Article
Updated July 2026
No matter where you live in the United States, there’s a good chance you will have to deal with one or more natural disasters or severe weather events. Each part of the country experiences at least one peril or another. Some states have hurricanes or tropical storms, while in other states it’s tornadoes, snow, hail, floods, earthquakes, or some combination of events.
Many South Carolina residents recall surviving the 1,000-year flood of 2015 only to be dealt back-to-back “blows” by Hurricanes Debby and Helene in the fall of 2024. These events left mass destruction behind for our residents and Insurance CAT teams, FEMA, military and red cross were deployed to our state. The National Climate Assessment stated, “warming-charged extremes have become more frequent, intense, widespread or of long duration.”
How does homeowners’ insurance respond to natural disasters?
In 2024, the U.S. experienced 27 weather and climate disasters, each causing over $1 billion in losses (NOAA); homeowners insurance premiums rose approximately 24% nationally between 2020 and 2024
In the short term, insurance carriers pass these additional costs to their policyholders in the form of increased premiums. In the long term, we have seen carriers continue to de-risk their exposures by implementing higher deductibles and limiting coverage. In a 2025 interview with Rethinking65, Abacus advisor Stephen Maggard, CFP, stated
“We are seeing insurers tighten, restrict and reduce coverages across the board. Clients are asking us to look at their policies to see what they could afford to not insure” and areas where they can self-insure.
In that same interview, Alex Chastain, CFP, added that
“We recently had a client who was required to replace their 40-year roof at 20 years, or lose coverage. We are encouraging clients to have their insurance agents re-run their insurance score, and if the client’s credit has improved, it is helping soften the premium increase.”
While the insurance industry may be more short- term and sales-focused, the reinsurance industry, which insures the insurers, is thinking long-term and pays attention to computer modeling, trending, and forecasting. If the reinsurers raise their rates, insurance companies will have to either absorb the cost or pass it along to their customers. Insurers could redraw the risk maps, which could also affect your premium rates. If you live in an area affected by recent storms or fires, it may already be designated a high-risk zone, and you may already be paying more for your insurance. But in newly affected areas of the country, conditions are changing, and your property may be designated as high risk in the future because of recent increased extreme weather events; higher risk equates to higher premiums. Considering recent extreme weather events, we may see insurance carriers tighten underwriting, as well as the terms and conditions of the policy.
Does your zip code affect your homeowners’ insurance rate?
When it comes to weather-related events and your risk, where you live matters. In South Carolina, we are well acquainted with floods, hurricanes, thunderstorms, and tornadoes, all of which are relatively common occurrences. Damage to your home that follows a thunderstorm or tornado will probably be covered by a typical homeowners policy, while you’ll need to have separate policies to insure against other weather-related risks.
Does homeowners’ insurance cover hurricane damage in South Carolina?
Homeowners in the Southeastern states are at risk of being hit by a hurricane at any time between June to November. A basic homeowners’ policy will not cover flood-related damage, even if the flooding is caused by or happens during a hurricane. As a result, consider a separate flood policy or an endorsement to add flood as a covered peril to the homeowners policy. For example, if you insure your home dwelling for $200,000, and the policy has a 5-percent deductible, then you will have to pay for the first $10,000 of hurricane-based claim before your insurer will begin paying your claim.
It is not unusual for these kinds of deductibles to be divided into two separate categories, with one focusing on hurricane-specific damage and the other focusing on damage that’s tied to other storms or events that involve heavy winds.
Does homeowners’ insurance cover flood damage?
Floods are the most common of all the natural disasters in the United States. Homeowners insurance usually does not cover damage caused by flooding. If your home is in a high-risk area, and you obtained your mortgage from a federally regulated or insured lender, you will be required to buy flood insurance through the National Flood Insurance Program. If you live in a moderate- or low-risk area, you are not required to have Flood Insurance.
If you are interested in learning about Flood Insurance or want to find out if you are in a Flood Zone, visit www.floodsmart.gov to learn more. If you are interested in purchasing Flood Insurance speak to insurance agent about purchasing this coverage.
It is likely if you live in a Flood Zone that the insurance company will require an Elevation Certificate. Flood Policies have a 30- day waiting period which means you cannot go out and purchase a Flood Policy today and have it in place tomorrow. Flood Policies, unlike your all perils deductible on your Homeowners Policy, have separate deductibles few each dwelling there are two types of Flood Insurance; Primary Flood Insurance and Excess Flood Insurance. A Primary Flood Insurance Policy typically offers $250,000 of coverage for your dwelling (home) and $100,000 for your personal property (contents). Excess Flood policies can be purchased for additional protection.
Does homeowners’ insurance cover earthquakes in South Carolina?
South Carolina earthquakes occur with the greatest frequency along the coastline of the state with an average of 10-15 earthquakes a year below magnitude 3. The largest was the Charleston Earthquake of 1886 which measured at 7.3 magnitude.
Damage caused by an earthquake is not covered by your standard homeowners insurance policy. In fact, the more recent versions of a standard homeowner policy have very limited coverage for household water damage-leaks and pipes-and expressly exclude coverage from a flood event and any type of earth movement.
Earthquake insurance coverage is expensive, and premiums continue to rise. Earthquake Insurance policies typically have a percentage of the dwelling limit deductible. For example, if your home is insured for $250,000 dwelling limit and you have a 10% deductible, then your responsibility for any claim damages would be $25,000. The closer your home is to a fault line or sits on soil types with greater exposure to loss in an earthquake, the more limited insurance options you may find available because of the extreme risk of earthquake loss.
While it is still difficult to attribute individual weather events to climate change, experts predict such extreme weather to occur more often. In the United States, disasters hit highly populated areas which increases the cost of such events. Think supply and demand of resources. These weather events not only affect the property owner, but also directly affect the insurance industry.
Navigating homeowners insurance options is one piece of a broader financial protection strategy. If you have questions about how to protect your assets from natural disaster risk, our advisors can help. Contact Abacus Planning Group.
