Seven Key Things You Need to Know About Your Home Insurance Policy Before Disaster Strikes

Not knowing these crucial facts can leave you underinsured and facing unexpected out-of-pocket costs

Reviewing your homeowners policy may feel overwhelming, but with insurers increasingly shifting more risk onto policyholders, a careful read now can save you major headaches later. Here are seven must-know facts before you ever file a claim.

1. Floods, Earthquakes & Landslides Are Almost Always Excluded

Standard policies typically cover fire, wind and theft, but not flooding, earthquakes or landslides. If you’re in a coastal, river-floodplain or seismic zone (common in parts of North Carolina’s mountains and Piedmont), you’ll need separate coverage:

• Flood insurance: Available through the National Flood Insurance Program or private carriers
• Earthquake insurance: Offered as an endorsement or standalone policy
• Landslide/mudflow coverage: Rare, ask your agent if it can be added

2. Watch for Multiple Deductibles

Many policies impose a flat dollar deductible (e.g. $1,000) for most claims, and a separate percentage-based deductible for named storms or hurricanes (often 2–5% of your dwelling limit). That means a $300,000 home could carry a $15,000 deductible if hurricane winds damage your roof. Know which applies to which peril.

3. Anti-Concurrent-Causation (ACC) Clauses Can Deny Mixed-Cause Damage

An ACC clause lets insurers deny a claim if damage results from both a covered cause (wind) and an excluded cause (flood) at the same time. For example, if a storm surge floods your first floor and high winds tear off siding, an ACC clause may void coverage for all damage. Ask your carrier if your policy contains ACC language and consider flood or windstorm endorsements.

4. “Demand Surge” Can Leave You Underfunded

After widespread loss, think hurricanes, tornadoes or wildfires—labor and material costs spike. Even if your policy promises “replacement cost,” it may cap payouts at your policy limit. If rebuilding costs jump 20% after a major event, you could face a six-figure gap. To protect yourself:

• Buy guaranteed replacement-cost coverage (rider or endorsement)
• Periodically update your dwelling limit to reflect rising construction costs
• Consider parametric or supplemental rebuild coverage

5. Mold, Code Upgrades & High-Value Items May Require Riders

Standard policies often exclude or limit:

• Mold & long-term water damage: Available via mold add-on
• Building code upgrades: “Ordinance or law” coverage reimburses you for code-mandated repairs, like elevating a flood-prone home
• Jewelry, art & collectibles: Schedule separately to insure for full appraised value

6. Liability & Living Expense Coverage Varies Widely

Liability limits (for guest injuries) and additional living expense (ALE) benefits (if you’re displaced) can differ greatly between insurers. Make sure you have at least $300,000 in liability and that your ALE coverage will cover hotel, meals and storage for as long as rebuilding takes. In North Carolina, ALE may be capped, confirm limits in your policy.

7. Shop & Review Annually

Insurance companies raise rates on long-time customers who don’t shop. Every 12–24 months:

• Compare premiums, deductibles and coverages across at least three insurers
• Ask about discounts for bundling home, auto and umbrella policies
• Review every endorsement and exclusion, ask your agent to explain anything unclear

By knowing these seven key details, exclusions, deductibles, ACC clauses, demand surge, riders, liability/ALE limits and the need to shop—you’ll be ready to file a claim with confidence and avoid unpleasant surprises.