NORTH CAROLINA
North Carolina Commissioner Rejects 42% Home Rate Request, Negotiates 7.5% Average Hike
RALEIGH, N.C. //BestWire// - North Carolina home insurance rates will increase an average of 7.5% this year and in 2026, a rate Insurance Commissioner Mike Causey negotiated down from a proposed 42.2% average rate increase request from the North Carolina Rate Bureau.
The 2025 and 2026 rate increases will go into effect on June 1 of their respective years, the North Carolina Department of Insurance said in a statement.
Insurers wanted to raise rates as high as 99.4% in some areas, Causey said in a statement calling the settlement a “big win for homeowners and North Carolina.”
The settlement also caps increases at 35% for any territory and prohibits the rate bureau from asking for another increase until June 2027, Causey said.
“North Carolina homeowners will save approximately $777 million in insurance premiums over the next two years compared to what the insurance companies requested,” Causey said.
He added the new rates will be sufficient to make sure carriers are able to continue paying claims despite recent costly natural disasters and their impact on growing reinsurance costs.
The bureau first proposed the rate increase in January 2024, and Causey voiced his position to the increase in the following month, saying he didn’t see a justification for the increase (BestWire, Feb. 6, 2024).
His challenge prompted a 19-day hearing to come to the final agreement, according to a letter from the rate bureau to all member companies. Membership in the rate bureau is a prerequisite for doing business in the state.
In justifying the increase, the rate bureau said it hadn’t received a rate increase since 2020, and that approval was only for a small portion of the requested rate increase. The 2020 request and subsequent settlement also barred the bureau from requesting another increase until 2024.
Since that last rate increase, carriers in the state faced growing challenges from rising inflation and a steady stream of severe weather, the bureau said during an October hearing (BestWire, Oct. 8, 2024). At that time, the insurance department said a 0% to 3% increase would be justified.
Attempts to gain further comment from the rate bureau and the insurance department were unsuccessful.
The five largest writers of homeowners multiperil insurance in North Carolina during 2023, based on direct premiums written, were: State Farm Group, 15.39%; North Carolina Farm Bureau Insurance Group, 12.77%; USAA Group, 10.46%; Nationwide Property & Casualty Group, 6.72%; and Allstate Insurance Group, 6.64%, according to BestLink.
(By Steve Hallo, senior associate editor, BestWire: Steve.Hallo@ambest.com)