Dozens of North Carolina residents are losing their houses to rising tides. What are the options for homeowners when nature fights back?

Though gradual erosion is nothing new for the area, the destruction has been happening at a vastly accelerated pace in recent months. In February, four houses were lost over the course of just two days. Last autumn was even worse, with five houses succumbing to the waves in less than one hour.

In total, 31 homes on the 50-mile-long island (1) have been forcefully demolished by mother nature since 2020, and many others, preemptively relocated away from the water (2). But the question of how long those homes will be safe remains in the face of what feels like an eventual inevitability (3).

Aside from doing their best to prepare for the worst, what recourse do families have in the face of such natural disasters that cause them to lose everything?

Insurance companies can be finicky about natural disaster protection

The standard American home insurance policy usually covers (4) damage incurred from fire, tornadoes, winter storms, lightning strikes and more. And, while hurricane wind damage generally falls under the umbrella of disaster coverage, flood and earthquake damage are two big ones that are most often omitted (5), despite flooding being a part of 90% of all natural disasters in the US (6).

Owners and renters can secure separate flood insurance policies from the U.S. Federal Emergency Management Agency (FEMA)'s National Flood Insurance Program (7), which is administered in partnership with private insurance companies.

These policies cover the structure itself, the personal property inside it, or both. The one caveat is that only residents of designated NFIP communities are eligible for protection. Thankfully, there are a whopping 22,600 U.S. towns, cities and counties that participate in the program.

In especially high risk zones, flood insurance is mandatory for homes and businesses mortgaged by government-back lenders. Even if you aren't located in one of these areas, your lender may mandate that you purchase a flood policy anyways. Per FEMA's stats (8), 25% of all successful NFIP claims are from outside of the mapped floodplain.

If your community isn't a designated NFIP participant, you can still access standalone flood coverage from a private insurer. Another alternative is difference and conditions insurance, which is another type of policy designed to augment homeowners' insurance with coverage for hazardous events.

For areas as vulnerable as Hatteras Island (which is, at most, only 3.5 miles wide), residents will likely not be eligible for the latter. And for the former, they would be subject to high premiums.

"Difference in conditions policies typically provide coverage for catastrophic risks like earthquakes, landslides and mudslides, which would include structure losses due to high tides. However, DIC coverage may not be available in coastal places considered as extreme risk," Mark Friedlander, the senior director of media relations at the Insurance Information Institute, told Moneywise.

He added that there is no property insurance that would pay for costs associated with moving a home inland, as some North Carolina residents have had to do.

How much does flood insurance cost, and what does it cover?

Like all policies, what you pay for flood insurance varies greatly based on a number of factors.

According to the NFIP quote generator (9), for a 1980-built single-family home of about 2,200 square feet in the Hatteras Island zipcode, $250,000 of building coverage and $100,000 of contents coverage would come with deductibles ranging from the low $1,000s to $10,000.