The base rates on new and renewing homeowners insurance policies across northeastern North Carolina will cost more starting this month, after a settlement reached in January between insurance companies and state regulators.
The North Carolina Rate Bureau, which represents companies writing policies in the state, originally asked for an increase topping 45% along the Outer Banks and an almost 34% increase on the mainland.
Under the terms of the settlement reached by N.C. Insurance Commissioner Mike Causey, policies for primary residences from Carova to Ocracoke, known as Territory 110, will increase by 5.1% starting this month, and then 4.8% in June 2026.
In Territory 130, which covers mainland Currituck, Dare, and Hyde counties, rates will go up by 2.8% each year.
Camden, Chowan, Pasquotank, Perquimans, Tyrrell, and Washington counties, where the Rate Bureau wanted to see a hike of 25.6%, will instead only go up by 1% this year and 0.9% in 2026.
Along the central and southeastern beach areas of the state, from Atlantic Beach to the South Carolina border, the companies wanted an increase of 99.4%, but instead get an increase of 16% in 2025 and 15.9% next year.
The Rate Bureau is also not allowed to request an additional increase until June 2027.
The homeowners insurance request was the first since a 2021 settlement with the state’s Department of Insurance, which raised rates across northeast N.C. of 9.9% and blocked any new rate change proposals until 2024.
Owners of rental properties were hit with increases to their dwelling policies last year following a settlement.
And this past April, the insurance industry asked for another rate increase for mobile homes spread over a three year period, just two years after a settlement was reached that raises rates for mobile homes this fall.
Causey touted earlier this year that he was able to prevent homeowners’ policy rate hikes requested by the Rate Bureau from topping 45% along the Outer Banks, and an almost 34% increase on the mainland.
“I fought for consumers and knocked them back to 7.5% increases (average statewide) over two years with a maximum of 35% in any territory,” Causey said. “We consider this settlement a big win for both homeowners and North Carolina.”
“This settlement will help insurers in North Carolina continue to provide customers with the peace of mind at the core of every homeowner’s policy: that when disaster strikes, your carrier will be there to help,” said N.C. Rate Bureau Chief Operating Officer Jarred Chappell.
But the settlement did not receive positive reviews from the industry and the local area when it was announced six months ago.
“The current base rates for homeowners’ insurance in coastal areas are already substantially higher than other areas of North Carolina, so even an increase of 5.1% is significant to policyholders in Dare and Currituck counties,” Outer Banks Association of Realtors Government Affairs Director Donna Creef said in January.
“These rates are sufficient to make sure that insurance companies, who have paid out large sums due to natural disasters and face increasing reinsurance costs due to national catastrophes, have adequate funds on hand to pay claims,” Causey said in a statement.
Chappell disagreed with Causey, saying it was an adequate settlement, but called it “a step in the right direction, and this industry always looks to work with regulators toward solutions.”
Creef said Causey did not follow through with the review process of the request.
“The rates requested by the NC Rate Bureau filed in January 2024 were excessive, and I believe that would have been the conclusion of the hearing process if the hearing proceedings had continued,” Creef said.
The settlement announced in January came after the first hearing on any rate request since the Republican first took office in 2017 began last fall.
Critics said he gave “sweetheart deals” to the companies previously by not forcing them to justify their requests.
Causey countered that his predecessors were also inclined to settle requests.
“During the past 20 years, there have been eight dwelling and fire rate filings. Only one went to a hearing,” Causey said last fall. “Settling and not going to court saves consumers and taxpayers money. Hearings are the exception when negotiations fail.”
“The rating process is disingenuous, with the Rate Bureau filing excessive rate increases, NCDOI negotiating lower increases, and then the settled rate increases being announced as a positive outcome for policyholders,” Creef said at the time the settlement was announced.
Causey has also been criticized for supporting legislation passed by the N.C. General Assembly that revamped “consent-to-rate” in 2019, which is an agreement between customers and insurance companies that allows a higher rate to be charged.
That has been responsible for recent spikes in rates for some customers along the coast that went above and beyond the base rates negotiated between the Department of Insurance and the Rate Bureau.
Some experts have said consent-to-rate is the only way many insurance companies can continue to do business in North Carolina.
State law sets a cap of 250% above the base rate for consent-to-rate policies, and allows a policyholder to be dropped if the company determines a premium to cover a home will exceed that cap.
Just over 44% of homeowners policyholders across the state had a consent-to-rate policy in 2023, according to the most recent data available from the Department of Insurance.
Of the 19,737 policies written from Carova to Ocracoke with an average annual premium of $2,632.46, there were 7,159 policies (36.3%) that were consent-to-rate with an average consented premium of $3,701.44.
On the Currituck, Dare and Hyde mainland, there were a total of 15,092 homeowners policies with an average annual premium of $1,471.06, and 3,652 consent-to-rate policies (24.2%) with an average premium of $2,718.42.
There were 55,588 total policies in Camden, Chowan, Pasquotank, Perquimans, Tyrrell and Washington counties with average premiums of $1,400.20, and 14,506 consent-to-rate policyholders (26.1%) with an average premium of $2062.64.
