September 9, 2025
North Carolina homeowners face rising insurance costs shaped by coastal risks, strict state regulation, and recent negotiated rate hikes. Here’s how to navigate coverage in 2025.
North Carolina's homeowners insurance market presents unique complexities that set it apart from other states, driven by state-regulated pricing, coastal wind exposure, and recent significant rate negotiations. As property values rise and weather risks intensify, North Carolina homeowners face a challenging landscape that requires careful navigation and strategic decision-making.
After a contentious year-long battle, North Carolina Insurance Commissioner Mike Causey reached a settlement in January 2025 that will increase homeowners insurance rates by 7.5% on June 1, 2025, and another 7.5% on June 1, 2026. This agreement came after the North Carolina Rate Bureau originally requested a staggering 42.2% average increase, with some coastal areas facing proposed increases of up to 99.4%.
The settlement announcement represents a significant compromise from the insurance industry's initial demands. By mid-2026, North Carolina homeowners will see base rates increase by approximately 15% total, a substantial reduction from what insurers originally sought but still reflecting the mounting pressures facing the industry.
Unlike many states where insurers can freely set pricing, North Carolina operates under a highly regulated system managed by the North Carolina Rate Bureau (NCRB). This state oversight means that carriers cannot freely set pricing, creating a market structure that both protects consumers from extreme rate volatility while sometimes limiting insurers' ability to adequately price for risk.
The regulated system has led to an increasing reliance on "consent to rate" policies, which allow insurers to charge up to 250% of bureau rates for higher-risk properties. Since the law change, the percentage of home insurance policies in North Carolina that are consent to rate went from approximately 41% in 2018 to 55% in 2024. This means more than half of North Carolina homeowners are now paying premiums significantly above the state-regulated base rates.
North Carolina's extensive coastline creates particular complications for homeowners insurance, especially in the state's 18 designated Tier 1 coastal counties. Many carriers exclude wind/hail coverage in coastal regions, forcing property owners to seek separate coverage through the North Carolina Insurance Underwriting Association (NCIUA), also known as the Coastal Property Insurance Pool.
The NCIUA acts as a market of last resort for homeowners in coastal North Carolina who can't find wind and hail coverage included in a standard policy. For properties in eligible coastal counties, this separate wind and hail policy becomes important, as standard homeowners policies may exclude windstorm coverage, leaving homes exposed to hurricane damage.
The 18 eligible coastal counties for NCIUA coverage include Beaufort, Brunswick, Camden, Carteret, Chowan, Craven, Currituck, Dare, Hyde, Jones, New Hanover, Onslow, Pamlico, Pasquotank, Pender, Perquimans, Tyrrell, and Washington. Standard wind insurance typically covers up to $750,000 through the NCIUA, with excess wind insurance needed for higher-value homes.
North Carolina homeowners should be particularly aware of named storm deductibles, which typically apply to loss caused by windstorm or hail during the period beginning when an advisory, watch or warning for a "named storm" is issued by the National Weather Service. These deductibles are typically percentage-based rather than fixed dollar amounts, meaning a 2% named storm deductible on a $300,000 home would require the homeowner to pay $6,000 out of pocket before coverage kicks in.
Standard homeowners policies exclude flood damage, making separate flood insurance important for many North Carolina properties. The National Flood Insurance Program provides federally-backed coverage, while private flood insurance options have expanded in recent years. Given North Carolina's mix of coastal and inland flood risk, many homeowners—especially in FEMA-identified flood zones—should evaluate their need for flood insurance.
North Carolina's aging infrastructure and severe weather patterns make certain policy endorsements particularly valuable:
North Carolina maintains two important safety net programs for hard-to-insure properties:
NCIUA (Coastal Property Insurance Pool) - Provides wind and hail coverage for properties in the 18 eligible coastal counties when standard market coverage is unavailable.
NCJUA (FAIR Plan) - Offers full peril commercial fire and dwelling fire coverage throughout North Carolina excluding the beach area, serving as a "Market of Last Resort" for properties that cannot obtain coverage in the standard market.
The average cost of homeowners insurance in North Carolina is $2,352 per year, or about $196 a month, for $300,000 in dwelling coverage, though individual rates vary significantly based on location, property characteristics, and coverage selections. Some sources report higher averages of $3,383 annually for policies with $250,000 in dwelling coverage, reflecting the wide variation in risk levels across the state.
Coastal properties face substantially higher premiums, with Dare County seeing proposed rate increases that would result in base rates of $4,220 for beach areas and increases for inland coastal areas under the original industry proposal.
As North Carolina's insurance landscape becomes increasingly complex, servicers and lenders need reliable partners to help homeowners navigate coverage requirements and cost management. Covered is designed to streamline the insurance referral process and help improve customer support efficiency, based on partner-reported outcomes. By connecting borrowers directly with licensed insurance professionals who understand North Carolina's unique regulatory environment and coverage requirements, Covered aims to simplify the insurance shopping experience by offering access to licensed professionals familiar with North Carolina's unique market, helping to align the interests of both homeowners and lenders.
*Rates reflect average premiums for $250,000-$300,000 dwelling coverage and are based on 2024-2025 public data sources. Individual premiums may vary.
North Carolina's rates fall in the middle range compared to neighboring states, with Virginia offering the most affordable coverage and South Carolina commanding the highest premiums. Virginia homeowners pay an average of $1,840 annually, benefiting from lower catastrophic weather risk and stable market conditions. South Carolina's higher average of $2,708 reflects its greater coastal exposure and hurricane risk.
Rural properties may face additional underwriting scrutiny, particularly those using alternative heating sources like wood stoves. Mobile and manufactured homes often require specialized carriers or surplus lines coverage, as many standard insurers have restrictive underwriting guidelines for these property types.
The recent settlement provides temporary rate stability, but industry challenges remain. The North Carolina Rate Bureau stated that "storms have gotten stronger and more damaging, more people are living in disaster-prone areas, inflation in the construction industry has been particularly high and reinsurance costs have exploded".
The agreement prevents the Rate Bureau from seeking additional increases before June 1, 2027, providing homeowners with predictable rate progression through mid-decade. However, the Rate Bureau warned that "when the two years covered by this settlement are up, we will almost certainly be in a similar position, calling for a significant increase to keep the North Carolina market strong".
North Carolina's homeowners insurance market requires careful navigation of state regulations, coastal risks, and evolving rate structures. While the recent settlement provides near-term predictability, homeowners should remain proactive in understanding their coverage options and managing costs in an increasingly challenging environment. Working with knowledgeable agents can be an effective way to help evaluate options and improve understanding of complex coverage requirements, including last-resort markets when necessary, for adequate protection in the Tar Heel State.
This article provides general information about North Carlolina’s homeowners insurance market based on available industry data as of 2025. Individual circumstances vary significantly, and premium quotes, coverage options, and policy terms differ by insurance company. Consumers should consult with licensed insurance professionals for specific coverage recommendations and current pricing. Information presented should not be considered as guaranteed outcomes or personalized insurance advice.
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*Savings claim based upon averaging actual anonymized savings data for dwelling-only insurance rates paid (from July 2023 - June 2024) by customers of two of Covered’s largest mortgage industry partners across twenty-seven (27) US states. Bundles and non-dwelling insurance coverages were excluded.
† Net Promoter Score (“NPS”)® calculation averages post-purchase customer satisfaction surveys from 9/24/2024 - 2/28/2025. NPS® is a market research metric measuring customer satisfaction with a scoring calculation that incorporates both detractor and promoter customer feedback.
Quotes are presented solely for your convenience. Savings may vary. Rates are subject to change based upon the specific coverage you select and other factors that apply to your situation. CA License #0M81402, doing business as Cubbard Insurance Solutions in California.
