North Carolina homeowners avoided a proposed 42% increase in homeowners’ insurance rates after negotiations between insurers and state regulators, but an average 7.5% premium increase taking effect June 1 will still raise costs for policyholders across the state.
The increase represents the second phase of a settlement reached between Insurance Commissioner Mike Causey and the insurance industry after Causey rejected the North Carolina Rate Bureau’s original request in 2024. Under the agreement, homeowners received a combined statewide average increase of 15%, split into 7.5% increases in 2025 and 2026, rather than the 42% increase initially sought by insurers. Insurers are barred from seeking another rate increase before June 1, 2027.
The settlement illustrates the balancing act facing regulators in a market confronting rising catastrophe losses, construction costs and reinsurance expenses.
According to Bankrate, the average homeowners’ insurance premium in North Carolina is approximately $2,951 annually, or about $246 per month, for a home carrying $300,000 in dwelling coverage. That compares with a national average of $2,424 per year.
While the negotiated settlement reduced the requested increase, policyholders will still see higher costs. The North Carolina Department of Insurance said its role is to ensure insurers have sufficient funds to pay claims while preventing rates from becoming excessive or discriminatory. The department declined to characterize conditions in the state as an insurance crisis.
The rate increase arrives against a backdrop of growing weather-related losses.
A US Government Accountability Office report found that some North Carolina communities experienced inflation-adjusted premium increases exceeding 50% between 2019 and 2024, particularly in coastal areas exposed to severe storms.
Additional context from industry and policy reports points to continuing pressure from catastrophe risks. North Carolina has experienced more than 40 disasters causing at least $1 billion in damage since 2018. Other analyses note that insurers have pointed to catastrophe losses, rising rebuilding costs and higher reinsurance expenses when seeking rate increases.
The issue extends beyond coastal counties. Hurricane Helene caused widespread damage across western North Carolina in 2024, adding to concerns about future claims costs and recovery expenses.
Democratic leaders have argued that the approved increase adds to existing challenges, including policy non-renewals, denied claims and rising premiums.
State Sen. Natalie Murdock said homeowners are facing non-renewals, denied claims and rapidly increasing insurance costs, while Democratic Party Chair Anderson Clayton criticized state leaders for not providing additional support to homeowners and small businesses recovering from Hurricane Helene.
For many households, insurance costs are only one part of a growing list of expenses that includes mortgage payments, property taxes, maintenance costs and disaster recovery expenses.
The impact is also being felt by business owners.
Tony Dunn, in a Yahoo Finance report, said his premiums have nearly tripled over the past six years, including a 30% increase following Hurricane Helene despite his home not being damaged.
"We moved here because we thought we weren't going to have insurance issues," he said.
Alex Webber, whose Madison County business was flooded by Hurricane Helene, said both her homeowners and business insurance premiums increased by about 50% afterward. She also said she received no FEMA assistance.
The Department of Insurance said homeowners may be able to reduce costs by comparing policies from different insurers, reviewing coverage levels, asking about available discounts and considering higher deductibles where appropriate.
Additional guidance by Consumer Reports suggests consumers may also find savings through bundling home and auto coverage, making property upgrades that reduce risk, maintaining strong credit profiles and evaluating whether small claims are worth filing. Consumer Reports noted that some home improvements, including roof replacements and leak-detection systems, may help lower premiums depending on the insurer.
For the insurance sector, the June 1 increase closes a lengthy rate dispute. For homeowners, however, the settlement means higher premiums remain part of the state's evolving property insurance landscape.
