Wind Insurance: Are You Covered?

Wind Insurance

As storm season ramps up, it may be a good idea to give your insurance policies a ramp up as well. Many policies include coverage for Wind and Hailstorm along with other perils. Some policies, especially for premises in high-risk areas such as coastal communities, exclude coverage and a separate policy must be sourced.

There are some private insurers that offer coverage along with state administered insurance pools in several states, including our home state of North Carolina. Wind insurance explicitly covers damage by strong winds from tornados, hurricanes, and other severe weather events. These events can be costly so before that wind blows, make sure you are properly covered.

Standard wind insurance policies may include coverage for:

  1. The Main Structure: The home or premise itself and its attached structures (i.e., an attached garage)
  2. Other Structures: Separate structures on the premise (i.e., detached garage or shed)
  3. Personal Property: The personal belongings and contents
  4. Loss of Rents: Reimbursement for the loss of rental income (if applicable)
  5. Loss of Use: Additional expenses incurred when the structure is being repaired (to include hotel stays, restaurant meals, etc.)

The FAIR Plan

The North Carolina Joint Underwriting Association (NCJUA) Insurance offers Homeowner, Dwelling, and Commercial Fire products providing coverage for windstorm and additional perils such as fire, lightning, and vandalism and malicious mischief. NCJUA’s main mission is fair access to insurance, hence why in 1969 the General Assembly created the Fair Access to Insurance Requirements (FAIR) Plan.

The FAIR Plan offers, to any person having an insurable interest in property, full peril commercial fire and dwelling fire within the state of North Carolina excluding the beach area (defined as that area of North Carolina south and east of the inland waterway including the area known as the Outer Banks). Many considered NCJUA as a last resort market for properties along the coast that are declined in the standard market.

Insurance products offered in the FAIR Plan are:

  • Dwelling Fire (All Territories except for Beach Area*)
  • Commercial Fire (All Territories except for Beach Area*)

*Beach Area is defined as 18 coastal counties in North Carolina, South and East of the Inland waterway including the area known as the Outer Banks.

Personal Coverage
It is important to be aware of a few restrictions when obtaining coverage for your home through the FAIR plan:

  1. The maximum residential limit of building coverage is $1,000,000;
  2. Personal property is capped at 40% of approved building coverage.

Deductibles start at $500 for all other perils and minimum of 1% for named storms. Coverage is written on Broad Form with specified perils. The policy can be further endorsed to include Special Provisions NC, Special Roof Endorsement, Premises Alarm or Fire Protection System NC and more.

Commercial Coverage
The NCJUA/Fair Plan can provide full peril commercial fire and dwelling fire within North Carolina including coverages for Windstorm and other broad form perils. The policy can be written on either Replacement Cost or Actual Cash Value. If coverage required exceeds maximum building limit, Excess Limits MUST be purchased.

The Coastal Property Insurance Pool

The North Carolina Insurance Underwriting Association created the Coastal Property Insurance Pool (CPIP), designed to provide coverage for the 18 identified Beach and Coastal communities.

Commercial products offered in the CPIP include:

  • Dwelling Fire (Beach Territories Only)
  • Commercial Fire (Beach Territories Only)
  • Dwelling Windstorm and Hail (Beach & Coastal Territories)
  • Commercial Windstorm and Hail (Beach and Coastal Territories)

Stand-alone policies can be paired with primary insurance policies that exclude wind losses and have limits match as closely as possible with a standard, admitted carrier in North Carolina.

Wind-Driven Rain Coverage

Wind Driven Rain is a sudden and temporary entry of rain/water pushed into a building by rain. That means water enters the building through openings that were created by the wind and is sometimes not covered on policies. An endorsement can be added to some policies to help provide coverage for this specific type of loss. Read your policy carefully to ensure it is included.

Excess Rain Coverage

If coverage required exceeds maximum building limit, excess limits MUST be purchased. Note effective 11/02/2023 the NCIUA maximum limit increased from $3,000,000 to $4,000,000 for each freestanding structure or building within multiple firewall divisions and from a $6,000,000 to $10,000,000 aggregate on structures with multiple firewalls divisions. Deductibles for Named Storm and Windstorm and Hail are 1%, 2%, and 5%.

If excess wind coverage is required, stand-alone markets can provide additional coverage over the maximum limits of NCJUA. When the value of the property exceeds the maximum coverage limits offered by the Association, the Association will not issue coverage without confirmation that the Insured has purchased excess coverage to the full value of the property insured. Coverages for Excess Wind can be obtained by Excess and Surplus carriers to meet the coverage limits required by NCJUA. The limits offered by the excess carrier will only be utilized should a loss occur greater than the limits of the primary wind policy through NCJUA.

Safeguarding Your Success

Sentinel’s team of experts is ready to provide you with personalized insights and comprehensive assessments tailored to your unique needs. Our advanced technologies and dedicated support ensure you stay protected against any wind-related risks. To discover more about your wind exposure and ensure coverage adequacy, contact us today.

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About The Author

The Atlantic Storm Season begins on June 1 and runs through November 30th. Experts state the 2024 storm season has the highest number of storms predicted ever, with 23 Named Storms, 11 Hurricanes over a likely 45-day shelf life with 5 becoming Major Hurricanes, and a 62% chance of the entire continental coastline having landfall. Visit our Storm Center for preparation and recovery resources.