Key Takeaways
- North Carolina uses standard ISO homeowners policy forms (HO-2, HO-3, HO-5, etc.)
- The NC Insurance Underwriting Association (NC Beach Plan/NCIUA) provides wind and hail coverage in coastal areas
- NC requires 15 days notice for cancellation (non-payment) and 45 days for other cancellations
- Hurricane deductibles are common and can be 1-5% of dwelling coverage
- North Carolina law prohibits unfair discrimination in property insurance underwriting
North Carolina Homeowners Insurance Requirements
North Carolina has specific property insurance regulations that producers must understand.
North Carolina Homeowners Policy Forms
North Carolina uses standard ISO policy forms:
Policy Forms
| Form | Coverage Type | Dwelling | Personal Property |
|---|---|---|---|
| HO-2 | Broad | Named perils | Named perils |
| HO-3 | Special | Open perils | Named perils |
| HO-5 | Comprehensive | Open perils | Open perils |
| HO-4 | Renters | N/A | Named perils |
| HO-6 | Condo | Named perils | Named perils |
| HO-8 | Modified | Named perils | Named perils |
Exam Tip: North Carolina uses ISO forms, unlike some states (like Texas) that have unique state forms.
North Carolina Residual Markets
North Carolina has residual market mechanisms for hard-to-place risks:
NC Insurance Underwriting Association (NCIUA) - Beach Plan
The NCIUA (commonly called the Beach Plan) provides wind and hail coverage for coastal properties:
| Feature | Details |
|---|---|
| Coverage | Wind and hail only |
| Territory | 18 coastal counties |
| Eligibility | Must be declined by voluntary market |
| Building Standards | Must meet building code requirements |
| Deductible | Percentage deductibles common |
Coastal Counties Covered
The Beach Plan covers properties in 18 coastal counties including:
- All of Carteret, Currituck, Dare counties
- Portions of other coastal counties
- Properties within defined coastal territory
How Beach Plan Works
- Property owner unable to obtain wind coverage in voluntary market
- Agent applies to NCIUA for wind/hail coverage
- Standard homeowners policy covers all OTHER perils
- Two policies work together for complete coverage
NC Joint Underwriting Association (NC JUA)
The NC JUA provides coverage for other high-risk property:
| Feature | Details |
|---|---|
| Coverage | Fire and extended coverage |
| Territory | Statewide |
| Eligibility | Declined by voluntary market |
| Last Resort | Market of last resort |
Cancellation and Non-Renewal Requirements
North Carolina has strict requirements for canceling or non-renewing property insurance:
Cancellation Notice Requirements
| Reason for Cancellation | Notice Required |
|---|---|
| Non-payment of premium | 15 days |
| Material misrepresentation | 15 days |
| Policy in effect < 60 days | 15 days |
| All other cancellations | 45 days |
Non-Renewal Notice Requirements
| Timeframe | Requirement |
|---|---|
| Standard Non-Renewal | 45 days before expiration |
| Reason Required | Must provide reason upon request |
| After Claim | Cannot non-renew solely due to one claim |
Hurricane Deductibles
North Carolina allows separate hurricane deductibles:
Deductible Options
| Type | Amount |
|---|---|
| Percentage Deductible | 1%, 2%, 3%, 5% of dwelling coverage |
| Dollar Deductible | Fixed amount (typically higher) |
| Application | Named hurricanes |
Disclosure Requirements
- Must clearly disclose hurricane deductible
- Separate from standard "all other perils" deductible
- Consumer must acknowledge in writing
- Deductible applies per hurricane event
Flood Insurance
- Standard property policies exclude flood damage
- National Flood Insurance Program (NFIP) available
- Private flood insurance options growing
- Agents must disclose flood exclusion
- Many coastal properties require flood coverage for mortgages
What does the NC Insurance Underwriting Association (Beach Plan) provide coverage for?
How many days notice must a North Carolina insurer provide for non-payment cancellation of a homeowners policy?
How many coastal counties does the NC Beach Plan (NCIUA) cover?