State makes major decision about home insurance — here's how it could impact residents

Homeowners insurance premiums are rising by around 15% in North Carolina due to the impacts and increased frequency of extreme weather events.

Although the increase may cause residents financial hardship, it is far better than the 42.2% increase proposed by the North Carolina Rate Bureau. 

What's happening?

As WRAL News reported, the North Carolina Department of Insurance and the industry reached a settlement to increase base rate insurance premiums by 15% by mid-2026.

The settlement followed a formal hearing involving evidence, witness statements, and arguments. The state insurance commissioner said the rate increases ensure companies can pay future claims after paying hefty amounts for natural disasters.

The bureau requested increases of over 99% in some North Carolina beach areas especially prone to storms. It also attributed its request to rising building material costs due to high inflation and reinsurance costs.

The largest rate increases will occur in eastern North Carolina, where Hurricane Matthew hit in 2016 and Hurricane Florence hit in 2018. 

Why are insurance rate increases important?

Insurance rate increases impact homeowners by making monthly expenses unaffordable. Homeowners who can't pay exorbitant premiums may be forced to move or cease having insurance altogether. This puts families in vulnerable positions when extreme storms strike, and they cannot rebuild their lives after devastating damage.

Climate issues significantly contribute to this trend, driving insurance costs higher yearly. Research shows that premiums have increased by around 34% nationwide. The most at-risk homes are becoming uninsurable, signaling how unprepared many communities are to deal with increasingly intense winds and flooding. 

What's being done about the cost of homeowners insurance?

A 15% rate increase could be considered "good news" compared to what North Carolina homeowners could have faced and the national average.

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Fortunately, such matters are filtered through the court system and subject to hearings and settlements rather than decided upon without fair argument and negotiation.

The new settlement prohibits the bureau from increasing rates again until June 2027.

Bureau Chief Operating Officer Jarred Chappell said the settlement is "a step in the right direction."

However, due to past history and future predictions, insurance companies are still at risk of leaving hurricane-prone areas of North Carolina.

A North Carolina law allows companies to insure high-risk homeowners if they pay premiums up to 250% of the bureau's rate. Although this premium increase is massive, many residents feel it's worth the cost to have coverage and peace of mind.

Regardless of where you live, you can become more resilient to extreme storms by disaster-proofing your home. Durable construction companies are helping homes withstand high winds and heavy snow, resist fires, and reflect high heat.

Embracing resilient design ideas and incorporating green building materials is an ideal way to take home protection into your own hands rather than relying solely on help from insurance companies.

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