Flood insurance in North Carolina: What it costs and how to get it

Do North Carolina homeowners need flood insurance?

In short: Yes, most insurance experts recommend that North Carolina homeowners have a flood insurance policy in addition to their home insurance. North Carolina poses a high flood risk, with more than 1.3 million acres at risk, which rounds out to about $8 billion worth of property.  Floods affect all North Carolina regions, with the central regions of the state being particularly high risk.

Standard homeowners and renters policies do not cover flood damage, so many experts recommend purchasing a separate flood insurance policy or endorsement, although not many carriers offer flood add-ons. You can buy coverage through the National Flood Insurance Program (NFIP), which is managed by the Federal Emergency Management Agency (FEMA) or through select private insurers.

NFIP policies pay up to $250,000 for residential building losses and up to $100,000 for contents (you must buy building and contents coverage separately). Alternatively, private flood insurance may offer higher limits — plus other advantages, like replacement cost protection for contents and structures and loss of use coverage — but is typically more expensive than an NFIP policy.

How much does flood insurance in North Carolina cost?

According to FEMA, in 2019, NFIP flood claims averaged $52,000 per claim nationwide. The cost of North Carolina flood insurance varies by insurance company and depends on several factors, including your location and flood risk exposure. Recent North Carolina legislation requires greater disclosure surrounding a home’s flood risk, which could be important to potential new homebuyers. If you’re planning to purchase your home with a mortgage, your financial lender may require you to carry both home and flood insurance.

As of April 2023, FEMA determines flood insurance costs based on its Risk Rating 2.0 system. The average cost of an NFIP flood policy in North Carolina is $874 per year, but the risk-based cost is $1,363, meaning homeowners will likely see their rates increase each year to bring premiums closer to this new risk-based value.

The previous risk assessment test was very narrow; since the 1970s, risk was primarily assessed by looking at a home’s elevation and flood zone. The new system takes into account a broader number of factors that may affect the cost of flood insurance in North Carolina. If you get flood insurance through NFIP, your premium will be determined based on variables that include:

• Age and design of your property
• Flood zone in which your property lies
• Location and elevation of the property and its utility structures
• Type of coverage, such as building, contents or both
• Flood frequency in your flood zone
• Type of floods that take place in your zone, such as river overflow, storm surge and heavy rainfall
• Distance to a water source

Even with Risk Rating 2.0, rates cannot increase by more than 18 percent per year. The NFIP also continues to use FEMA’s flood map data to create catastrophe models and determine appropriate rates.

Private insurers may take different factors into consideration or weigh criteria differently. To obtain the most accurate estimates for flood insurance premiums, experts recommend requesting a quote from a flood insurance provider or speaking with a licensed flood insurance agent in your area.

When to purchase flood insurance

If you live in a moderate- or high-risk flood zone, buying flood insurance ahead of time can be an important financial protocol. You can find your property’s flood risk using the floodplain mapping tool on the North Carolina Flood Risk Information System website. In general, it may be worth considering flood insurance if you live in a high- or medium-risk county, including Wake, Guilford and Watauga counties, as well as regions along the coastline. Speaking with a licensed insurance agent could provide more context on the value of flood coverage for you and your home.

When purchasing North Carolina flood insurance, it’s better to buy it before you need it. In most cases, NFIP coverage takes effect 30 days after purchasing a policy, so buying a policy as a storm approaches may not provide coverage in time. However, the NFIP waives the 30-day waiting period under certain circumstances, such as:

• When you buy a policy while taking out or refinancing a mortgage
• When you alter your coverage when renewing an existing flood insurance policy
• When the flood damage is caused by burning or flooding of adjacent federal property

When you purchase a house or commercial property within 13 months of the property being deemed high-risk for flooding, the NFIP reduces the waiting period to one day.

How to purchase flood insurance in North Carolina

There are two ways to buy a flood insurance policy in North Carolina. While most policies are part of the NFIP program and backed by the federal government, some private policies are also available. Remember that buying a private homeowners insurance policy won’t mean you’re covered for flood insurance; you need a separate flood-specific policy or endorsement.

To purchase flood coverage in North Carolina, you can:

1. Check with your current homeowners or renters insurance provider to see if it offers private flood insurance or policies through the NFIP.
2. If your current carrier doesn't offer flood coverage, or you are unsatisfied with your quoted rates, you can explore quotes for private or federal coverage with other carriers.
3. If you know you want to purchase coverage through the CNIP, you can use the FEMA provider lookup tool to find insurers in your area that have NFIP flood insurance policies.

Frequently asked questions