Does Homeowners Insurance Cover?” 

Optional Homeowners Endorsements

Guaranteed Replacement Cost Coverage

Guaranteed Replacement Cost Coverage provides for the Replacement Cost Settlement of your home in the event of loss. If your policy has been endorsed with this coverage, the insurance company will pay the difference between what your house is insured for and the actual amount it costs to rebuild the home (subject to certain limitations).

Replacement Cost Coverage (Add’l 25% or 50%)

Replacement Cost Coverage provides for the Replacement Cost Settlement of your home in the event of loss. If your policy has been endorsed with this coverage, the insurance company will pay the difference between what your house is insured for and the actual amount it costs to rebuild the home up to an additional 25% or 50% (depending on the endorsement) should the reconstruction exceed the Dwelling Limit stated on the declaration page.

Personal Property Replacement Cost

Personal Property Replacement Cost Coverage extends the replacement cost settlement to Coverage C of your policy. There are certain limitations, so be sure to ask your agent for further information.

Watercraft Endorsement

The Watercraft Endorsement extends the liability coverages provided under Coverage E & F if your policy.

Am I Required To Purchase NC Home Insurance?

No! There is no law in North Carolina that requires homeowners to purchase insurance on their home.

On the other hand, if you have a mortgage on your property, the lender will require that you purchase insurance.

Normally, the mortgage contract states that you must purchase insurance in an amount equal to, or greater than, your mortgage or for Replacement Cost.

Find Local Homeowners Insurance

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