For most North Carolinians, the biggest financial investment you’ll ever make is buying a home. Homeownership is much more than the cost. It’s also a big commitment and bigger responsibility. Make sure you protect yourself and your investment with the right homeowners policy for your North Carolina home.

Here’s what you need to know.

What is Home Insurance?

Home insurance provides financial protection for your home, your personal property, and your personal liability. A homeowners policy includes multiple types of coverage to account for the risks you face when you own a home and what could be damaged or lost as a result of those risks.

There are multiple types of home insurance policies, each offering a different level of coverage. The most common one for a single family home is an HO-3 policy. But there are also other policies that offer a bare minimum of coverage as well as policies for mobile homes, condos, and older homes.

What Does Home Insurance Cover?

Home insurance can include up to six forms of coverage in a policy:

  1. Dwelling
  2. Other Structures
  3. Personal Property
  4. Loss of Use
  5. Personal Liability
  6. Medical Payments

Homeowners insurance pays you in one of three ways, based on what you choose for your policy:

Actual Cash Value: Depreciation is used to determine the value of your property; you will receive less than the cost to replace the lost property, for the structure or personal belongings.

Replacement Cost: Your home will be repaired or rebuilt without factoring in depreciation – up to your policy limits.

Extended Replacement Cost: Your home will be repaired or rebuilt to its former state, even if the cost exceeds your policy limits. This coverage provides protection against sudden labor and materials cost increases, especially after a widespread disaster.

Specific perils are often covered in standard homeowners policies:

  • Fire and smoke
  • Lightning
  • Hail and windstorm
  • Explosion, riot or civil commotion
  • Damage caused by vehicles
  • Damage caused by aircraft
  • Theft, vandalism, or malicious mischief
  • Vandalism or malicious mischief
  • Falling objects
  • Weight of ice, snow or sleet
  • Overflow of water from burst pipes or other household applies
  • Damage from hot water heater, HVAC, or fire protection system
  • Damage from frozen pipes
  • Some damage from electrical currents

Certain perils are not covered in a homeowners policy:

  • Earthquakes
  • Flooding
  • Damage caused by lack of maintenance or neglect

You can purchase coverage for earthquakes and flood damage. Both can happen anywhere at any time, including in North Carolina. Homeowners located in low risk areas won’t pay a lot for coverage but you’ll still have peace of mind.

To understand your North Carolina home insurance policy, it’s important to understand each form of coverage.

A. Dwelling

This is coverage for your home. It does not include outbuildings like sheds, detached garages, or gazebos. Dwelling coverage repairs and replaces the structure of your home, including plumbing, electrical, permanent HVAC, and more.

B. Other Structures

Other structures coverage allows you to insure a shed, gazebo, detached garage, or other structure that is unattached to your home. The standard coverage is 10 percent of your overall policy, but you can purchase more coverage if needed.

C. Personal Property

Think of all of your personal possessions from clothes and electronics to kitchen appliances and furniture. Personal property coverage pays to replace them after a covered peril. In most standard policies, personal property is given a specific amount of coverage, though you can increase that amount for a higher premium.

If you own high value items such as collectibles, antiques, jewelry, art, and other items, a standard homeowners policy will not provide enough coverage. Ask your North Carolina independent insurance agent about a high value personal property rider or separate policy.

D. Loss of Use

If your home is so damaged that you can’t live in it, your homeowners policy will pay for certain living expenses until you can. This includes housing, meals, and storage for your property.

E. Personal Liability

Liability coverage is one of the most important forms of protection your homeowners insurance policy provides. You will be covered if you’re legally responsible for injuries or damage to third parties – vendors, guests, and other non-residents – who visit your property.

This coverage includes:

  • Bodily injury
  • Property damage

This can include slips and trips on your driveway, a dent or other damage to the third-party’s vehicle, pet bites, falls, injuries in a pool or trampoline, among other accidents. Exceptions apply.

Liability also protects you if the injured party sues you by covering legal fees, providing legal defense, and paying any settlements or judgements up to your policy limit.

F. Medical Payments

This coverage will pay the medical expenses for a third-party who is injured in or at your home. Medical payments won’t pay for your injuries or injuries to anyone who lives in your household.

Understanding Home Insurance Limits

Your homeowners insurance will include a separate monetary limit for each portion of the policy. That is the maximum amount that will be paid out in a covered claim minus any deductible.

  • Dwelling and Other Structures requires a policy limit of at least 80 percent of the full replacement cost.
  • Liability coverage requires a minimum policy limit of $100,000.
  • Medical Payments coverage requires a minimum policy limit of $1,000.

It’s important to understand that these minimums won’t be enough for large claims such as rebuilding your home or paying for a major injury and subsequent lawsuit.

The policy limits for your North Carolina home and other structures should be enough to fully rebuild your home if it's destroyed. We also highly recommend choosing Total Replacement or Extended Total Replacement coverage to fully maximize your policy limits.

Your personal property limit should be enough to fully replace the entire contents of your home. As we mentioned before, if you own high value items, you need separate coverage for them.

Each year, it’s important to review your policy limits to make sure you’re not underinsured.

Frequently Asked Questions About Home Insurance in North Carolina

Is homeowners insurance required in North Carolina?

Homeowners insurance is not required by state law in North Carolina, but if your home is financed with a mortgage lender, you will be required to purchase coverage.

Once you purchase a home insurance policy, you will be subject to the mandatory minimum policy limits as required by North Carolina.

How much does homeowners insurance in North Carolina cost?

The average cost of a homeowners policy in North Carolina is $1,700, just under the national average of $1,784. The actual cost of home insurance varies from home to home and person to person. The cost you’ll pay depends on multiple factors:

  • Type and size of your home
  • Replacement cost of your home, structures, and personal possessions
  • Policy limits you select
  • Deductible you select
  • Previous claims filed

Are wind and hail insurance mandatory in North Carolina?

Wind and hail insurance are not mandatory in North Carolina, but this isn’t a coverage you want to skip. Thousands of North Carolina homes are damaged each year by hail as small as an inch. Most homeowners policies will include some level of coverage but you can purchase additional coverage, as well.

How Charlotte Insurance Can Help

At Charlotte Insurance we are committed to helping you navigate through one of the most critical policy decisions you will have to make during your lifetime. In order to secure you the most appropriate and efficient coverage, it’s important to us that we take the time to truly understand your unique insurance needs—because let’s face it, every home and North Carolina homeowner is unique—so why shouldn’t your policy be?

As one of the leading independent insurance brokers in North Carolina, we have the ability to shop multiple carriers nationwide, in order to get you the best possible homeowners insurance at the most competitive rates—no matter where you are located across the region, we’re here to help!

Contact us today for a free estimate or to ask questions about your current policy.

Homeowner's Insurance Made Easy


Watch this video to learn more about the importance of homeowner's insurance.

In addition to serving Charlotte and the surrounding areas, we specialize in the following:
Mooresville Home Insurance, Cornelius Home Insurance, Lincolnton Home Insurance, & Huntersvile Home Insurance.