Why "High Ground" Buyers Should Still Consider Flood Insurance

If you are buying a home in Leland, Hampstead, or inland New Hanover County, you might hear a phrase that sounds like music to a buyer’s ears: "It’s in Flood Zone X. You don’t need flood insurance."

While it is true that your lender won’t require it, assuming you don’t need it is one of the most common mistakes we see in the Cape Fear region.

In South Eastern NC, water doesn't always behave according to the lines on a map. Here is why buyers on "high ground" need to look beyond the mandatory requirements.

1. The "Falling Water" vs. "Rising Water" Trap

A standard homeowners policy (HO3) has a very specific definition of water damage.

Falling Water: If wind rips off a shingle and rain pours through the ceiling, that is usually covered by your Wind/Hail policy.

Rising Water: If a creek overflows or a storm drain backs up and water enters your home from the ground level, that is Flood.

The Reality: Standard home insurance covers falling water. It almost never covers rising water. If a slow-moving storm dumps 20 inches of rain and it pools against your foundation and seeps in, you are on your own without a flood policy.

2. The Lesson of Hurricane Florence

Hurricane Florence (2018) was the wake-up call for the entire state. It wasn't a storm surge event for many; it was a rain event. Areas miles inland—places that had "never flooded before"—saw massive damage because the ground simply couldn't absorb 30 inches of rain in 48 hours.

Stat Check: Approximately 25–30% of all flood insurance claims come from properties in low-to-moderate risk zones (Zone X). Being outside the "flood zone" lowers your risk, but it doesn't eliminate it.

3. The End of the "Preferred Risk Policy"

In the past, Zone X buyers could get a flat-rate "Preferred Risk Policy" (PRP) for a few hundred dollars. Under FEMA's Risk Rating 2.0, the PRP is gone.

The New Normal: Rates are now individualized based on distance to water, elevation, and replacement cost.

Good News: For most Zone X homes, rates remain affordable (often $500–$800/year). Locking in a policy at closing may also provide "continuous coverage" or "newly mapped" discounts if the seller already carries one.

4. New for 2024/2025: The Disclosure Law Change

As of July 1, 2024, the North Carolina Real Estate Commission updated the Residential Property Disclosure Statement.

What Changed: Sellers are now required to answer specific questions about past flood claims, damages, and disaster assistance—making "No Representation" far less of a shield.

Buyer Action: Review this document closely. A "Yes" answer to flood history doesn't make the home a poor choice—it simply means we need to confirm proper remediation and determine whether the flood policy is transferable.

The Takeaway

In our market, flood insurance on "high ground" is best viewed as catastrophic loss protection. You might not need it for the typical summer thunderstorm, but for the price of a daily cup of coffee, it protects your equity from the next 100-year storm.

Don't rely on a map drawn five years ago to protect your future. At Aspyre Realty Group, we help you read between the lines of disclosure forms and insurance quotes, so you can enjoy your coastal home with total peace of mind.