Starting June 1, 2025, homeowners across North Carolina will see their insurance premiums rise by 7.5%, adding approximately $243 to the average annual bill. This increase is part of a two-phase adjustment approved in January 2024, with another 7.5% hike set to take effect on June 1, 2026.
This isn’t an isolated change by a single insurer—it’s a broad, statewide adjustment affecting most insurance providers in North Carolina. The original request from the insurance industry was far steeper: a proposed 42.2% rate increase. State regulators stepped in and negotiated it down to the current 7.5% for this year, with the same amount scheduled for next year.Another recent increase—an 8% average hike for dwelling policies—already took effect on November 1, 2024, showing a continued upward trend in costs.
Why Are Rates Going Up?
Hurricanes and flooding are becoming more frequent and destructive, especially along the coast, leading to higher claims.Rebuilding Costs: The price of lumber, materials, and labor has surged, making home repairs and reconstruction significantly more expensive.Shared Risk Pool: Even homeowners in lower-risk areas contribute to the overall cost, as insurance spreads risk across the state.North Carolina is not alone—states like Florida and Louisiana have faced similar or even steeper hikes due to climate-related risks.
How Rate Increases Are Approved in North Carolina
Unlike many states, North Carolina uses a centralized system through the North Carolina Rate Bureau (NCRB). Insurers submit rate change proposals to the NCRB, which compiles data on claims, storm risks, and construction costs, then files a collective request with the North Carolina Department of Insurance (NCDOI).The NCDOI reviews the proposal, holds public hearings, and negotiates changes. In this case, the department successfully reduced the requested 42.2% increase to 7.5%, demonstrating regulatory oversight aimed at protecting consumers.
The “Consent to Rate” System
North Carolina uses a unique “consent to rate” policy for home and auto insurance. Insurers cannot raise your premium without your written consent. However, they may inform you that they can no longer provide coverage unless you accept the new rate. While this gives consumers a formal say, it can feel like limited choice—especially if other insurers are pulling back from high-risk areas.
Who Is Affected Most?
Homeowners in coastal regions face the biggest impact due to hurricane risks and location-based surcharges. Rapidly growing metro areas like Raleigh and Charlotte are also seeing pressure, as rising home values increase rebuilding costs. Even those in low-risk zones are affected, as they share in the statewide insurance pool.
Is the Market Working for Homeowners?
Currently, the insurance market in North Carolina is under strain. Climate change, rising construction costs, and increasing claims are challenging the sustainability of current pricing models. While the regulatory process helps moderate extreme hikes, homeowners are still facing fewer choices and higher bills.As extreme weather becomes more common, the financial burden on homeowners continues to grow, making affordability and access to coverage critical issues for the future.
Related topics:
