Being a homeowner is a lot of hard work. No matter how prepared you are, sometimes you can find yourself in a horrible situation through no fault of your own. Due to a warming climate, severe weather events have unfortunately become too common all around the globe.
While property insurance has helped some homeowners to recover after losing everything, insurance companies in North Carolina are eyeing a massive spike in their rates. And this just might make premiums too expensive for countless people.
What's happening?
As reported by the Office of Financial Research in December 2023, some insurance companies have begun to stop renewing coverage in regions that have been ravaged by natural disasters. In other cases, companies have sought to dramatically increase rates throughout states that have been hit the hardest.
After many homes in western North Carolina were destroyed by floodwaters caused by Hurricane Helene, homeowners filed close to $2.5 billion in insurance claims. Despite over $3 billion in federal assistance, residents in North Carolina are still in dire need of help.
Joe Stewart, vice president of government affairs for the Independent Insurance Agents of North Carolina, offered up a blunt explanation to NC Health News:
"Insurance is really what it costs to replace or repair something that's been damaged," Stewart said. "If the cost of those things is going up, the cost to provide for the replacement or repair of them has to go up. So if lumber is more expensive, then the cost of insurance is more expensive because you have to buy lumber to repair a house."
Why is the rising cost of homeowner's insurance concerning?
The increase in insurance rates likely won't stop at just the counties in North Carolina. As climate disasters become more common, insurance companies will adjust rates throughout the entire country in order to make up for financial losses.
According to a January 2025 press release from the U.S. Department of the Treasury, the cost of homeowner's insurance has increased 8.7 percent faster than current inflation rates. In some states like California, which has been ravaged by wildfires, insurance companies are proposing even steeper price hikes.
As stated in its press release, the Treasury reports that areas affected by "climate-related perils" have an increased frequency of insurance claims. The average claims in these areas are $5,000 more than the claims in areas that have a lower risk of natural disaster.
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Do you think your house could withstand a hurricane? Click your choice to see results and speak your mind. |
No way 😨 From 1970 to 2023, the Environmental Protection Agency has reported, the global average temperature has increased about 1.7°F. This dramatic rise is a result of harmful pollution caused by human activity. And this rapid change in climate has contributed to more severe weather events, such as Hurricane Helene.
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What's being done about the rising cost of homeowner's insurance?
Although insurance companies are racing to increase rates in a state recovering from the damaging weather of Hurricane Helene, there are organizations working to prevent massive cost spikes in the short term.
North Carolina Insurance Commissioner Mike Causey believes that he prevented insurance companies from enacting the rate increases too quickly.
"The insurance companies wanted to raise our homeowners' rates up to 99.4% in some areas and an average 42.2% statewide in a single year," Causey said in a statement.
"I fought for consumers and knocked them back to 7.5% increases over two years with a maximum of 35% in any territory. We consider this settlement a big win for both homeowners and North Carolina."
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