North Carolina Requests 68% Increase in Dwelling Insurance Rates Over Two Years

North Carolina companies have submitted a request for a 68.3% average increase in dwelling insurance rates over two years, with initial and subsequent hikes of 28.5% and 30.9% respectively, aimed at addressing rising claims costs primarily driven by severe storm damage and inflation in construction costs.

The North Carolina Rate Bureau, a collective of insurers separate from the Department of Insurance which must approve rate changes, filed the proposal on October 30, 2025. The increases would be implemented in mid-2026 and mid-2027 if approved.

Dwelling insurance, often used for rental or vacation properties rather than primary residences, does not typically include liability coverage unlike homeowners insurance. Rate changes for these policies are separate and distinct from those affecting standard homeowners insurance in the state. The Rate Bureau justified the need for higher premiums based on claim data from 2019 to 2023 showing significant increases, citing the frequency of billion-dollar disasters, particularly in coastal areas prone to storms.

The North Carolina Department of Insurance holds regulatory authority and frequently negotiates settlements with the Rate Bureau, which historically results in rate changes lower than initial requests; in 2023, a 50.6% requested hike was reduced to an 8% increase in a settlement. Public comments on the current proposal are open through November 19, 2025. Consumers should note that approved rate changes represent averages and actual premiums will vary by carrier, location, and individual property risk assessments.

Increasing construction inflation and the high cost of rebuilding post-disaster are highlighted factors influencing the request, reflecting broader market challenges in balancing risk management with affordable insurance coverage. The Rate Bureau emphasizes a need to maintain competitive market participation among insurers while adjusting rates to reflect evolving risk profiles. The process underscores the complexity of insurance regulation amid increasing weather-related losses and economic pressures in the property insurance sector in North Carolina.