North Carolina Homeowners Insurance Premiums to Rise: What You Need to Know
Homeowners in North Carolina should brace themselves for an average increase of about 15% in insurance premiums by mid-2026. This change comes as part of a settlement between the North Carolina Insurance Department and the insurance industry, revealing a complex backdrop of negotiations and considerations.
Breakdown of the Rate Increases
On a surface level, the settlement between Commissioner Mike Causey and the North Carolina Rate Bureau (which represents the insurance companies) appears to be a compromise. The Rate Bureau had initially requested a staggering 42.2% increase due to rising claims from natural disasters and escalating reinsurance costs. However, this request was formally rejected last year, leading to a lengthy hearing filled with testimonies and financial data.
The settlement ultimately results in incremental increases rolled out in two stages: a 7.5% hike on June 1, 2025, followed by another 7.5% on June 1, 2026. Although this might appear more manageable at first glance, certain regions will bear a heavier burden. For instance, areas along the coast, particularly those severely damaged by hurricanes in recent years, will see premium increases that could exceed 30%.
Regional Variances in Rate Changes
The effects of this settlement will vary significantly across the state:
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Eastern North Carolina: Regions that faced devastation from Hurricane Matthew in 2016 and Hurricane Florence in 2018 will likely see the highest increases. For instance, coastal areas from Carteret to Brunswick counties are projected to experience increases of approximately 16% in mid-2025, followed by an additional 15.9% in mid-2026.
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Mountain Regions: Counties like Buncombe, Watauga, and Yancey, which have historically faced flooding, will see comparatively lower increases—4.4% in 2025 and 4.5% in mid-2026.
- Urban Zones: Major cities aren’t exempt from the trend. In Raleigh and Durham, homeowners will face average increases of 7.5% each year for the next two years, while Charlotte residents will face a 9.3% increase in 2025 and 9.2% in 2026.
Implications for Homeowners
The reasoning behind these increases stems from a combination of inflation in building materials, severe weather patterns, and a substantial uptick in claims payouts. Recent comments from Jarred Chappell, the Bureau’s Chief Operating Officer, highlight that storms are becoming more intense and the landscape of risk is shifting—more people are now residing in higher-risk areas.
Further compounding the issue, rising construction costs have made it essential for Insurance companies to adjust their premiums. This trend aligns with our analysis at Extreme Investor Network, emphasizing that adapting to the environment and emerging risks is vital for homeowners. Knowing where and when to invest is crucial to avoiding financial pitfalls.
The Consent-to-Rate Program: A Lifeline for Homeowners
It’s worth noting that North Carolina’s insurance framework includes a “consent-to-rate” provision, which allows insurers to cover high-risk properties at rates that can reach up to 250% of the standard bureau rate. This unique structure has been instrumental in limiting the exodus of insurance providers from disaster-prone areas, providing some relief for homeowners. As many as 40% of homeowner policies in North Carolina utilized these consent-to-rate agreements in 2022.
Conclusion: Preparing for the Future
As the insurance landscape continues to evolve, North Carolinians must stay informed and proactive. Strategies for mitigating insurance costs include considering risk assessments for properties, exploring different insurers, and understanding the implications of state regulations concerning high-risk areas. At Extreme Investor Network, we believe that being well-informed is the first step towards not just surviving but thriving in a changing financial landscape.
Stay tuned to our blog for more insights into the insurance industry and broader financial strategies to help you navigate these changes effectively.