Homeowners in the Wilmington region will start paying more for their homeowners' insurance after state officials negotiated lower rate hikes than insurance companies asked for last year.

The negotiated rate increases for homes in the New Hanover, Brunswick and Pender county beach areas are 16% as of June 1 this year and 15.9% next year. The eastern parts of the tri-county region received 10% increases while the rates in the western areas will jump by 5% in 2025.

State officials have been touting the fact that the increase could have been worse, especially in the Wilmington area. For example, the N.C. Rate Bureau had asked for a 99.4% jump at area beaches in the tri-county region. The rate bureau represents homeowners’ insurance companies in North Carolina.

Insurance Commissioner Mike Causey announced the settlement Friday, marking an end to the N.C. Department of Insurance's (NCDOI) legal dispute with insurance companies over the proposed rate increases, filed in Jan. 2024.​

In a news release about the settlement, Causey acknowledged the reasons behind rate increases, stating that the negotiated rates "are sufficient to make sure that insurance companies, who have paid out large sums due to natural disasters and face increasing reinsurance costs due to national catastrophes, have adequate funds on hand to pay claims."

Critics of the rate bureau don't see much cause for celebration.

"The overall process remains frustrating and opaque," said Tyler Newman, president and CEO of the business advocacy organization Business Alliance for a Sound Economy, headquartered in Wilmington. "Does the N.C. Rate Bureau lead to statewide equity in rates? How can you set statewide rates when the western part of the state is still quantifying losses and cleaning up from Helene?"

Newman said in an email that the ideal scenario would be the legislature taking "a hard look" at the issue.

"Could we do away with the rate bureau and open the market to competition? Coastal homeowners just got a potential 4-10% increase, depending on area code. They already pay 3-4 (times) for a similar inland homeowners' policy — and then also have to have wind and flood coverage – where rates are also increasing," Newman said. "When we talk about housing affordability issues in our region, these constant unchecked incremental insurance increases are having a significant impact."

In the NCDOI release, Causey took credit for an outcome that could have resulted in much higher rates. “I fought for consumers and knocked them back to [an average of] 7.5% increases over two years with a maximum of 35% in any territory," he stated. "We consider this settlement a big win for both homeowners and North Carolina.”

According to the release, the agreement prohibits the rate bureau from trying to increase rates again before June 1, 2027.

Causey said, “North Carolina homeowners will save approximately $777 million in insurance premiums over the next two years compared to what the insurance companies requested. This also protects homeowners from future base rate increase requests until June 2027."

A local insurance firm weighed in on the news.

"We are grateful that Commissioner Causey and his team at the DOI were able to advocate on behalf of NC homeowners.  Of course, we’re also happy that they settled on the lower end of the proposed increases," stated Jared Cranford,
director of personal lines and agency sales leader management at Wells Insurance, in an email Monday.

He said the statewide average rate increase will be 15% over the next two years, but "homeowners in eastern parts of the state should understand that their individual rate may be considerably higher based on where their home is located, as well as other factors. It’s imperative that policyholders take an active role with their insurance agent to understand all the variables involved."