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Rick Drumm

Richard Drumm
Outer Banks Blue
Kitty Hawk, NC 27949

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Insurance and Flood Zones


If you are scratching your head at the price of a property - like you can not believe there is an oceanfront home for $350,000 - then your instincts are correct - there is something wrong with the property: Chances are there is no oceanfront "dune. If you're not on a stable stable beach it will affect your insurance expense, abilty to rebuild, and whether a not a bank will provide financing.  Where there are high erosion rates, you will find "too good to be true" properties.  If you can fish off the back deck then you know there could be trouble.  Flood zones, erosion, and insurance rates all will have an impact on property value. 

1. BEACH EROSION MAPS: Each Outer Banks area is different -  View all EROSION MAPS  - and determine if you are looking in the right place. Keep in mind - beach erosion is all over - sand comes and goes - just focus on areas that have the lowest rates if you desire an oceanfront home.

2. INSURANCE COSTS:  Flood zones are listed in the "details" section of each MLS listing. X flood zones do not require flood insurance when a you are getting a loan.  Flood insurance will be required on all financed property in all the other floodzones - AE Zones are generally inexpensive, when compared to VE & Cobra Flood Zones, which can be cost prohibitive. 

3. LOMA (4WD AREA):  A Letter of Map Amendment (LOMA) is an official amendment, by letter, to an effective NFIP map. A LOMA establishes a property''s location in relation to the Special Flood Hazard Area (SFHA). LOMAs are usually issued because a property has been inadvertently mapped as being in the floodplain, but is actually on natural high ground above the base flood elevation.  Unless a property is in an X Flood Zone, or has a LOMA, flood insurance can be cost prohibitive in the 4WD areas of the Outer Banks! 


To find out the flood zone of a property that you are interested in - CLICK HERE - this website ( is a little awkward - after you click the the link, you will see the map of NC and a group of icons across the top - click on the HOUSE icon (red roof) then you can Enter the property address number and the first word of the address (plus the zip code or city).  Then the map will be refreshed showing the property that you selected - there will be a strip of icons across the top of the map - click on the file folder icon (MAP LAYERS), then click on FLOOD HAZARDS - you will see the colors of the different flood zones listed - match the color of the zone with the background color of where the selected property is.  Better yet - call me and I will help you!

IMPORTANT - An insurance policy can not be written when a hurricane is inside this designated "box".  This can change your closing date.

What is the BEACH Plan in North Carolina?

Its statutory name is the North Carolina Insurance Underwriting Association, and it is an association which, as agents for the member companies, functions like an insurance company, making basic and broad property insurance available to people who are not able to buy it through the standard insurance markets.

The Beach Plan was created in 1969 to cover only those barrier islands adjacent to the Atlantic Ocean. 

In 1998, the Beach Plan was expanded by the NC General Assembly to include the eighteen (18) coastal counties (called the Coastal Area) for Windstorm and Hail Insurance Only coverage. The plan was authorized to begin offering Homeowners Insurance Policies for principle residences effective July 1, 2003 for all 18 coastal counties.


Here is a direct link to the NCIUA (North Carolina Insurance Underwriters Association) website - - explains everything.  I cut and pasted all the information from that link above and below to save you time - but either way - I am merely providing the insurance information to you from the source - I am not an insurance expert.

What Coverage is available under the Beach Plan?

For principal residences the Beach plan issues Homeowners Insurance Policies for eligible properties according to rules approved by the Commissioner of Insurance. The terms and conditions of those policies including the coverage forms are according to Underwriting Guidelines also approved by the Commissioner.  

Basic coverage is provided in the Dwelling Property 1 Basic Form (DP-0001) for one to four (1-4) family residences.  For Commercial Properties, Basic coverage is provided under the Standard Property Policy (CP-0099).  Those policies protect buildings against such hazards as fire (including damage by lightning), wind, hail, explosion, smoke, damage by vehicles or aircraft, vandalism and malicious mischief.

Broad coverage is available for residences under the Dwelling Property 2 Broad Form (DP-0002). For Commercial Properties, Broad Form is endorsed to the Standard Property Policy by the Optional Perils Form (PF-0002).

Dwelling Form Broad coverage's include additional hazards of damage by burglars; falling objects; weight of ice, snow or sleet; accidental discharge or overflow of water or steam; sudden and accidental tearing apart, cracking, burning or bulging of a steam or hot water system, an air conditioning or automatic fire protective system, or an appliance for heating water; freezing of plumbing, heating, air conditioning or automatic fire protective sprinkler system or of a household appliance; sudden and accidental damage from artificially generated electrical current; volcanic eruption.

The Commercial Optional Perils Form provides the additional perils of:
breakage of glass; falling objects; weight of snow, ice or sleet and water damage (meaning accidental discharge or leakage of water or steam as a result of the breaking or cracking of any part of a system or appliance containing water or steam, other than an automatic sprinkler system). There is also additional coverage for collapse.

It is important to note that these are general coverage descriptions and the provisions and language of any specific policy would provide the exact coverage including conditions and exclusions, pertaining to an individual insured property.

The Plan also provides a Windstorm and Hail Only policy written in conjunction with a fire insurance policy, that is written by a private, licensed insurance company.

Normal coverage is provided on Actual Cash Value basis, however Replacement Cost Coverage may be provided, when specifically requested, on eligible buildings that meet Replacement Cost guidelines.

Business Income coverage will be available for commercial risks. The maximum per risk limit available is $300,000.

Travel Trailers affixed to real property located in the each Area may qualify for coverage through the Beach Plan.

Limited classes of manufacturing risks will be eligible providing they meet occupancy and underwriting standards.

Up to $1,500,000 of protection is available on private dwellings and $3,000,000 on commercial properties (excluding automobile risks.) 

The Beach Plan also offers a crime policy that provides burglary and robbery protection.

The Plan does not write liability insurance, except for the coverage provided by homeowner policies for an owner occupied principal residence.

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