North Carolina Homeowners Insurance Premiums to Increase 15% by 2026

Are you a North Carolina homeowner facing a potential 15% increase in your insurance premiums? Hold onto your hats, because this isn't just another rate hike; it's a financial tsunami threatening to wipe out your budget! Recent news reveals that a settlement between the state Insurance Department and the industry will result in a staggering average increase in homeowners' insurance premiums by mid-2026. This shocking development comes after months of negotiations and a battle between the state and insurance companies seeking even higher rates.

Understanding the Rate Hikes

The agreed-upon increase will unfold in two phases: a 7.5% hike on June 1, 2025, followed by another 7.5% increase on June 1, 2026. However, the impact won't be uniform across the state. Coastal areas, particularly those ravaged by past hurricanes like Matthew and Florence, will experience significantly larger increases, exceeding 30% in some cases. Conversely, areas affected by less catastrophic weather events will see lower, albeit still substantial, rate jumps.

Regional Variations in Premium Increases

The following are a few key takeaways regarding the premium increases for specific areas of North Carolina:

• Coastal Regions (Carteret to Brunswick Counties): Expect an average 16% increase in mid-2025 and an additional 15.9% in mid-2026. This reflects the higher risk of damage due to severe weather.
• Raleigh and Durham: These areas will face a more moderate 7.5% increase each year.
• Charlotte: Charlotte homeowners can expect slightly higher increases of 9.3% in 2025 and 9.2% in 2026.
• Mountain Areas (Buncombe, Watauga, and Yancey Counties): These counties, which are less exposed to hurricanes, will experience significantly smaller rate hikes than the coastal regions.

The Reasons Behind the Rate Increases

The North Carolina Rate Bureau, which represents insurance companies, cited several factors as justification for the premium increase request. These include:

• High Inflation: Soaring costs of building materials and labor significantly inflate the cost of repairs and rebuilding after storms.
• Catastrophic Storms: Hurricanes and severe weather events lead to substantial payouts from insurance companies.
• Inadequate Premiums: The bureau claims previous premium rates were too low to sustain claims payments and adequately protect insurance company reserves.
• Exploding Reinsurance Costs: This means the cost of insuring the insurance companies has skyrocketed, further impacting premiums.

What This Means for North Carolina Homeowners

The increased rates will inevitably impact the financial stability of many North Carolina homeowners. It highlights the challenges of living in disaster-prone areas and the escalating cost of home insurance coverage in these states. This development underscores the vital role of financial planning and proactive steps such as shopping for various insurance coverage. For those homeowners with mortgages, expect to discuss any changes in rate with your bank promptly.

Take Away Points

• Homeowners insurance rates in North Carolina are set to increase significantly by mid-2026.
• The increases will vary by location, with coastal areas experiencing the most substantial jumps.
• The rate hikes are attributed to multiple factors such as inflation, severe storms, inadequate premium rates, and rising reinsurance costs.
• Homeowners need to carefully budget for the premium increase and seek out affordable coverage options.