RALEIGH, N.C. — Homeowners in North Carolina can expect an average increase of approximately 15% in their insurance premiums by mid-2026, as part of a recently announced settlement between the state Insurance Department and insurance companies. This agreement was revealed on Friday by Insurance Commissioner Mike Causey, who has just commenced his third term in office.
Previously, the North Carolina Rate Bureau, which serves as a representative for insurers, had requested a much larger average increase of 42.2%. Causey had rejected this request last year, leading to a formal hearing that initiated in October. This hearing included several weeks during which testimony, evidence, and arguments were presented. The Insurance Department argued that rates should be either reduced or increased by less than 3% in light of the evidence presented.
Had no settlement been reached, a hearing officer, with Causey’s consultation, would have determined the new rates, an outcome that could have been appealed in court by the Rate Bureau. In his announcement, Causey emphasized that the proposed rate increases were necessary to ensure that insurance companies are financially equipped to handle claims resulting from natural disasters and rising reinsurance costs associated with national catastrophes.
The Rate Bureau attributed its significant increase request to a combination of factors, including soaring inflation—particularly affecting the cost of building materials—along with devastating storms and a lack of adequate premium rates to cover claims. The requested increases varied considerably across different regions, ranging from just over 4% in mountainous areas to more than 99% in coastal regions.
Under the terms of the settlement, the approved rate increases will be implemented in two phases and tailored according to specific locations. Statewide, there will be an average increase of 7.5% effective June 1, followed by another similar increase on June 1, 2026. Areas in eastern North Carolina, which were severely impacted by Hurricane Matthew in 2016 and Hurricane Florence in 2018, are expected to see the steepest increases. For instance, coastal regions spanning Carteret to Brunswick counties will witness an average jump of 16% in 2025, followed by an additional increase of 15.9% in 2026.
Conversely, regions that experienced significant flooding from Hurricane Helene in the fall will have lower-than-average increases. In counties like Buncombe, Watauga, and Yancey, residents can anticipate base rate hikes of 4.4% in 2025 and 4.5% in mid-2026. Major urban areas such as Raleigh and Durham will see increases of 7.5% over the next two years, while Charlotte residents will face a slightly higher rise of 9.3% in 2025 and 9.2% in 2026.
The agreement also prevents the Rate Bureau from pursuing another rate increase until June 1, 2027. The Chief Operating Officer of the Rate Bureau, Jarred Chappell, characterized the settlement as “a step in the right direction,” but expressed that the Bureau had originally sought a higher increase based on recent claims data.
Chappell noted that the frequency of stronger and more damaging storms, growing populations in disaster-prone areas, significant inflation within the construction sector, and soaring reinsurance costs have all contributed to the rising expenses faced by insurers.
North Carolina’s insurance regulations include a “consent-to-rate” provision that allows insurers to offer coverage to high-risk homeowners at premiums that can reach up to 250% of the Rate Bureau’s established rates. Although some insurers have exited high-risk regions in the state, this provision has helped to prevent a significant withdrawal of home insurers from North Carolina. According to reports, approximately 40% of the state’s homeowners’ policies were classified under consent-to-rate agreements in 2022.
