Paul Sanchez
North Carolina has seen a rise in insurance rates across various sectors, including automobile, homeowner's, and flood insurance. In July 2025, changes to automobile insurance policies came into effect, impacting insurance premiums for policyholders, experienced drivers, and inexperienced drivers. There was also a statewide average increase of 5% in automobile insurance rates, with a decrease in motorcycle liability insurance rates. Homeowner's insurance rates have also increased, with an average statewide base rate increase of 7.5% in 2025 and 2026. Additionally, North Carolina residents have experienced changes to underinsured motorist coverage, and flood insurance has become more critical due to the state's vulnerability to extreme weather events and the outdatedness of FEMA's floodplain maps. These factors have contributed to a rise in insurance rates across the state.
| Characteristics | Values |
|---|---|
| Automobile insurance rates | 5% increase |
| Motorcycle liability insurance rates | 16.3% decrease |
| Mobile Home Fire (MH-F) policies | 11% increase over two years |
| Mobile Home Casualty (MH-C) policies | 8% increase over two years |
| Homeowner's insurance rate increase | 7.5% on June 1, 2025, and 7.5% on June 1, 2026 |
| Homeowner's insurance rate increase request | 42.2% |
| Homeowner's insurance rate increase (2020) | 7.9% |
| Homeowner's insurance rate increase (actual) | 41% |
| Automobile insurance rate increase request | 22.6% |
| Automobile insurance rate increase request (2023) | 28.4% |
| Minimum liability limits for bodily injury | $50,000 per person and $100,000 per accident |
| Minimum liability limits for property damage | $50,000 |
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What You'll Learn
- Homeowner's insurance rates increased by 7.5% in 2025 and 2026
- Automobile insurance rates increased by 5% on July 1, 2025
- Mobile home fire and casualty insurance rates increased by 11% and 8% respectively
- Insurance companies requested a 42.2% increase in homeowner's insurance rates in 2024
- In 2025, insurance companies requested a 22.6% increase in automobile insurance rates
Homeowner's insurance rates increased by 7.5% in 2025 and 2026
North Carolina has witnessed a surge in insurance rates, with homeowners' insurance rates increasing by 7.5% in 2025 and a further 7.5% in 2026. This rise in insurance rates has been a cause for concern among residents, with some experiencing even higher increases. The situation has been exacerbated by the 'consent to rate' clause, found in more than half of home insurance policies across the state, which allows insurers to increase rates by up to 250% of the maximum state-allowed rate. This clause has resulted in cases like that of a North Carolina man whose homeowners' insurance soared by 41% in a single year, despite no claims or changes to his policy.
The North Carolina Rate Bureau, which represents insurance companies in the state, had initially requested an average statewide increase of 42.2% in homeowners' insurance rates. However, Insurance Commissioner Mike Causey negotiated a settlement, resulting in the agreed-upon 7.5% increase over two years. This settlement is expected to save North Carolina homeowners approximately $777 million in insurance premiums over that period.
The primary factors contributing to the increase in insurance rates include the rising costs of natural disasters, increasing reinsurance costs due to national catastrophes, and inflation in the construction industry. Additionally, repair costs and home values have also been on an upward trajectory, impacting insurance rates across the country. The situation is further complicated by the 'consent to rate' clause, which, while providing a mechanism for individuals to obtain a policy when an insurance company might otherwise decline, has led to significant rate hikes for some homeowners.
To address these concerns, Commissioner Causey has taken several steps. Firstly, he urged residents to be cautious and take extra precautions to protect their properties, especially in light of a recent wave of break-ins across the state. Secondly, he advised residents to shop around for insurance carriers to find the best rates and coverage that suits their needs. Lastly, he encouraged residents to review their policies annually to ensure they maintain appropriate coverage while taking advantage of available discounts.
In addition to homeowners' insurance, automobile insurance rates in North Carolina have also been subject to change. The state witnessed a 22.6% increase request by insurance companies in 2025, following a 28.4% increase request in 2023. These changes impact insurance premiums for both experienced and inexperienced drivers, with surcharges and minimum liability limits adjustments.
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Automobile insurance rates increased by 5% on July 1, 2025
Automobile insurance rates in North Carolina increased by 5% on July 1, 2025. This change was the result of recently enacted legislation and affected both new and renewed policies. The increase in insurance rates is expected to impact the insurance premiums for policyholders, regardless of their level of driving experience.
Previously, insurance policies had minimum liability limits of $30,000 per person and $60,000 per accident for bodily injury, and $25,000 per accident for property damage. With the new legislation, these limits have increased to $50,000 per person and $100,000 per accident for bodily injury, and $50,000 per accident for property damage. This means that policyholders with the previous minimum limits will likely experience higher premiums when their policies are renewed to meet the new coverage requirements.
In addition to the changes in liability limits, the legislation has also introduced adjustments to surcharges for inexperienced drivers. Before the new legislation, insurers applied a premium surcharge, known as an inexperienced operator surcharge, to drivers with less than three years of driving experience. However, as of July 1, 2025, this surcharge has been expanded to include drivers with less than eight years of experience. While the surcharges for the additional years (years four through eight) are lower than the initial three years, they still contribute to an overall increase in insurance costs for these drivers.
Furthermore, the new legislation has altered the way underinsured motorist coverage is determined. Previously, whether a vehicle was considered underinsured was based on the limits of liability insurance and bodily injury liability bonds at the time of the accident. Now, underinsured status is determined by the total damages sustained by the individual seeking underinsured motorist coverage benefits. Additionally, the amount of underinsured motorist coverage applicable to a claim cannot be reduced by a setoff or credit against any coverage, except for workers' compensation as outlined in the statute. These changes aim to provide more comprehensive coverage for individuals involved in accidents with underinsured motorists.
It's important to note that insurance rates are subject to change and can vary based on various factors. While this information provides an overview of the 5% increase in automobile insurance rates in North Carolina as of July 1, 2025, residents are encouraged to stay updated with the North Carolina Department of Insurance for the most current information and to consult their insurance providers for specific details regarding their policies.
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Mobile home fire and casualty insurance rates increased by 11% and 8% respectively
Mobile home fire and casualty insurance rates in North Carolina will increase by 11% and 8% respectively over the next two years. This decision follows an agreement between the North Carolina Rate Bureau and the state's Department of Insurance. The rate adjustments will impact around 148,000 policyholders.
The North Carolina Rate Bureau initially proposed much higher increases, with an 82.9% hike for mobile home fire policies and a 49.9% increase for casualty policies. These initial proposals were rejected by North Carolina Insurance Commissioner Mike Causey. The approved increases are significantly lower than the original requests, saving mobile homeowners over $10 million annually.
The rate hikes are intended to address rising costs in construction materials, labour, and claims expenses, as well as the increased price of mobile homes. According to the NCRB, the rising costs are influenced by inflationary pressures and the impact of climate change, which results in more frequent and severe storms.
The first increase will come into effect on September 1, 2025, with the second set to begin on August 31, 2026. Insurers cannot request another rate increase until September 1, 2027, according to the insurance department. This agreement prevents a lengthy and detailed rate hearing, which was originally scheduled for May 31.
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Insurance companies requested a 42.2% increase in homeowner's insurance rates in 2024
In January 2024, insurance companies in North Carolina requested a 42.2% increase in homeowners' insurance rates. This request was made by the North Carolina Rate Bureau, which represents insurance companies writing policies in the state, to the North Carolina Department of Insurance. The proposed increase would have taken effect on August 1, 2024.
The request for the rate increase was not unanimously accepted. North Carolina Insurance Commissioner Mike Causey opposed the proposal, stating that the insurance companies wanted to raise homeowners' rates by up to 99.4% in some areas. He negotiated a settlement that resulted in a significantly lower increase. According to the agreement, the average statewide base rate would increase by 7.5% on June 1, 2025, and an additional 7.5% on June 1, 2026.
The request for the rate increase in North Carolina is part of a broader trend of rising homeowners' insurance rates across the United States. Several factors have contributed to this increase, including climate change, inflation, reinsurance market dynamics, and weak regulatory oversight. According to the Consumer Federation of America (CFA), the average annual cost of homeowners' insurance in the US rose by 24% from 2021 to 2024, reaching $3,303. Some states, such as Florida, Louisiana, Oklahoma, Kentucky, and Nebraska, have experienced even higher increases, with premiums rising by nearly 30% during the same period.
The increase in homeowners' insurance rates has been driven by a combination of factors. One significant factor is the increase in the number and severity of severe weather events, leading to a spike in claims due to damage caused by factors such as theft, fire, and weather damage. Additionally, the increased cost of labour and construction materials has contributed to the rising cost of repairing or rebuilding homes.
It is important to note that insurance rate increases are subject to review and approval by state regulators. In the case of North Carolina, the Department of Insurance and the Rate Bureau were able to reach a settlement that balanced the interests of consumers and insurance companies. This process helps ensure that rate increases are reasonable and justified, protecting consumers from excessive hikes while recognising the need for insurance companies to adjust rates based on changing conditions and risks.
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In 2025, insurance companies requested a 22.6% increase in automobile insurance rates
In 2025, North Carolina insurance companies requested a statewide average increase of 22.6% in automobile insurance rates. This request was made by the North Carolina Rate Bureau, which represents automobile insurance companies in the state. The proposed increase in insurance rates would take effect on October 1, 2025.
State law mandates that the Commissioner of Insurance, Mike Causey, review the rate request within 60 days to determine if the increase is justified based on the submitted data. If Commissioner Causey disagrees with the requested increase, he can negotiate a settlement or call for a hearing. Past automobile rate filings have resulted in settlements. However, if the case proceeds to a hearing, a hearing officer will make a ruling on the request.
It is important to note that this 22.6% rate filing follows a similar request made in February 2023, where insurance companies sought a statewide average increase of 28.4% in automobile insurance rates. Additionally, in 2024, the North Carolina Rate Bureau requested a 42.2% increase in homeowners' insurance rates, which was eventually negotiated down to a 7.5% increase in 2025 and another 7.5% increase in 2026.
The proposed increases in insurance rates have sparked concerns among North Carolina residents, with some experiencing significant hikes in their insurance premiums. These changes in insurance rates are influenced by various factors, including repair costs, home values, and the increasing frequency and cost of natural disasters.
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Frequently asked questions
Yes, North Carolina has had multiple insurance increases across various types of insurance.
There have been insurance increases in North Carolina across homeowners' insurance, automobile insurance, and Mobile Home Fire (MH-F) and Mobile Home Casualty (MH-C) insurance.
The insurance increases in North Carolina were caused by a variety of factors, including increased repair costs, home values, and natural disaster recovery costs. Additionally, insurance companies requested rate increases, which were negotiated and agreed upon by the North Carolina Rate Bureau and the Department of Insurance.
The insurance rate increases in North Carolina have varied across different types of insurance. For homeowners' insurance, there was an average increase of 7.5% on June 1, 2025, with some individuals experiencing increases of up to 41%. For automobile insurance, there was an average statewide increase of 5% at one point, with insurance companies requesting a 22.6% increase at another time. For MH-F policies, there was an 11% average increase, while MH-C policies saw an 8% average increase.
