North Carolina Homeowners Insurance Rates Rise Up to 15% over Two Years
North Carolina is implementing new homeowners' insurance rates that will raise the average base rate statewide by approximately 15% over the next two years. This change stems from a recent two-year settlement negotiated between Insurance Commissioner Mike Causey and the North Carolina Rate Bureau, which represents about 100 insurance companies in the state. The initial request from the Rate Bureau was for a substantial 42.2% increase, citing factors such as rising construction and labor costs, weather-related claims, and challenges in the reinsurance market. However, the commissioner rejected this larger increase, leading to closed-door negotiations, public hearings, and a final compromise rate adjustment deemed reasonable for both insurers and policyholders.
The average premium hike varies significantly across different regions of the state, reflecting local risk profiles and historical claims data. For example, residents in Durham and Wake counties can expect an average increase of 7.5% annually over the next two years, while Orange County will see smaller increments around 3.4% and 3.2%. Mecklenburg County faces higher increases nearing 9.3% and 9.2%. Areas affected by past hurricanes such as Matthew in 2016 and Florence in 2018 generally encounter higher rate adjustments due to their elevated risk exposure.
The Department of Insurance clarifies that these are base rate changes, which set the standardized limit on premiums, but insurers apply additional risk-based factors individually to determine actual premiums. This means that insured homeowners may experience rate changes different from the base rate percentage increases. Insurers also retain the ability to employ "consent-to-rate" options permitting premiums up to two and a half times higher than the approved limits, subject to state law.
Experts suggest homeowners review the Department's provided rate change tables and calculate likely impacts by applying the published percentage increases to their current premiums. However, actual cost changes will depend on individual policy risk assessments and underwriting practices. The Department of Insurance advises policyholders to remain informed and engaged with their insurance providers to understand specific premium adjustments as the new rates take effect.
This rate adjustment exercise highlights the balancing act between maintaining market stability for insurance companies amid rising operational and claim costs, and protecting consumers from abrupt premium shocks. The negotiated settlement reflects regulatory oversight seeking to moderate rate increases while acknowledging the economic pressures on the homeowners insurance market in North Carolina. Ongoing monitoring of claims trends, underwriting practices, and market conditions will influence future rate setting and insurer participation in the state.
Insurance professionals and market observers should note the differentiated regional impacts and the continued relevance of reinsurance market dynamics. Rising costs and hurricane-related losses remain key drivers influencing the homeowners insurance sector, underscoring the need for adaptive underwriting and regulatory approaches.