North Carolina Homeowners Insurance Premiums to Increase Gradually
Following a settlement between the state Insurance Department and industry representatives, homeowners insurance premiums in North Carolina will increase incrementally by an average of 15% by mid-2026.
The agreement, announced by Commissioner Mike Causey, differs significantly from the initial 42.2% increase proposed by the North Carolina Rate Bureau in January 2024.
After rejecting the bureau's request, Causey initiated a formal hearing that spanned multiple weeks. The Insurance Department presented evidence advocating for lower or less significant increases, while the bureau cited high inflation and catastrophic storms to justify its request.
Under the settlement, average base rates will increase by 7.5% on June 1, 2025, and by an additional 7.5% on June 1, 2026. The increases will vary by location, with areas affected by Hurricanes Matthew and Florence experiencing higher premiums. In contrast, areas impacted by Hurricane Helene will face lower-than-average increases.
"These rate increases will ensure insurance companies have adequate funds to pay claims while considering the impact of increasing reinsurance costs," stated Causey.
The settlement also prohibits the Rate Bureau from requesting further increases before June 1, 2027. However, Bureau Chief Operating Officer Jarred Chappell expressed concerns that the negotiated increase might not sufficiently address claims costs driven by severe storms and other factors.
North Carolina's insurance law allows insurers to charge high-risk homeowners up to 250% of the Rate Bureau's rate through consent-to-rate policies. This provision has helped prevent a mass exodus of insurers from the state, with approximately 40% of homeowners' policies issued under consent-to-rate arrangements in 2022.