Home insurance rates in North Carolina will rise by an average of 7.5% in both 2025 and 2026, following a settlement negotiated by Insurance Commissioner Mike Causey (pictured above).
The rate increases, which will take effect on June 1 of each respective year, are significantly lower than the 42.2% average hike initially requested by the North Carolina Rate Bureau.
According to the North Carolina Department of Insurance, the agreement also caps rate increases at 35% for any specific territory and prevents the rate bureau from submitting another rate increase request until June 2027.
“North Carolina homeowners will save approximately $777 million in insurance premiums over the next two years compared to what the insurance companies requested,” Causey said in a report from AM Best.
He added that the new rates are structured to ensure carriers can continue to pay claims despite the financial pressures of recent natural disasters and rising reinsurance costs.
The rate bureau’s original proposal, filed in January 2024, sought increases as high as 99.4% in certain areas. Causey publicly opposed the request the following month, arguing that the justification for such an increase was insufficient. His opposition led to a 19-day hearing, which ultimately resulted in the settlement agreement.
The rate bureau noted that its last approved rate increase occurred in 2020, and that approval covered only a portion of the bureau’s original request. Additionally, the 2020 settlement barred the bureau from requesting further increases until 2024.
During an October 2024 hearing, the bureau cited inflation and a steady increase in severe weather events as contributing factors to the requested rate adjustments. The bureau argued that these conditions have created significant challenges for carriers operating in the state.
The insurance department, however, initially determined that a smaller increase, ranging from 0% to 3%, would have been justified.
Membership in the North Carolina Rate Bureau is required for insurers to operate in the state. This agreement represents a compromise aimed at balancing the financial sustainability of insurance providers with affordability for homeowners.
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