RALEIGH. NC (AP) — Base rates for homeowners insurance premiums in North Carolina will rise an average of about 15% by mid-2026 as part of a settlement reached by the state Insurance Department and the industry.
The agreement Commissioner Mike Causey announced Friday is in stark contrast to the January 2024 request from the North Carolina Rate Bureau, which represents insurance companies, seeking an overall average increase of 42.2%.
Causey, an elected official who began his third term earlier this month, formally denied the agency’s request last year. That led to a formal hearing that began in October and included several weeks of witnesses, evidence and arguments. The state Insurance Department said witnesses would argue that rates should be reduced or increased by less than 3%.
Without the settlement, a hearing officer — in consultation with Causey — would have decided what the new rates should be. The Rate Bureau could have appealed this decision to the court.
Causey said in a news release that the proposed rate increases “are sufficient to ensure that insurance companies, which have paid out large amounts due to natural disasters and face increasing reinsurance costs due to national catastrophes, have sufficient resources to pay claims. “
The agency attributed its large request to high inflation – especially in building materials – combined with disastrous storms and “severely inadequate” premiums to cover claims. The agency’s requested increases varied widely, from just over 4% in parts of the mountains to more than 99% in some beach areas.
The agreed increases, carried out in two parts, vary per location. On average statewide, the base rate will increase by 7.5% on June 1 and an additional 7.5% on June 1, 2026.
The highest increases generally will occur in parts of eastern North Carolina that were hit hard by Hurricane Matthew in 2016 and Hurricane Florence in 2018, The News & Observer of Raleigh reported. For example, beach areas from Carteret to Brunswick counties will increase by an average of 16% by mid-2025 and by a further 15.9% by mid-2026.
Areas most affected by historic flooding from Hurricane Helene in the fall will see lower-than-average increases. For example, base rates in Buncombe, Watauga and Yancey counties will rise 4.4% in 2025 and 4.5% in mid-2026.
In densely populated areas, base rates in Raleigh and Durham will increase an average of 7.5% over the next two years. In Charlotte, rates would rise 9.3% in 2025 and 9.2% in 2026.
The settlement also bars the Rate Bureau from seeking to raise rates again before June 1, 2027, Causey’s release said.