Basic North Carolina Home Insurance

basic-north-carolina-home-insuranceIn North Carolina, you generally must carry home insurance if your house is mortgaged, not because the state requires it, but because your mortgage company will. It is wise to keep insurance in force even if you do not owe money on your home, because should a catastrophe occur, you would want to be able to replace or repair what was lost.

A multi-peril policy is one in which a range of perils are covered under one policy, which saves you money. It would be much more expensive to cover each peril separately. A peril is a cause that results in damage or loss, such as theft or fire. An insurance policy will also cover damages sustained by other people or their possessions while on your property.

Your basic policy will not cover losses from mudslides, mudflows, floods, earthquakes or landslides. Talk to companies about special coverage to take care of these perils.

North Carolina home insurance policies have two sections.

Section I

Section I coverage pertains to dwellings, other structures, personal property and loss of use.

Coverage A (Dwellings) protects your home and attached structures if certain events occur. It also covers plumbing, permanently installed air-conditioning systems, heating, electrical wiring and some supplies on or next to the premises that are there to build, alter or repair the home or other structure.

Coverage B (Other Structures) provides protection to structures that are not attached to the dwelling, like detached garages or sheds. Normally, coverage for other structures is limited to 10% of the dwelling limit, but you can increase that by paying additional premiums. It is wise to carry a minimum of 80% of the replacement cost of other structures.

Coverage C (Personal Property)

This coverage is to replace personal property that is lost by covered perils. It includes things like your clothing, furniture, appliances, and other personal property. Items of unusual value, such as gun collections, usually require a separate policy. See your agent for your particular possessions coverage.

Coverage D (Loss of Use)

If your home is damaged so that you cannot live in it, Loss of Use coverage will pay any living expenses beyond your normal ones. Usual coverage is 20% of Coverage A.

Section II

Section II coverage pertains to personal liability and medical payments to others.

Coverage E (Personal Liability)

If someone should be injured or sustain loss while on your property, this coverage will take care of those expenses.

Coverage F (Medical Payments to Others)

This one is really self-explanatory. If someone is hurt on your property, this coverage will take care of medical expenses incurred as a result.

So there you have it; a basic understanding of North Carolina home insurance!