RALEIGH. North Carolina (AP) — Base rates for homeowners insurance premiums in North Carolina will increase on average about 15% by mid-2026 as part of an agreement reached by the state Department of Insurance and the industry.
The agreement announced Friday by Commissioner Mike Causey contrasts with the January 2024 request from the North Carolina Rate Bureau, which represents insurance companies, which sought an overall average increase of 42.2%.
Causey, an elected official who began his third term earlier this month, formally rejected the office’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 its witnesses would maintain that rates should be reduced or increased by less than 3%.
But for the agreement, a hearing officer, in consultation with Causey, would have decided what the new rates should be. The Rate Office could have appealed that decision in court.
Causey said in a news release that the proposed rate increases “are sufficient to ensure that insurance companies, which have paid out large sums due to natural disasters and face increasing reinsurance costs due to national catastrophes, have adequate funds available.” to pay claims. “
The bureau attributed its large request to high inflation, particularly in building materials, combined with calamitous storms and “severely inadequate” premium rates to cover claims. The increases requested by the office had varied widely from just over 4% in parts of the mountains to more than 99% in some beach areas.
The agreed-upon increases, made in two parts, will vary by location. On average across the state, the base rate will increase by 7.5% on June 1 and another 7.5% on June 1, 2026.
The largest increases will generally occur in parts of eastern North Carolina 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 see an average increase of 16% by mid-2025 and an additional 15.9% by mid-2026.
Areas hardest hit by historic flooding from Hurricane Helene in the fall will face below-average increases. Base rates in Buncombe, Watauga and Yancey counties, for example, will increase 4.4% in 2025 and 4.5% in mid-2026.
Among highly populated areas, base rates in Raleigh and Durham will increase an average of 7.5% in each of the next two years. In Charlotte, rates would increase 9.3% in 2025 and 9.2% in 2026.
The agreement also prohibits the Rate Office from undertaking an effort to raise rates again before June 1, 2027, according to Causey’s statement.