If you’re a homeowner or plan to own a home someday, you already know home insurance is crucial to keeping your property safe and covered in case of disaster. If you have a mortgage, homeowners insurance is required by almost every home lender — and even if you own your home outright, not having homeowners insurance is simply inviting financial disaster.
But homeowners insurance can also be expensive, and with the economy being the way it is, you don’t want to pay too much for your homeowners’ insurance if you can help it. Every state has its own idiosyncrasies when it comes to state laws, potential loopholes, and factors that can influence your insurance premiums, and North Carolina is no different. The trick is to make use of those idiosyncrasies to get the best cheap home insurance in North Carolina.
Average Home Insurance Premiums and Coverage
To know whether or not you’re paying too much, you must first know how much you should be paying. The average yearly premium for homeowners insurance in North Carolina is $1,166, or $97 a month (numbers courtesy of The Zebra’s Ross Martin). Of course, this can vary not only according to things like driving record and zip code, but also insurance carriers — getting your homeowners insurance from Safeco, for example, will cost about $660 a month, while Nationwide will cost you more than $1,800.
As is the case with most states, homeowners insurance in North Carolina will cover losses due to theft, burglary, and many kinds of damage but does not cover flooding. Flood insurance will likely have to be purchased separately and is a good idea to have on hand, given the state’s propensity for hurricanes and heavy rainfall.
North Carolina’s Home Insurance Laws
One specific law regarding home insurance in North Carolina is that the state sets a maximum limit on the amount insurance companies can charge for home and car insurance. These limits are established by the North Carolina Rate Bureau and enforced by state law. But insurance companies have found a way to work around this limitation by what’s known as the “consent to rate” loophole.
This loophole — which takes the form of an agreement between the insurer and the policyholder — allows the insurance company to charge more than the mandated limit for insurance premiums. The “consent” part comes in when the insurer asks (or requires) the policyholder to sign a form allowing them to do so — one great reason to know what you’re signing before you put your signature down.
Why Do Insurance Companies Charge More?
So why would an insurer exceed the mandated limit for homeowners insurance premiums? The most obvious answer is “they want more money,” but that’s not the entire story. Some policyholders might be determined to be at a higher risk for whatever reason (for example, a poor driving record), and if they’ve signed the “consent to rate” agreement, the insurance company can charge them more to help address that risk.
What Can You Do?
If you think (or know) that your insurance company is overcharging you, there are some options. First, in order to make sure you’re paying too much, take a moment to review your policy and compare your premiums against the maximums set by the North Carolina Rate Bureau. If there are discrepancies, your next step might be to call your insurer and see what, if anything, they’re willing to do about it. If that doesn’t work, you can file a complaint at the North Carolina Department of Insurance, which is responsible for regulating insurance practices in North Carolina.
Finding Cheap Home Insurance in North Carolina
If you find you are being overcharged, you have options that go beyond filing a complaint. For one, you can go shopping around for cheap North Carolina homeowners insurance — there are free online tools that make this fast and easy. Once you compare quotes, you may find yourself paying a lot less for the same (or superior) coverage.
However, if you do decide to switch insurance companies, just make sure you don’t sign another “consent to rate” agreement when you do. Do your best to carefully review any documents before you sign, so you don’t get burned a second time.
If you decide switching insurance companies isn’t for you, there are still a few steps you could take to bring your premiums down:
- Take a defensive driving course, or purchase and install new safety equipment or anti-theft devices on your car. This will reduce your risk in the eyes of insurers and you could get a discount.
- Speaking of discounts — ask about them! Insurance companies offer discounts for all sorts of reasons, including low mileage, good student discounts, and discounts for certain professions.
- Increase your credit rating. Having a better credit rating will demonstrate financial responsibility and vigilance to your insurer, and may result in a lower rate.
