RALEIGH, N.C. — Homeowners in North Carolina can expect an average rise of approximately 15% in their insurance premiums by mid-2026, as outlined in a settlement between the state’s Insurance Department and the insurance sector.
This announcement was made on Friday by Commissioner Mike Causey, who noted that it significantly differs from the North Carolina Rate Bureau’s initial plea for a 42.2% increase starting January 2024.
Throughout this past year, Causey, who has recently begun his third term, firmly rejected this substantial request from the Rate Bureau, which serves the interests of various insurance companies.
This rejection led to a formal hearing initiated in October, during which evidence and testimony were presented over several weeks. According to the Insurance Department, its testimony argued that the necessary rate adjustments should be less than a 3% increase, rather than the drastic hikes proposed by the bureau.
Without this settlement, it would have been up to a hearing officer, in consultation with Causey, to render a decision regarding the new rates, a decision that the Rate Bureau could have contested in court.
In a press release, Causey expressed that the agreed-upon rate increases would ensure that insurance companies, which have incurred significant payouts due to natural disasters and rising reinsurance costs from national events, maintain sufficient funds to meet claim demands.
The Rate Bureau’s request for high increases was fueled by high inflation rates, particularly for building materials, disastrous storms, and what they termed “inadequate” premium rates to cover claims effectively. The increases they requested varied dramatically, ranging from just over 4% in mountainous regions to more than 99% in certain coastal locales.
The settlement envisions rate increases to be implemented in two phases, with adjustments differing by region. Statewide, base rates will rise an average of 7.5% on June 1, followed by a further 7.5% increase on June 1, 2026.
Regions, particularly in eastern North Carolina, hit hardest by Hurricane Matthew in 2016 and Hurricane Florence in 2018, will see some of the largest hikes. For instance, beach areas stretching from Carteret to Brunswick counties can expect to incur a 16% increase in mid-2025 and an additional 15.9% by mid-2026.
Conversely, areas that suffered from excessive flooding related to Hurricane Helene will see below-average increases. For example, residents in Buncombe, Watauga, and Yancey counties will experience an increase of only 4.4% in 2025 and 4.5% by mid-2026.
In some of the state’s most populated cities, homeowners in Raleigh and Durham will face a consistent rise of 7.5% annually over the next two years. In Charlotte, increases will be slightly higher, with rates projected to climb by 9.3% in 2025 and by 9.2% in 2026.
Additionally, the settlement contains provisions preventing the Rate Bureau from attempting to raise rates again until June 1, 2027.
Jarred Chappell, the Bureau’s Chief Operating Officer, remarked that while the settlement marks progress, the bureau originally sought a more significant increase aligned with recent claims data.
Chappell highlighted that escalating storm strength, increased settlement in disaster-prone zones, high inflation in construction, and soaring reinsurance costs continue to complicate the insurance landscape.
North Carolina’s insurance regulations include a “consent-to-rate” provision, allowing insurers to cover high-risk homeowners who agree to bear premiums up to 250% of the bureau’s established rates.
While some insurers have exited disaster-prone regions of the state, this policy has contributed significantly to retaining home insurance providers in North Carolina. As of last year, around 40% of homeowners’ policies were classified as consent-to-rate arrangements.
