North Carolina Homeowners’ Insurance Premiums May See a 15% Increase

The base rate for North Carolina homeowners insurance will be headed up by an average of 15% by the middle of 2026. The rate increases are part of a settlement that was reached with the insurance industry by the North Carolina Insurance Department.

The state Insurance Commissioner Mike Causey recently announced the rate increase agreement which is dramatically less than the 42.2% increase that was requested by the North Carolina Rate Bureau. The Rate Bureau represents the insurance industry when it comes to rate negotiations.

Causey, who is now in this third term, rejected the Rate Bureau’s request last year which led to the settlement. A hearing in October which lasted weeks and included numerous witnesses and evidence ended in the settlement at a 15% increase. The North Carolina Insurance Department claimed that rates should be raised or lowered by less than 3%

In a recent news release, Causey said that the approved rate increase of 15% “are sufficient to make sure that insurance companies, who have paid out large sums due to natural disasters and face increasing reinsurance costs due to national catastrophes, have adequate funds on hand to pay claims.”

The Rate Bureau claimed that the reason it needed such a large increase (average of 42.2%) was due to inflation, in particular, the cost of building materials which combined with massive storms and “severely inadequate” premium rates. The Rate Bureau had requested increases that ranged from 4% in more inland locations to rate bumps of 99% in beach areas. 

The increases will be carried out in two parts that will vary by location. The first increase of 7.5% will go into effect on June 1, 2025, while the second will hit a year later on June 1, 2026.

The largest increases will happen in eastern North Carolina which were devastated by Hurricane Matthew in 2016 and Hurricane Florence in 2018. Carteret to Brunswick counties will see rate increases of 16% by mid-2025 and homeowner insurance rates will head up an additional 15.9% in June of 2026.

Rates in areas in Watauga and Yancey counties will only see an increase of 4.4% in 2025 and 4.5% in mid-2026. In more populous counties, rate increases will be in the single digits with Raleigh and Durham seeing increases that average 7.5% in each of the next two years. Charlotte rates will increase by 9.3% in 2025 and an additional 9.2 % in 2026.

The Rate Bureau is barred from asking for another rate increase until before June 1, 2027, according to Causeys press release.

The Rate Bureau is claiming that while the settlement is “a step in the right direction,” insurers asked for a larger increase “because that’s what recent claims data called for.”

“Storms have gotten stronger and more damaging, more people are living in disaster-prone areas, inflation in the construction industry has been particularly high and reinsurance costs have exploded. All these cost drivers remain an issue,” Bureau Chief Operating Officer Jarred Chappell said in a written statement.