North Carolina Homeowners to Face 15% Insurance Premium Hike by 2026
A Hard-Won Compromise
After months of intense negotiations, the North Carolina Insurance Department and the industry have reached a settlement that will increase base rates for homeowners’ insurance premiums by an average of 15% by mid-2026. This agreement marks a significant departure from the initial request by the North Carolina Rate Bureau, which sought a staggering 42.2% overall average increase.
A Balanced Approach
State Insurance Commissioner Mike Causey, who rejected the bureau’s initial request, has worked tirelessly to ensure that insurance companies have sufficient funds to pay claims while also protecting homeowners from exorbitant rate hikes. The agreed-upon increases, to be implemented in two phases, will vary based on location, with the highest increases affecting areas most vulnerable to natural disasters.
Regional Variations
The base rate will increase by 7.5% on June 1, followed by another 7.5% on June 1, 2026. Beach areas from Carteret to Brunswick counties will see an average 16% increase in mid-2025 and an additional 15.9% in mid-2026. In contrast, areas harmed by historic flooding from Hurricane Helene will face lower-than-average increases.
Urban Centers Affected
Among highly populated areas, base rates in Raleigh and Durham will increase on average by 7.5% in each of the next two years. Charlotte will see a 9.3% increase in 2025 and a 9.2% increase in 2026.
A Temporary Reprieve
The settlement also includes a provision that bars the Rate Bureau from seeking another rate increase before June 1, 2027. While the bureau’s Chief Operating Officer, Jarred Chappell, acknowledges that the settlement is “a step in the right direction,” he notes that the industry had requested a larger increase due to rising claims data.
The Bigger Picture
North Carolina’s insurance law contains a “consent-to-rate” exception, which allows insurers to offer high-risk homeowners policies at rates up to 250% of the bureau’s rate. This exception has helped prevent a mass exodus of home insurers from the state, with about 40% of homeowners’ policies set by consent-to-rate policies in 2022.
A Delicate Balance
As storms grow stronger and more damaging, and construction costs continue to rise, the state must strike a delicate balance between ensuring that insurance companies can pay claims and protecting homeowners from crippling premium increases. The settlement reached by Commissioner Causey and the industry marks a crucial step towards achieving this balance.
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