Fundamental Questions to Ask When Purchasing Homeowners Insurance on the Outer Banks

pexels-photo-112367Purchasing your first beach home on the Outer Banks is an exciting experience. If you have never been a beach homeowner than there are many questions you may have concerning the types of insurance available for you. The Outer Banks is the perfect place to buy your new home, but you should remember that hurricanes are prone to the area so you should familiarize yourself with the coverage included in your homeowner’s policy. It’s very important for homeowner’s to understand the main types of policies that are available for vacation rentals or second homes. Most insurance policies on the Outer Banks are either a homeowner’s policy (HO3), which provides broader coverage and is not available on the dwelling and fire (DP2) homeowner’s policy. It is common for most homeowners to have HO3 on their primary home because it provides better coverage and DP2 on their vacation rental home. Below are some of the most popular insurance questions buyers have when purchasing policies for their home on the Outer Banks.

Can I get coverage for hurricanes?

Coverage is available for wind damage, which covers  damage that is caused by a hurricane. The Outer Banks has two types of policies that cover wind damage, which include the standard homeowner’s policies and additional policies are offered through the Coast Property Insurance Pool, formerly known as the beach plan.

 

Insurance Products offered in the Beach Plan:

  • Dwelling Fire (Beach Territories only)
  • Commercial Fire (Beach Territories only)
  • Homeowner (Beach and Coastal Territories)
  • Dwelling Windstorm and Hail (Beach and Coastal Territories)
  • Homeowner Windstorm and Hail (Beach and Coastal Territories)
  • Commercial Windstorm and Hail (Beach and Coastal Territories)
  • Crime (Beach Territories only)

 

What is the beach plan?

The Coastal Property Insurance Pool offers commercial, homeowner and dwelling windstorm coverage and homeowner coverage to any person having an insurable interest in property located in the 18 eligible coastal counties in North Carolina. The Coastal Property Insurance Pool also offers commercial fire and dwelling fire in a more limited area defined as the beach area (comprised of North Carolina south and east of the inland waterway, including the Outer Banks.

The Coastal Property Insurance Pool is defined by the North Carolina General Statutes as the “Market of Last Resort”  it is highly recommended that property owners attempt to obtain insurance in the standard market. After researching your home, your Insurance agent will recommend placing coverage either in the standard market or in the Coastal Property Insurance Pool.

 

Can I get coverage for flooding?

There is coverage for rising waters that are a direct result from rain or a hurricane. Flood insurance is federally subsidized on the Outer Banks and depends on which flood zone your property is located on. This coverage is separate from your homeowner’s policy. If your home follows the regulations set by the National Flood Insurance Policy, than you will be granted coverage. 

 

Is flood insurance mandatory?

Flood insurance is not required by law on the Outer Banks. However, federally insured lenders require flood insurance for the life of their lien when the home is located in a flood zone. If your home is not in a flood area and you haven’t secured a mortgage than the insurance is not mandatory by law. However, if your home is located near the ocean, than the insurance is highly recommended.

 

Are there policies available for vacation rentals?

If your vacation home rents less than 25 weeks a year, than there are rental home policies available. This policy is slightly higher than the beach plan, but the owner can obtain a separate wind and hail policy.

 

What questions should I ask my Insurance Agent?

  • What is my home’s value?
  • Am I paying for coverage I don’t need?
  • What is the value of the assets in my home?
  • How available is my insurance company if I have questions?
  • What will my insurance company do after a hurricane?
  • How quickly will they respond if I have a claim?

You should also discuss your options with multiple insurance companies before confirming the coverage. It is best to receive different opinions and conduct research to learn more about the property location. Make sure you fully understand the terms of your insurance policy you are applying for.  Work closely with the agent and make sure you provide all property documents in a timely manner.

Eillu has an experienced team prepared to help with your Outer Banks property purchase. Contact us to learn about buying an Outer Banks home!

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