North Carolina Hurricane Insurance: Fact File

AUGUST 2016

  • North Carolina was one of over a dozen states impacted by Hurricane Sandy in October 2012. Sandy caused $18.75 billion in U.S. property losses, excluding flood insurance claims covered by the federal flood insurance program, according to estimates from ISO’s PCS unit. This would make Sandy the third most costly U.S. hurricane, after hurricanes Katrina and Andrew.
  • Sandy resulted in $57 million in private insurance claims in North Carolina. At $9.6 billion and $6.3 billion, respectively, New York and New Jersey suffered the largest private insurance losses by far from Sandy.
  • Five of the top 10 most costly hurricanes to hit the United States did damage in North Carolina: Hurricane Hugo in 1989, Hurricanes Charley, Ivan and Frances in 2004; and Hurricane Sandy in 2012. (See chart below.)
  • North Carolina was also battered by Hurricane Floyd, which caused $1.4 billion in insured losses in the state in 1999 (about $1.9 billion in 2011 dollars). These loss statistics do not include flood damage covered under the federal government’s National Flood Insurance Program.
  • There were 130,007 flood insurance policies in North Carolina in 2015. Standard homeowners policies typically do not cover flood damage. Flood insurance is covered by the National Flood Insurance Program.
  • The insured value of properties in coastal areas of North Carolina totaled $163.5 billion in 2013, accounting for 9 percent of the state’s total insured property exposure, according to an analysis by AIR Worldwide.
  • Of the 11 most hurricane-prone counties in the U.S., five are in Louisiana, three are in Florida and two are in North Carolina, according to a study by the U.S. Census (see chart).
  • The number of people living in coastal areas in North Carolina increased by 468,000 people or 105.9 percent, from 1960 to 2008, according to the U.S. Census Bureau.
  • North Carolina has two residual market plans that act as a market of last resort for residential and commercial property insurance in the state. The North Carolina Joint Underwriters Association (NCJUA) was created in 1969 to make basic and broad property insurance available to those unable to buy coverage through the standard insurance market. The plan, known as a FAIR Plan, covers the entire state except those barrier islands adjacent to the Atlantic Ocean. The North Carolina Insurance Underwriting Association (the state’s Beach Plan), also created in 1969, provides windstorm and hail coverage as well as homeowners policies for properties located in the state’s beach and coastal area.
  • As of fiscal year 2015, North Carolina’s beach and windstorm plan reported a total of 255,131 policies up from 94,612 policies reported at the end of 2004. Total exposure to loss under the plan increased to $88.6 billion in fiscal year 2015 from $31.6 billion in 2004 – an increase of almost 200 percent.
  • The North Carolina JUA/IUA plans have accessed the capital markets four times (2009-2011 and 2013) to provide them with additional reinsurance protection in the event of a hurricane. The NCIUA/NCJUA’s risk financing program provides approximately $3.8 billion in protection for the benefit of North Carolinians.

 

Top 10 Writers Of Commercial Insurance In North Carolina By Direct Premiums Written, 2015 (1)

 

Rank Group/company Direct premiums written ($000) Market share
1 Travelers Companies Inc. $411,397 6.3%
2 American International Group (AIG) 317,548 4.9
3 Zurich Insurance Group (3) 297,603 4.6
4 Nationwide Mutual Group 292,112 4.5
5 Chubb Ltd. (2) 291,359 4.5
6 Liberty Mutual 287,594 4.4
7 Hartford Financial Services 208,339 3.2
8 W. R. Berkley Corp. 189,921 2.9
9 Cincinnati Financial Corp. 169,071 2.6
10 Auto-Owners Insurance Co. 166,829 2.6

(1) Before reinsurance transactions.
(2) Data for Farmers Insurance Group of Companies and Zurich Financial Group (which owns Farmers' management company) are reported separately by S&P Global Market Intelligence.
(3) Chubb Ltd. data reflects the 2015 merger with Ace Ltd.

Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.

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Top 10 Writers Of Homeowners Insurance In North Carolina By Direct Premiums Written, 2015 (1)

 

Rank Group/company Direct premiums written ($000) Market share
1 State Farm Mutual Automobile Insurance $453,676 19.1%
2 NC Farm Bureau Mutual Insurance Co. 297,316 12.5
3 Nationwide Mutual Group 288,873 12.2
4 USAA Insurance Group 174,970 7.4
5 Allstate Corp. 173,921 7.3
6 Erie Insurance Group 135,129 5.7
7 Liberty Mutual 91,948 3.9
8 Auto-Owners Insurance Co. 66,173 2.8
9 Travelers Companies Inc. 61,827 2.6
10 Farmers Insurance Group of Companies (2) 53,385 2.2

(1) Before reinsurance transactions.
(2) Data for Farmers Insurance Group of Companies and Zurich Financial Group (which owns Farmers' management company) are reported separately by S&P Global Market Intelligence.

Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.

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Top 10 Writers Of Private Passenger Auto Insurance In North Carolina By Direct Premiums Written, 2015 (1)

Rank Group/company Direct premiums written ($000) Market share
1 Nationwide Mutual Group $819,201 15.9%
2 State Farm Mutual Automobile Insurance 758,819 14.7
3 Berkshire Hathaway Inc. 485,922 9.4
4 NC Farm Bureau Mutual Insurance Co. 478,891 9.3
5 Allstate Corp. 476,543 9.2
6 USAA Insurance Group 383,217 7.4
7 Integon National Group 380,031 7.4
8 Progressive Corp. 248,828 4.8
9 Erie Insurance Group 183,987 3.6
10 Liberty Mutual 169,098 3.3

(1) Before reinsurance transactions.

Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.

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Top 10 Costliest Hurricanes In The United States (1)

($ millions)

        Estimated insured loss (2)
Rank Date Location Hurricane Dollars when
occurred
In 2016
dollars (3)
1 Aug. 25-30, 2005 AL, FL, GA, LA, MS, TN Hurricane Katrina $41,100 $49,793
2 Aug. 24-26, 1992 FL, LA Hurricane Andrew 15,500 24,478
3 Oct. 28-31, 2012 CT, DC, DE, MA, MD, ME,
NC,NH, NJ, NY, OH, PA,
RI, VA, VT, WV
Hurricane Sandy 18,750 19,860
4 Sep. 12-14, 2008 AR, IL, IN, KY, LA, MO, OH, PA, TX Hurricane Ike 12,500 14,036
5 Oct. 24, 2005 FL Hurricane Wilma 10,300 12,479
6 Aug. 13-14, 2004 FL, NC, SC Hurricane Charley 7,475 9,348
7 Sep. 15-21, 2004 AL, DE, FL, GA, LA, MD, MS, NC, NJ, NY, OH, PA, TN, VA, WV Hurricane Ivan 7,110 8,891
8 Sep. 17-22, 1989 GA, NC, PR, SC, UV, VA Hurricane Hugo 4,195 7,260
9 Sep. 20-26, 2005 AL, AR, FL, LA, MS, TN, TX Hurricane Rita 5,627 6,817
10 Sep. 3-9, 2004 FL, GA, NC, NY, SC Hurricane Frances 4,595 5,746

(1) Includes hurricanes occurring through 2016.
(2) Property coverage only. Excludes flood damage covered by the federally administered National Flood Insurance Program.
(3) Adjusted for inflation through 2016 by ISO using the GDP implicit price deflator.

Source: Property Claim Services (PCS®), a Verisk Analytics® business.

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Estimated Value Of Insured Coastal Properties Vulnerable To Hurricanes By State, 2012 (1)

($ billions)

Rank State Commercial Residential Total
coastal
Total
exposure (2)
Coastal as a
percent of total
1 New York $2,105.6 $817.5 $2,923.1 $4,724.2 62%
2 Florida 1,359.9 1,502.4 2862.3 3640.1 79
3 Texas 653.8 521.5 1,175.3 4,580.7 26
4 Massachusetts 456.0 393.6 849.6 1,561.4 54
5 New Jersey 374.6 339.3 713.9 2,129.9 34
6 Connecticut 271.7 296.1 567.8 879.1 65
7 Louisiana 153.5 140.0 293.5 823.0 36
8 South Carolina 129.9 109.4 239.3 843.6 28
9 Virginia 95.2 87.1 182.3 1,761.7 10
10 Maine 73.3 91.3 164.6 285.5 58
11 North Carolina 65.8 97.7 163.5 1,795.1 9
12 Alabama 61.6 56.6 118.2 917.8 13
13 Georgia 57.4 49.3 106.7 1,932.2 6
14 Delaware 31.8 50.1 81.9 208.9 39
15 New Hampshire 28.5 35.5 64.0 278.7 23
16 Mississippi 29.6 31.0 60.6 468.5 13
17 Rhode Island 22.6 35.7 58.3 207.5 28
18 Maryland 8.7 8.6 17.3 1,293.4 1
  Total, states shown $5,979.5 $4,662.7 $10,642.2 $28,331.4 38%
  Total, United States 5,979.5 4,662.7 $10,642.2 $64,624.3 16%

(1) Includes residential and commercial Gulf and East Coast properties, as of December 31, 2012. Ranked by value of total insured coastal property.
(2) Total exposure is an estimate of the actual total value of all property in the state that is insured or can be insured, including the full replacement value of structures and their contents, additional living expenses and the time value of business interruption coverage.

Source: AIR Worldwide.

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Top Coastal Counties Most Frequently Hit By Hurricanes: 1960-2008

County  State Coastline region   Number of hurricanes Percent change
in population,
1960-2008
Monroe County Florida Gulf of Mexico 15 50.8%
Lafourche Parish Louisiana Gulf of Mexico 14 67.2
Carteret County North Carolina Atlantic 14 104.3
Dare County North Carolina Atlantic 13 465.9
Hyde County North Carolina Atlantic 13 10.1
Jefferson Parish Louisiana Gulf of Mexico 12 108.9
Palm Beach County Florida Atlantic 12 454.7
Miami-Dade County Florida Atlantic 11 156.5
St. Bernard Parish Louisiana Gulf of Mexico 11 17.2
Cameron Parish Louisiana Gulf of Mexico 11 4.8
Terrebonne Parish Louisiana Gulf of Mexico  11 78.7

Source: U.S. Department of Commerce, Census Bureau, Decennial Census of Population and Housing: 1960 to 2000; Population Estimates Program: 2008.

 

Other Resources

FEMA Regional Flood Fact Sheet: http://www.floodsmart.gov/floodsmart/pdfs/Region_4_Hurricane_fact_sheet_FINAL_for_web.pdf

I.I.I. Facts & Stats: Flood Insurance

I.I.I. Facts & Stats: Hurricanes

I.I.I. Issues Updates: Catastrophes

I.I.I. Issues Updates: Hurricane and Windstorm Deductibles