NC Residents Struggle with Insurance Issues After Hurricane Helene
Spruce Pine, NC — After Hurricane Helene caused extensive property damage across Western North Carolina, some homeowners are facing cancellations and denials from their insurance companies. The Category 4 hurricane caused over $250 billion in economic losses and property damage, prompting insurance companies to reassess their risk.
The Schiffhauers’ Story
Rene and Jerry Schiffhauer of Spruce Pine experienced serious damage to their home. The couple’s property was hit hard by the storm’s high winds and heavy rainfall. Their anemometer recorded winds of 100 mph on September 27, 2024, which tore limbs from their trees and damaged their home. Over two feet of rain then caused extensive flooding in their basement.
After submitting a claim, the Schiffhauers received a check for just over $3,600 for the wind and hail damage. However, they were shocked to receive a cancellation notice from State Farm, citing the amount of money paid out in claims over the last five years. The Schiffhauers also had previous storm damage in 2020 and a theft from eight years prior.
Is This Legal?
North Carolina Insurance Commisioner Mike Causey stated that policy cancellations under these circumstances are legal and occur fairly often. State law permits insurance companies to cancel or not renew a policy, provided they follow ten guidelines.
State Farm offered the Schiffhauers 37 days’ notice before cancelling their policy, which is within guidelines if it’s a cancellation. However, since the company’s letter stated they “cannot continue this coverage,” it’s questionable whether they were within the guidelines, as a non-renewal requires 45 days’ notice.
State Farm stated, “Many factors are considered when they underwrite a homeowner’s insurance policy from the property’s location to past claim activity”, in a statement to News 13. The company also stated that it complies with all applicable laws and regulations in North Carolina.
NC Cancellations and Non-Renewals
In 2024, Nationwide Insurance did not renew over 10,500 homeowners’ policies in Eastern North Carolina. Foremost Insurance Company also notified Commissioner Causey’s office that they planned to not renew mobile home policies in flood-prone areas of western North Carolina, starting in May. These policies typically cover flooding.
“They’re in business, they’re not a charity, they’re in business to make a profit and our job at the Department of Insurance is we’re regulators, so we have to hold the insurance companies accountable, make sure they’re paying their claims in a fair and timely manner,” said Causey.
Homeowners in North Carolina are not required to have homeowners’ insurance. However, lenders typically require it if there is a mortgage on the property.
The Schiffhauers were labeled as high risk after being denied by multiple insurance companies, putting their mortgage in jeopardy.
The North Carolina Fair Plan, a market of last resort, provided the Schiffhauers with coverage; however, it is not as extensive as their previous policy from State Farm, but it allowed them to meet their lender’s requirements.
Cautions for Consumers
Commissioner Causey cautions residents that even small claims can jeopardize coverage. Because of the severe weather, all homeowners with a policy in North Carolina will soon be paying more.
“Don’t file small claims,” Causey said. He also said that smaller claims, which may result in just a couple of hundred dollars from your insurance company after your deductible, add up and companies are tracking that, which puts you at a greater risk of receiving a cancelation or non-renewal notice. He recommends not filing a claim unless it’s for a large amount you can’t afford to pay.
A 7.5 percent base rate increase will go into effect on June 1, 2025, and another 7.5 percent the following June. These impacts, however, reflect the damages paid out due to Hurricane Florence in 2018.
Federal Action
In January 2025, Missouri Senator Josh Hawley sent a letter to insurance companies regarding claims denied after Hurricanes Helene and Milton. Hawley called on them to testify before the US Senate Homeland Security and Governmental Affairs Subcommittee on Disaster Management. Hawley referred to coverage denials as “outrageous.”
North Carolina General Statute for Cancellations
North Carolina law outlines the grounds for canceling an insurance policy:
- Nonpayment of premium
- Material misrepresentation or nondisclosure
- Increased hazard or material change in risk
- Breach of contractual duties
- Fraudulent act against the company
- Failure to institute reasonable loss control
- Loss of reinsurance
- Conviction of a crime
- Commissioner determination that the policy would violate state law
- Failure to meet the requirements of the insurer’s charter
Written notice of cancellation must be provided at least 15 days before the effective date.
