Home Insurance Costs for Beach Houses Could Soon Double in This State
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If a new industry filing is approved, rates for home insurance in North Carolina could shoot up 42.2% on average, which would be among the steepest recent hikes in the U.S.
The rate hikes — as high as 99.4% for some coastal areas — were proposed by the Rate Bureau in North Carolina, and the state’s Department of Insurance has until early February to review them.
The battle over insurance rates in North Carolina is emblematic of what’s happening all over the country, especially in areas where there's increased risk of severe storms, flooding or wildfires. The national average annual cost of home insurance is now $1,754, and experts are forecasting home insurance prices could see double-digit increases in 2024. Homeowners insurance prices are currently lower than that in North Carolina, averaging $1,330, according to insurance marketplace Policygenius.
In North Carolina, residents are pushing back on the proposed insurance rates, saying they would cripple homeowners' budgets. Hundreds of people joined a feedback session Monday, where they spoke out against the push for higher rates.
A retired woman in Wake County said she or her husband would have to take extra work if the proposed home insurance rates go into effect, according to CBS 17. A resident of Surf City, where rates would essentially double, told WECT 6 she would be forced to move: “Please don’t take my home,” she said.
North Carolina Insurance Commissioner Mike Causey says he’s listening to the concerns of residents and pledges to make sure that any rate increases are fair. In a video message commenting on the proposed 42% figure, Causey reassured his worried constituents: “I know that number may sound shocking at first, but as your insurance commissioner, I am committed to fighting for lower rates for you, the consumer," he said.
Home insurance companies leave states or request rate increases
While insurers are pushing for higher rates across the country, some home insurers have pulled away from writing policies entirely in states like Florida. The availability of home insurance is also limited in two other coastal states in the southeast: South Carolina and Georgia, according to insurance firm Matic.
North Carolina insurers note that there hasn’t been a rate increase since 2020, when an 8% hike was enacted. Since then, construction costs including materials and labor have gotten much more expensive. Costs for covering claims as well as reinsurance for catastrophes have also soared.
The insurance industry argues that rate increases are needed to account for higher claims costs and restore profitability margins for insurance companies.
In California, regulators are reviewing a request from Allstate for a 39.6% rate hike. In Florida, home insurance premiums increased by an average of 35% at renewal during the period from May 2022 to May 2023. Meanwhile, Farmers was approved for homeowners insurance rate increases of more than 25% in Illinois and Texas last year.
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