Thank you to Nicholas G. Hill, Brian B. Sperry, Morgan Bridgman, and James T. Graessle of King & Spalding’s Insurance Coverage and Recovery Team for updating the below content with North Carolina information.

Back to the Disaster Assistance Manual

9.1 – Overview

When a disaster occurs, most major insurance companies establish disaster hotlines for their policyholders. The lists of insurance company hotlines are generally posted on the websites of the various state departments of insurance. Also, major insurers often set up mobile disaster units close to affected areas. The contact information for the insurance departments is as follows:

North Carolina Department of Insurance (www.ncdoi.gov/)
1-855-408-1212

National Association of Insurance Commissioners (www.naic.org)
1-816-783-8300

If anyone claims that they are working on behalf of the government, the North Carolina Department of Insurance, or your insurance company, and asks for money to help expedite your claim, be careful. Demand to see official photo identification and immediately report this to your insurance company or the North Carolina Department of Insurance for verification.

You may be approached by a “public adjuster” who will offer to assist you in handling or expediting your insurance claims in return for a percentage of your insurance benefit payments. Only attorneys can represent third parties in claims against insurance companies and only attorneys are allowed to collect a percentage of your payments. Be sure this contract with your attorney is in writing and you understand exactly what expenses, if any, you are agreeing to pay over and above the contingency fee.

Most insurance companies will only reimburse for the reasonable cost of repair. If prices quoted for repairs appear inflated, get another estimate and obtain your insurance company’s agreement before undertaking repairs. Remember that your claim will only be approved to the extent that it does not exceed your policy limit. If you undertake repairs at an inflated price, you may reach your maximum policy limit very quickly.

Remember that the following information and answers to FAQs do not substitute for the four corners of the insurance policy. It is important that you read your insurance policy very carefully.

9.2 – Flood Insurance

Homeowners’ policies generally do not include flood insurance, so the federal government, through FEMA, oversees the National Flood Insurance Program (NFIP). Because of this, you will first need to check with your provider to see if your insurance policy is separate, or provided through NFIP. Most flood insurance policies, including those under NFIP, require you to give prompt written notice. Contact your insurance company or insurance agent to find out how to file your notice of claim. Typically, you will file a claim for damages under your flood insurance policy by submitting a signed Proof of Loss to your insurance company. The Proof of Loss must be in the hands of the insurance company within 60 days after the loss occurs, unless your policy clearly says otherwise. However, in cases of severe catastrophe, FEMA may authorize Proof of Loss extensions for everyone in your area. If you do not agree with the amount in the Proof of Loss prepared by the adjustor for your company, you must hire your own adjustor and submit your Proof of Loss by the deadline.

You will need to submit a list of lost or damaged contents. To the extent possible, include on the list the quantity of each item, a description, brand name, cost, model and serial number, and your estimate of the loss amount. An insurance adjuster will prepare an estimate of damages and provide you with a copy. You and the insurance company can then agree on the amount of the damages to be paid. If you do not agree, then you can appeal the insurance company’s decision. Please refer to your policy for more information on claims payment and the appeals process.

Answers to Questions about the National Flood Insurance Program
http://www.fema.gov/media-library-data/20130726-1438-204901905/f084_atq_11aug11.pdf

The Complete Current Manual
https://www.fema.gov/flood-insurance-manual

More detailed NFIP information at United Policyholders – a non profit
http://www.uphelp.org

9.3 – Frequently Asked Questions – Homeowners

Q 9.1 – My car was flooded. How does the insurance company determine if my car should be totaled?

It is likely that your car will be considered totaled if it has been partially or completely submerged in water and the body, engine, and/or transmission is damaged. However, whether your car will be totaled is determined on a case-by-case basis. North Carolina insurance companies consider a car to be totaled when the costs to repair it exceed the Actual Cash Value (ACV) by a Total Loss Threshold (TLT) of 75% or more. This means that the “total loss ratio” (cost of repairs divided by the ACV) must be at least .75, or 75%.

For example: Let’s say your car’s ACV is $10,000, and the estimated cost of repair is $7,000.
$7,000 ÷ $10,000 = .7 = 70%

In the above scenario, your car would not meet the 75% TLT under North Carolina law and would not be declared “totaled.”

If your car is “totaled,” in North Carolina it is also considered a “salvaged” car, and requires a special license issued by the state.

Q 9.2 – My car was totaled due to flood damage and I have full coverage on it. The company is going to pay the Blue Book value but I still owe substantially more than that. Doesn’t the company have to pay what I owe on the auto?

No. The company is only obligated to pay the current market value of your vehicle. You can request that the adjuster explain to you how the value was derived to ensure that all of the vehicle’s equipment, features, upgrades and recent work was considered in determining the value. To cover the difference between the market value of your vehicle and what you actually owe, you would need an endorsement or separate policy, to provide Guaranteed Auto Protection (GAP) coverage.

Q 9.3 – What will happen to the vehicle’s title if my car is totaled?

Once you have a totaled or “salvaged” car, you will file a total loss claim with your insurer. At this point you have two options. You can

1) Transfer ownership of your salvaged car to your insurer after you have paid off preexisting loans and then signing over your title; or
2) Retain ownership of your vehicle and apply for a salvage title. Once you obtain title, you can then (a) sell the car to a junkyard or recycler; or (b) repair the car and apply for a rebuilt N.C. title.

Regardless of which option you choose, under state law you and/or your insurers must notify the N.C. Division of Motor Vehicles when your car is deemed a total loss.

For specific instructions on how to complete the steps above, or for more information on your options after totaling your car, visit a website outlining North Carolina’s DMV services at https://www.dmv.org/nc-north-carolina/salvaged-vehicles.php. You can also contact North Carolina Department of Transportation customer service line if you have specific questions at (919)-715-7000.

Q 9.4 – The insurance company requested that I tow my flooded vehicle to a specific location for inspection. Am I responsible for the towing charges?

No. The insurance company should pay the towing expense by reimbursing you or paying the tow truck operator once the vehicle is delivered at the inspection site. You should not be responsible for the expense since you are assisting the insurance company in a prompt inspection of your vehicle, as well as protecting it from further damage. On the other hand, if you refuse to allow the insurance company to move the car, you will then be responsible for storage costs or the cost of having the car towed to your home.

Q 9.5 –  The insurance company agreed to repair my vehicle. Can the company require the use of used parts?

It depends on your policy. If your policy requires your insurer to use Original Equipment Manufacturer (OEM) parts, then they cannot require you to consent to used parts.

If your policy does not mandate the use of OEM parts, your auto insurance company can only require you to accept a used or aftermarket part if it is at least equivalent to the original part in terms of fit, quality, performance, or warranty. The company is required to provide you with a disclosure on the repair estimate that specifies which aftermarket parts will be used and the estimated costs for any modifications that may be required in order to use the parts.

Also note that the insurance company can recommend certain repair shops, but you have the right to select the repair shop of your choosing.

Q 9.6 – Since my car was flooded, I had to rent a vehicle. Does my auto policy cover the cost of renting a car?

Your policy will provide coverage for renting another vehicle only if you have an endorsement on your policy for rental reimbursement coverage. Under this coverage, the insurance company will pay up to the limit shown on the endorsement for the reasonable amount of time it takes to repair or replace your vehicle.

Q 9.7 – Is my vehicle covered for flood damage?

Only if you carry “other than collision” coverage, also called comprehensive coverage, on your policy. This information can be found on your policy’s declarations page. If you do not have a copy of your policy, you may wish to check with your agent or insurance company. If you do have comprehensive coverage, it still does not pay for things that are not permanently installed in your car, like removable radios or GPS systems. Comprehensive coverage usually only covers flooding as a result of natural disasters, and does not cover flooding as a result of neglect, like leaving your sun roof open while it is raining.

Q 9.8 – What if I do not agree with the settlement offered by the insurance company, particularly the market value amount for my totaled vehicle?

Insurance companies are allowed to choose from several claims valuation methods to make a valuation assessment. If you disagree with the valuation your insurance company provided, ask the adjuster to explain how the settlement amount was derived, or ask for a valuation report. You may also provide examples of vehicles for sale in your area that are in the same pre-loss condition to support the market value. You should also check the Kelley Blue Book value of your vehicle. If you still disagree with your insurer, you have the right to refuse the valuation and begin a dispute process by hiring an appraiser or an attorney. You should carefully look at the specific language in your policy. In many policies, there is a specific provision for for appraisal which lists the responsibilities of both parties.

Q 9.9 – My car was washed away in the flood. How do I find out where it is now?

Contact the Unclaimed Autos department of the area police department. Also, your vehicle may have been towed to a storage facility without your consent. If the vehicle was towed without your consent, and the storage facility wants to charge you a fee, you might contact the North Carolina Department of Transportation at (919) 715-7000 or fill out a contact form at https://apps.ncdot.gov/ContactUS/Home/PostComment?Unit=DMVGeneral.

Q 9.10 – I’ve received a check from the insurance company, but am not satisfied with the amount. I plan to file a complaint to request additional funds be paid. Should I cash the check? If I cash the check, does it mean that I accept their decision and amount of payment?

Be careful about endorsing a check before discussing your concerns with the company. Call the adjuster or company first before cashing the check. In addition, read both sides of the check carefully, as well as any accompanying documents. Some companies have a release from further liability disclaimer printed on the back of the check. Be sure to review any document before signing it – including a check.

Q 9.11 – How does replacement cost coverage work?

Replacement cost coverage replaces or repairs your damaged property with new material and/or items of like kind and quality.

Q 9.12 – Is replacement cost coverage available on all policy types?

Replacement cost coverage is not available under a typical auto policy. Some insurers provide new car replacement for a limited number of years if the auto is insured when new. You should check with your agent or company to see if they offer replacement cost coverage on all policy types.

Q 9.13 – If an insured vehicle is financed, how are claim checks issued? If issued to both the insured and lien holder, how does the insured collect?

The lien holder endorsement requires the insurer to pay to the insured and the lien holder as their interest may appear. The insured and the lien holder may both be named on the check. In most cases, insurance claim payments for damage to property that is security for a loan will be made payable to you and the lien holder, and the checks would require endorsements from both parties. The insured and the lien holder will agree on the release of funds.

Q 9.14 – What is the insured’s recourse if the check made payable jointly to the lien holder and insured is sent directly to the lien holder and cashed without the insured’s knowledge or endorsement on the check?

Your first step would be to contact the insurer and your lien holder. You can also visit the North Carolina Department of Insurance-Auto Policy website at https://www.ncdoi.gov/consumers/auto-and-vehicle-insurance or contact their Services for Consumers line at (855) 408-1212.

Q 9.15 – What determines if a flooded vehicle should be totaled?

North Carolina insurance companies consider a flooded car to be totaled when the costs to repair it exceed the Actual Cash Value (ACV) by a Total Loss Threshold (TLT) of 75% or more. This means that the “total loss ratio” (cost of repairs divided by the ACV) must be at least .75, or 75%.

As a general rule, the higher the water rises in your vehicle the more likely it is to be totaled. Refer to Q. 142, above.

Q 9.16 – Does the insured have to agree to have their vehicle totaled if they will be “upside down” on their loan?

The policy contract states how the loss will be paid, and it is the insurance company that decides whether or not to total a car. If the insurer deems the car totaled, the insurer will pay you the actual cash value of the vehicle. Alternatively, you and the insurance company may negotiate the settlement in which you may retain the salvaged vehicle; however, you would be responsible for the cost of repairs at that point and must notify the North Carolina DMV to obtain a salvaged vehicle title. At that point, you are subject to the salvage laws of North Carolina. You can visit https://www.dmv.org/nc-north-carolina/salvaged-vehicles.php for more information.

Q 9.17 – Describe how the title on an insured vehicle is processed if the vehicle is determined to be a total loss from flood damage or from collision damage.

For information about how titles are processed, please contact the North Carolina DMV at (919) 715-7000 or visit their website at https://www.ncdot.gov/dmv/contact/Pages/default.aspx.

9.4 FAQs – Mobile Homeowners

Q 9.18 – Are there different types of policies that provide coverage for mobile homes?

Yes. In North Carolina, mobile homes are referred to as “manufactured homes,” and there are two primary types of policies available for coverage. One is MH(C) coverage, and another is MH(F). The policies are similar, but may provide different levels of coverage.

Also, your policy can either be a “named peril” policy (one that covers only the perils specifically named on the policy) or a “comprehensive” policy (one that covers all perils unless they are specifically excluded under the policy).

Q 9.19 – Wind caused my tree to fall on my mobile home and damaged my roof. Does my mobile home owner’s policy cover the damages to my home and would the company pay to remove the tree from my property?

Both MH(F) and MH(C) policies should cover windstorm or hail damage, unless you have a “named peril” policy and this peril isn’t listed, or if you have a “comprehensive” policy and this peril is specifically excluded.

If your manufactured home insurance policy provides coverage for windstorm damage, it will likely pay for the damage to your roof. The tree itself will not be covered. Some policies provide a limited amount of debris removal coverage. Some companies may provide an option to increase coverage. You should contact your agent or company regarding debris removal coverage.

Q 9.20 – Does my mobile home owner’s policy provide Additional Living Expense?

Under an MH(F) policy, your company will cover any necessary increase in your living expenses, up to a limit on your policy declarations page, in the event a covered loss makes it so that you can no longer live in your home. Alternatively, under an MH(C) policy, you will get $10 per day up to a maximum of 60 days of “reasonable living expenses”.

It is important to read your policy carefully and contact your agent to determine what kinds of additional living expenses your particular policy covers.

Q 9.21 – My mobile home was flooded. Will my mobile home owner’s policy pay for my damage?

This depends on your policy. Under a “named peril” policy, you will only be covered from flood damage if it is expressly named in the policy. If your policy is “comprehensive,” flood damage will be covered unless it is expressly excluded in your policy.

You can visit the website for the North Carolina Department of Insurance for questions about your home insurance coverage at https://www.ncdoi.gov/consumers/homeowners-insurance or call them at (855) 408-1212.

For a helpful PDF explaining the differences in certain manufactured-homes insurance, visit http://www.ncdoi.com/_Publications/Consumer%20guide%20to%20manufactured-homeowners%20insurance_CHO1.pdf.

Q 9.22 – Can I make repairs to my property immediately?

Generally, you should make temporary repairs, if necessary, to protect your property from further damage. Do NOT make permanent repairs until an adjuster has inspected the damage. Your policy covers the cost of necessary temporary repairs, so save your receipts for materials and labor. You should also take pictures of the damage before making temporary repairs, if possible.

Q 9.23 – Does a homeowner’s insurance policy provide additional living expense (“ALE”) coverage?

If you can’t remain in your home because of loss from “a covered peril,” most flood insurance policies will not pay for you to stay elsewhere, but your homeowner’s or renter’s insurance may pay for you to stay in a hotel, motel, or other temporary shelter. However, payments are limited based on policy provisions, which generally range from 10 to 30 percent of your dwelling coverage limit. If the damage does force you to move, be sure to tell your insurer where you are and how to reach you by phone. Also, leave a note at your damaged residence telling the insurance adjuster how to find you. Finally, ALE may cover the cost of eating at restaurants if you do not have anywhere to store food in your temporary shelter. Be sure to discuss with your insurer exactly how much of your ALE funds you may use for dining.

Q 9.24 – My home was not flooded by rising water; however, the sewer line backed up and caused damage in my home. Is this covered under my homeowner’s policy?

It depends on your policy. Most standard-form North Carolina homeowner’s policies exclude coverage for water or sewage from outside the residence premises plumbing system that enters through sewers or drains. Contact your insurance company or agent regarding adding this coverage or seeing if you already have it. Additionally, the North Carolina Building Code requires homes to have a backwater valve if the plumbing fixtures are below the top of the first, upstream manhole on the street. Not having a properly functioning backwater valve could give your insurance company reason to deny your claim even if you have water back-up coverage.

Q 9.25 – My house was flooded and I placed my furniture and household items in the front yard to dry out, but they were stolen. Will my homeowner’s policy cover this loss?

It depends on your policy. Even though there is an exclusion for flood losses, many policies contain an exception to that exclusion, such as “We do cover an ensuing loss by theft or attempted theft or any act of stealing.” Contact your insurance company or agent regarding such potential coverage.

Q 9.26 – My policy states that “if a claim results from a weather-related catastrophe or a major natural disaster, each claim-handling deadline is extended for an additional 15 days.” Does this mean that I have coverage under my policy for damage caused by the flood?

This language does not alter or amend what is covered by the policy. It merely extends the claim processing and reporting time requirements of the North Carolina Insurance Code. Please review the coverage provided and exclusions in your policy to determine whether you have coverage for the given disaster. For more details, look at the North Carolina Insurance Code.

N.C. Gen. Stat. Ann. § 58-3-100 at:
https://www.ncleg.net/EnactedLegislation/Statutes/PDF/ByArticle/Chapter_58/Article_3.pdf

N.C. Gen. Stat. § 58-63-15 at:
https://www.ncleg.net/enactedlegislation/statutes/html/bysection/chapter_58/gs_58-63-15.html

Q 9.27 – Under a homeowner’s policy, who determines the cause of damage and who pays for an expert if one is needed?

The insurance company usually determines the cause of damage as its adjusters investigate and evaluate the loss. If an expert is required to determine the cause of the loss, the cost is usually borne by the insurance company, but in some cases may be paid by the insured. You should only pay if you hired the expert in support of the claim.

Q 9.28 – My house got water in it from the flood. I had damage to the roof and the roof is sagging and rain water came in through the roof. I don’t have flood insurance, but I do have homeowner’s insurance. What, if anything, may be covered under my homeowner’s policy?

If a covered peril, such as wind, lightning, or the rain itself, caused damage to the roof and created an opening, then water damage to your home and personal property resulting from rain water coming through that opening may be covered under a standard homeowner’s policy. If, however, there was pre-existing damage that could have been fixed beforehand to prevent the damage, it is unlikely anything will be covered.

Q 9.29 – I’ve received a check from the insurance company, but am not satisfied with the amount. I plan to file a complaint to request additional funds be paid. Should I cash the check? If I cash the check, does it mean that I accept their decision and amount of payment?

Be careful about endorsing a check before discussing it with the company. Call the adjuster or company first before cashing the check. If possible, get the adjuster or company to agree in writing that cashing the check will not preclude you from requesting additional funds be paid before you endorse the check. In addition, read both sides of the check carefully, as well as any accompanying documents. Some companies have a release from further liability disclaimer printed on the back of the check. This will typically be considered a binding contract and prevent you from seeking further compensation. The check may be a partial payment to initiate repairs. Additional funds may be released when you submit proof that repairs have been completed.

Q 9.30 – How does replacement cost coverage work on policy types such as flood, homeowner’s, dwelling, and mobile home?

Replacement cost coverage replaces or repairs your damaged dwelling or personal property with new material, items of like kind and quality, or both. In most cases, you should only be responsible for paying the deductible. Some homeowner’s and dwelling policies automatically include replacement cost coverage for the dwelling, others may be endorsed for an additional premium, and some may only provide actual cash value. Companies may also offer replacement cost coverage for mobile home policies. You should check with your agent or company to see if your company offers replacement cost coverage on your policy.

Q 9.31 – I’ve received a check from my company for damages to my home. It is going to cost more to repair than the amount received. Did they pay me enough for damages?

If you have replacement cost coverage, your claim may be paid in two stages. Your first claim check may be for the actual cash value (ACV) of the damaged property, or it might be half the replacement cost. ACV is determined by taking the replacement cost for the covered loss and deducting for depreciation. Once the damaged property is repaired or replaced, you are entitled to receive the depreciation that was previously withheld in your first check, up to the replacement cost of the damaged property, and not to exceed the actual amount spent or the total amount of insurance on the dwelling. Generally, to receive the difference between ACV and replacement cost, the policy contract requires that the repair or replacement be completed within a specific period of time, usually 180 to 365 days from the date of loss. Policies may also provide an option for the insured to extend that time frame if requested in writing as outlined in the actual policy. It is important to check your policy, contact your agent, or do both regarding the specific requirements of your policy.

If you are not underinsured, in most cases you should only be responsible for paying your deductible. If you believe your company is not offering an amount sufficient to repair or replace your damaged property, minus your deductible, you may want to request appraisal in accordance with the provisions in your policy. Have your insurance company explain the basis for its payment and clarify if additional funds are forthcoming.

Q 9.32 – What’s the difference between the different types of homeowner policies? How does a dwelling policy differ from a homeowner’s policy?

Homeowner’s policies may either provide “named peril” or “all risk” coverage—sometimes called “comprehensive” or “open peril” coverage. Named peril means the damage must be caused by a peril that is specifically named or listed in the policy. All risk is used to describe policies that typically cover all perils unless specifically excluded in the policy. The homeowner’s policy provides coverage for the dwelling, personal property, other structures, loss of use (also called additional living expense – ALE), medical payments, and personal liability. A dwelling policy provides coverage for the dwelling, personal property, or both. Dwelling insurance is often used for seasonal homes, rental property, homes under construction, or other situations where a homeowner cannot obtain a “standard” homeowner’s policy.

Q 9.33 – Do checks from insurance companies have to be endorsed by both the insured and the mortgage company? Does the same procedure apply to mobile homes?

Insurance claims payments for damage to property that is security for a loan must be made payable to the policyholder and the mortgage company, so they would require endorsements from both parties. The policyholder will probably need to work with the mortgage company during the repair. The funds will often be placed in an escrow account and only disbursed when the mortgage company is satisfied with the repairs.

Q 9.34 – What recourse does the insured have if the check was issued directly to the mortgage company? How long can a mortgage company hold money before releasing any to the insured? Can the mortgage company disperse the money in small increments? Can they withhold disbursements?

North Carolina, unfortunately, does not have statutory guidance on this issue. There are, however, steps you can take to facilitate timely release of insurance funds under these “mortgage clauses.” First, stay current on your mortgage. This makes a lender more likely to trust you will use the funds to repair its property interest.

Second, immediately notify your lender of the damage. Third, request repair quotes from several sources immediately after the damage occurs and share these quotes with your lender. While these should help calm your lender’s worries, it still may be reluctant to release the funds.

If you have a concern about a private mortgage lender, you should contact the Federal Trade Commission (FTC) at 1-877-382-4357 or online at https://www.ftc.gov.

Additionally, you may want to contact the North Carolina Department of Justice, Consumer Protection Division at 1-877-566-7226 or 1-919-716-6000, or online at http://www.ncdoj.gov/Consumer.aspx.
If the lender is a state-chartered bank, contact the North Carolina Commissioner of Banks at 1-919-733-3016. If the lender is a federally chartered lender, contact the Office of the Comptroller of the Currency (OCC) Customer Assistance Group at 1-800-613-6743. In some instances, the Office of Housing and Urban Development (HUD) may be able to help, and should be called at 1-800-225-5342.

Q 9.35 – Are plumbing problems/backed up toilets covered by any types of insurance, even after a flood?

Some homeowner’s policies provide coverage for accidental discharge, leakage or overflow from within a plumbing system and if rising flood waters cause toilets to overflow, the loss may be covered. Contact your insurance company or agent regarding coverage.

Q 9.36 – There is a power outage in my area and we have no utilities in our home. Will my policy pay for a hotel until power is restored?

Probably not. The policy will normally only provide loss of use coverage if your home is physically damaged by a peril covered in your policy and, as a result of the covered damage the residence premises are unfit to live in. Lack or power (or water), however, is not considered physical damage. Your policy may, however, cover spoilage of food during extended outages. You must check the specific language in your insurance policy, contact your insurance company or agent, or both.

Q 9.37 – I bought my house several years ago and last year my mortgage was bought by another mortgage company. My original company provided flood insurance, but now I find that the new mortgage company did not provide it. What can I do?

If the community in which the property is located participates in the NFIP, mortgage companies are required by statute to ensure that a property in a high-risk flood zone has flood insurance. A mortgage company must provide notice to the borrower of the requirement of flood insurance. If the borrower fails to purchase flood insurance, then a mortgage company may purchase flood insurance for the property. For information regarding the statute, contact the Federal Emergency Management Association (“FEMA”) representative at a Disaster Recovery Center (“DRC”) or the National Flood Insurance Program (“NFIP”). Remember that it is important as a homeowner to ensure that all necessary insurance coverage is in place.

– If you have a concern about a private mortgage lender, you should contact the Federal Trade Commission (FTC) at 1-877-382-4357. You may also visit its website at www.ftc.gov.
– If the lender is a state-chartered bank, contact the North Carolina Commissioner of Banks at 1-919-733-3016.
– If the lender is a Federal Chartered Lender, contact the Office of Thrift Supervision at 1-972-277-9500.
– In some instances, the U.S. Department of Housing and Urban Development (HUD) can help. Call HUD at 1-800-225-5342.

Q 9.38 – Wind caused my tree to fall on my house, which caused damage to my roof. Does my homeowner’s policy cover the damage to my house and pay for the removal of the tree from my property?

If your policy provides coverage for wind, the roof damage caused by the tree should be covered if it falls on a “covered structure”—e.g., your house, fence, or garage. Most policies will pay to remove a tree if a covered peril caused it to fall on and damage covered property. The two most common policies—HO-3 and HO-7—pay different amounts for removal. HO-3 provides up to $1,000 total and up to $500 per tree. HO-7 provides up to $2,000 total and up to $1,000 pre tree. Contact your insurance company or agent regarding coverage.

Q 9.39 – My neighbor’s tree fell down on my house and damaged my roof. Will my neighbor’s homeowner’s policy pay for the damage to my home and remove the tree?

Probably not. Your neighbor is not legally liable for an act of nature. In order for your neighbor’s insurance to pay, they would have to know that the tree was likely to fall (e.g. if the tree was rotten). If your neighbor is not at fault or their policy does not pay for your damage, you can make a claim under your policy if the peril that caused the tree to fall is a covered peril in your policy. If your insurer successfully collects from your neighbor’s insurance company, you may be reimbursed for your deductible. You should contact your agent and/or insurance company regarding the damage.

Q 9.40 – Some trees blew down in my yard during a storm. Will my homeowner’s insurance policy pay for the loss to and removal of the trees?

Probably not. Removal of the trees is not covered if they did not fall on or damage an insured structure, or if they are not blocking your driveway or a fixture designed to assist a handicapped person to enter or leave the house.

Q 9.41 – A windstorm blew my fence down. Will my homeowners insurance cover loss of my fence?

Any damage caused by wind is normally covered under a standard homeowner’s policy. If your policy provides coverage for wind, you may have coverage for the fence. Some policies do not provide any coverage for fences damaged by wind. You should check your policy and/or contact your agent or insurance company regarding coverage.

Q 9.42 – During the storm, a tree fell on the roof of my home which allowed rain to enter from the opening made by the tree. I now see mold growing – do I have coverage?

Most homeowner’s policies will provide coverage for the property damaged by rain that entered through an opening caused as a direct result of a tree falling on your roof. Generally, mold is excluded in the homeowner’s policy; however, many policies will cover an ensuing mold loss caused by or resulting from sudden onset water damage. Coverage for mold loss would include the reasonable and necessary costs to repair or replace your damaged property. Many policies limit the additional cost for remediation or testing of ensuing mold unless your policy includes mold remediation coverage.

Q 9.43 – During the storm, my home was flooded. Does my homeowner’s policy cover mold damage from the flood water?

Typically, homeowner’s policies do not cover damage caused by or resulting from flood because flooding is usually an excluded peril under homeowner’s policies. If there is no flood coverage provided in the homeowner’s policy, any ensuing mold loss resulting from flood would not be covered under the policy.

Q 9.44 – Do I have to hire a public insurance adjuster to file and help in the settlement of my auto or homeowner’s insurance claim?

No. Hiring a public insurance adjuster to assist you in filing a property insurance claim is optional. Public insurance adjusters charge fees to help negotiate claim settlements with insurance companies. Be aware that the public insurance adjuster fee is normally a percentage of the claim settlement and therefore is paid out of settlement monies received from an insurer.

Q 9.45 – Are there any limitations on the compensation of a public insurance adjuster?

Yes, the following limitations apply:

– If the claim is due to a catastrophic incident, the maximum fee allowed under North Carolina law is 10 percent of the settlement amount.
– You have the right to rescind the contract after it has been signed. To do so, you must make the rescission in writing and mail or deliver it to the public adjuster at the address in the contract within three business days of signing of the contract.
– If your insurance company offers to pay the full amount of your policy limits within 72 hours after the date on which you reported your loss, then the public adjuster cannot receive a commission based on a percentage of the total settlement amount. Instead, he/she may charge a reasonable fee based on his/her time and expenses. He/she must also notify you that the amount paid by your insurance company might not be increased.

Q 9.46 – Is a public insurance adjuster permitted to be involved in the repair of damaged property for which the public adjuster negotiated settlement?

Yes, but the public insurance adjuster must disclose in writing any direct or indirect financial interest that the public adjuster has with any other party who is involved in any aspect of the claim.

Q 9.47 – Are public insurance adjusters required to be licensed by the North Carolina Department of Insurance?

Yes, a person may not act as a public insurance adjuster or hold himself or herself out to be a public insurance adjuster in North Carolina unless the person holds a license. You may verify the license status of a public insurance adjuster at https://sbs-nc.naic.org/Lion-Web/jsp/sbsreports/AgentLookup.jsp.

Q 9.48 – The food in my refrigerator spoiled because of loss of power in my area. Will my homeowner’s policy pay for the loss?

The standard homeowner policy does not cover food spoilage as a result of power failure off premises. Some comprehensive policies, however, have added a limited amount of coverage, i.e., $500, while other companies endorse the policy to cover food spoilage.

Q 9.49 – If I evacuate due to a storm, and my personal property is damaged or stolen while in another location, will my personal property be covered by my auto or homeowner’s policy?

Homeowner’s insurance frequently provides coverage for personal property, but the coverage is typically capped at 40-75% of the insured value of the building. Certain items, such as jewelry and artwork, may be excluded by your homeowner’s insurance and may require additional personal property insurance coverage. If your personal property is damaged or stolen while you and your property are in another location, your insurance may cover the loss, but it is frequently capped at a percentage of the insured home value (such as 10%). Generally, a personal automobile policy will not cover personal property.

9.6 FAQs – National Flood Insurance Program (“NFIP”)

Q 9.50 – What is the difference between a flood insurance policy issued by the NFIP and a policy issued by an insurance company? Does one provide better coverage than the other?

Flood insurance is provided by the federal government through the NFIP. The policies that are sold by insurance companies are usually NFIP policies sold through the Write Your Own (“WYO”) program. This is done to make it easier to purchase flood policies through local insurance agents. However, even though the policies are purchased through the insurance companies, they are NFIP policies. Claims are handled by NFIP adjusters and by insurance company adjusters that are certified by the NFIP to handle flood claims. Questions and complaints can be referred to the NFIP at 1-888-225-5356. Some insurance companies may also offer flood coverage other than the NFIP policy. You should check with your agent or company to see if such alternative flood coverage is available, and to compare the coverage(s) offered to determine the best coverage for your needs.

Q 9.51 – How can I obtain insurance coverage to protect my home and contents from damage caused by flooding?

The NFIP makes flood insurance available to people who live in communities that participate in the National Flood Insurance Program. Contact your agent or the NFIP at 1-888-225-5356 to purchase a NFIP policy. The home need not be near a body of water or in a floodplain to qualify.

Q 9.52 – Is flood insurance expensive?

In North Carolina, the average yearly flood insurance premium is $718, or $60 per month. Individual policies can vary greatly depending on the amount of coverage. Lower-risk homes or those located in an area that has not had historical flooding can often purchase flood insurance for around lesser amounts. For example, Residents of Wilson, North Carolina, paid the most per dollar of coverage: They had to spend about $391 per $100,000 of coverage; meanwhile, Cary residents only had to spend $176 to receive the same amount of coverage.

Q 9.53 – Why would I buy flood insurance if my property is in a low or moderate risk area?

More than twenty percent of all flood insurance claims come from outside high-risk flood areas, and they receive one-third of federal disaster assistance for flooding.

Q 9.54 – Can I buy flood insurance if I rent?

Yes, you can buy up to $100,000 of flood insurance for your contents.

Q 9.55 – How much flood insurance can I buy?

You can buy up to $250,000 for the dwelling and $100,000 for your contents.

Q 9.56 – Does the policy provide any coverage for additional living expense?

No, the NFIP policy does not provide coverage for additional living expense.

Q 9.57 – How is damaged residential property valued after a loss under an NFIP policy?

If the property is a single-family home, your principal residence at the time of loss (meaning you live there at least 80% of the year), and it is insured to at least 80 percent of its value, the dwelling will be valued at replacement cost, which is the cost to replace the part of the building that is damaged. If the dwelling is rebuilt at a new location, the replacement cost won’t exceed what it would have cost to replace at the former location.

Contents, appliances, carpets and carpet pads, and outdoor property are valued at actual cash value. Actual cash value is the cost to repair with new material of like kind and quality less depreciation.

Q 9.58 – Is there coverage for the cost of debris removal? What about loss avoidance measures?

The cost of removing debris on your property and/or the cost of removing debris from your property that is on someone else’s property is covered, but it’s subject to the limit of the policy. You will be compensated at the federal minimum wage if you or a member of your household performs the removal work.

Loss avoidance measures are limited to $1,000 for the cost of sandbags, temporary levees, pumps and plastic sheeting and lumber, including the value of your work. Loss avoidance measures are available if damage to insured property from flood is imminent, and the threat of flood damage is apparent enough to lead a person of common prudence to anticipate flood damage. An additional $1,000 is available for the cost of moving insured property to protect it from flood. These benefits do not increase the limit of insurance.

Q 9.59 – If my automobile was parked on my property and damaged by flood, does the flood policy cover the damage?

No, automobiles are not covered property under the NFIP policy. If you have comprehensive or full coverage under your auto policy, flood should be covered by that policy. If you have liability coverage only, there is no coverage for the car.

Q 9.60 – Does flood insurance cover damage to built-in appliances?

Generally, built-in appliances such as dishwashers are covered under NFIP policies. Check to see what flood insurance coverage you have. Then, call the NFIP at 1-888-225-5356 to determine what would be covered in a flood insurance policy.

Q 9.61 – What coverage is available for commercial buildings?

Up to $500,000 is available for non-residential buildings, and an additional $500,000 is available for contents of non-residential buildings. Buildings and contents are valued at actual cash value, which is the cost to replace an insured item of property at the time of loss, less the value of its physical depreciation.

Q 9.62 – When does coverage become effective under an NFIP policy?

There is typically a 30-day waiting period before coverage goes into effect after an NFIP policy is purchased. However, there are a few exceptions to the 30-day waiting period, such as if a building is located in a newly-designated Special Flood Hazard Area, if an additional amount of insurance is selected as an option on the renewal bill, when a new policy is initially purchased in connection with a loan, or if the property is affected by flooding on burned federal land that is a result of, or is exacerbated by, post-wildfire conditions.

Q 9.63 – What if my dwelling or commercial building is valued at more than the maximum limits available?

Some commercial flood insurance companies will offer excess flood insurance that provides coverage beyond the standard flood insurance policy. The excess insurers often require that you carry the maximum amount of primary insurance issued by the NFIP or a WYO carrier. Additionally, the limits of the primary flood insurance policy must be paid before the excess policy coverage will pay anything. You should contact your agent to learn more about potential excess flood insurance coverage.

Q 9.64 – Where can I get more information about flood insurance?

Check out https://www.floodsmart.gov/faqs, which is the frequently asked questions webpage for the NFIP.