North Carolina Homeowners Face 7.5% Insurance Rate Hike This Month
Homeowners across the state will see insurance premiums jump 7.5% this month, the latest in a series of increases driven by climate risks and rising repair costs.
RALEIGH, NORTH CAROLINA — North Carolina homeowners are facing another insurance premium increase this month, with rates climbing 7.5% as part of a two-year rate adjustment negotiated in 2024.
This increase follows a 7.9% rate hike implemented in 2022, continuing a trend of rising costs that insurance experts attribute to growing climate-related risks across the state.
Climate Change Drives Premium Increases
Climate-related risk is the main cause of increasing insurance premiums, according to industry analysis. Insurance companies are responding to higher costs associated with homes not built to withstand current and future risks from wind, wildfire, and other natural hazards.
The rising cost of repairs has also contributed to premium increases. Since 2018, North Carolina has experienced more than 40 disasters that each caused over $1 billion in damage, destabilizing local economies and driving up insurance claims.
Industry Profits Despite Higher Payouts
While insurance costs continue to rise for homeowners, recent research shows that insurers are making record profits despite increased losses from natural disasters. Analysis indicates that the share of premiums paid out in claims has decreased over the past several decades.
Insurance companies cite the need to adjust rates based on escalating repair costs and increased frequency of severe weather events. The industry maintains that premium increases reflect the true cost of providing coverage in areas with heightened climate risks.
Impact on North Carolina Households
The consecutive rate increases are straining household budgets across North Carolina, forcing many residents to reconsider their coverage options or face difficult financial decisions. Insurance, which many homeowners previously considered a routine expense, has become a significant budget item requiring careful planning.
The two-year rate increase negotiated in 2024 was designed to provide some predictability for both insurers and policyholders, though the cumulative impact of multiple increases continues to challenge affordability for many families.
State insurance regulators worked with companies in 2024 to structure the rate adjustments over two years rather than implementing larger single-year increases. The negotiated settlement aimed to balance the financial stability of insurance markets with consumer affordability concerns.
