Fact file: North Carolina hurricane insurance

September 2018

  • 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. 
  • 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.) North Carolina was also severely impacted by 2017 hurricanes Harvey and Irma.
  • North Carolina was also battered by Hurricane Floyd, which caused $1.4 billion in insured losses in the state in 1999 (about $2.1 billion in 2018 dollars). These loss statistics do not include flood damage covered under the federal government’s National Flood Insurance Program.
  • There were 133,946 flood insurance policies in North Carolina in 2017. 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 $178 billion in 2015, accounting for 8 percent of the state’s total insured property exposure, according to an analysis by AIR Worldwide.
  • Between 32,000 and 260,000 single-family homes are at risk of damage from storm surge in North Carolina, according to Core Logic.  In terms of reconstruction costs, storm surge damage would range from $7 billion to $54 billion.  The ranges reflect the intensity of hurricanes, with the lower range corresponding to a weak hurricane and the highest range reflecting damage from a rare Category 5 hurricane.
  • 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 508,000 people or 114.4 percent, from 1960 to 2010, 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 2017, North Carolina’s beach and windstorm plan reported a total of 240,809 policies up from 94,612 policies reported at the end of 2004. Total exposure to loss under the plan increased to $76.7 billion in fiscal year 2017 from $31.6 billion in 2004 – an increase of 143 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 $3.3 billion in protection for the benefit of North Carolinians.

Top 10 Writers Of Commercial Insurance In North Carolina By Direct Premiums Written, 2018 (1)

 

Rank Group/company Direct premiums written ($000) Market share
1 Travelers Companies Inc. $441,198 6.1%
2 Liberty Mutual 382,221 5.3
3 Chubb 297,679 4.1
4 Zurich 290,543 4.0
5 Nationwide Mutual Group 273,820 3.8
6 American International Group (AIG) 234,875 3.3
7 The Hartford 227,256 3.2
8 The Cincinnati Insurance Cos. 196,669 2.7
9 Erie Insurance 190,999 2.7
10 Auto-Owners Insurance 181,352 2.5

(1) Before reinsurance transactions.

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, 2018 (1)

 

Rank Group/company Direct premiums written ($000) Market share
1 State Farm $483,717 17.8%
2 North Carolina Farm Bureau Insurance 331,554 12.2
3 Nationwide 276,205 10.2
4 USAA 224,994 8.3
5 Allstate Corp. 179,764 6.6
6 Erie Insurance 151,950 5.6
7 Liberty Mutual 98,670 3.6
8 Travelers 84,189 3.1
9 Auto-Owners Insurance 81,885 3.0
10 Farmers Insurance Group of Companies 54,675 2.0

(1) Before reinsurance transactions.

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, 2018 (1)

 

Rank Group/company Direct premiums written ($000) Market share
1 State Farm  $946,301 14.9%
2 Berkshire Hathaway Inc.  780,564 12.3
3 Nationwide  689,089 10.8
4 National General Holdings Corp.  645,503 10.1
5 North Carolina Farm Bureau Insurance  612,305 9.6
6 Allstate Corp.  518,374 8.1
7 USAA  479,938 7.5
8 Progressive  402,262 6.3
9 Erie Insurance  249,828 3.9
10 Liberty Mutual  179,360 2.8

(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
Rank Date Location Hurricane Dollars when occurred In 2018 dollars (2)
1 Aug. 25-30, 2005 AL, FL, GA, LA, MS, TN Hurricane Katrina $41,100 $51,882
2 Sep. 19-22, 2017 PR, USVI Hurrican Maria (3) 25,000-30,000 25,600-30,700
3 Sep. 6-12, 2017 AL, FL, GA, NC, PR, SC, UV Hurricane Irma (3) 20,000-25,000 20,400-25,600
4 Aug. 25-Sep. 1, 2017 AL, LA, MS, NC, TN, TX Hurricane Harvey (3) 18,000-20,000 18,400-20,400
5 Oct. 28-31, 2012 CT, DC, DE, MA, MD, ME, NC, NH,
NJ, NY, OH, PA, RI, VA, VT, WV
Hurricane Sandy 18,750 20,688
6 Aug. 24-26, 1992 FL, LA Hurricane Andrew 15,500 25,404
7 Sep. 12-14, 2008 AR, IL, IN, KY, LA, MO, OH, PA, TX Hurricane Ike 12,500 14,631
8 Oct. 24, 2005 FL Hurricane Wilma 10,300 13,002
9 Aug. 13-14, 2004 FL, NC, SC Hurricane Charley 7,475 9,729
10 Sep. 15-21, 2004 AL, DE, FL, GA, LA, MD, MS, NC,
NJ, NY, OH, PA, TN, VA, WV
Hurricane Ivan 7,110 9,254

(1) Property losses only. Excludes flood damage covered by the federally administered National Flood Insurance Program. Ranked on dollars when occurred. As of August 8, 2019.
(2) Adjusted for inflation through 2018 by the Insurance Information Institute using the GDP implicit price deflator.
(3) Insurance Information Institute estimate based on data from catastrophe risk modelers, reinsurance companies, the Property Claims Services unit of Verisk Analytics, the Federal Emergency Management Agency of the U.S. Department of Homeland Security, and the Florida Office of Insurance Regulation. These estimates are preliminary because the organizations involved periodically resurvey the events, and the severity of losses and other factors create a high level of uncertainty surrounding the ultimate loss figures.

Source: Insurance Information Institute, catastrophe risk modelers, reinsurance companies, U.S. Department of Homeland Security, the Florida Office of Insurance Regulation,
the Property Claim Services® (PCS®) unit of ISO®, a Verisk Analytics® company, and the U.S. Bureau of Economic Analysis.

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Estimated Value Of Insured Coastal Properties Vulnerable To Hurricanes By State, 2015 (1)

($ billions)

Rank State Commercial Residential Total Coastal Total exposure (2) Coastal as a percent of total
1 New York  $2,093 $1,272 $3,365 $5,571 68%
2 Florida  1,483 1,718 3,200 4,058 79
3 Virginia  92 106 1,993 2,078 10
4 Texas  725 638 1,363 5,358 28
5 Massachusetts  441 511 953 1,765 54
6 New Jersey  373 422 795 2,453 32
7 Connecticut  290 385 675 1,025 64
8 Louisiana  182 147 329 896 38
9 South Carolina  112 126 239 931 26
10 Maine  73 111 184 321 53
11 North Carolina  69 109 178 2,014 8
12 Alabama  63 65 128 1,014 13
13 Georgia  53 56 109 2,171 5
14 Delaware  34 59 93 241 29
15 New Hampshire  32 42 74 328 23
16 Mississippi  36 35 71 527 14
17 Rhode Island  25 46 71 241 22
18 Maryland  8 10 18 1,476 1
  All states above  $6,184 $5,858 $13,838 $32,468 38%
  Total, United States $6,184 $5,858 $13,838 NA 16%

(1) Includes residential and commercial Gulf and East Coast properties, as of December 31, 2015. 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.

NA=Data not available.

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

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

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