Homeowner insurance rates to rise by 25 percent on N.C. coast

RALEIGH, N.C. - Homeowner insurance premiums will rise by 25 percent along the coast this year as a result of the rising cost of homes, higher repair costs and a recent history of severe damage from storms, state Insurance Commissioner Jim Long said.

The new rates, which take effect May 1, are the result of a settlement between the insurance industry and the state Department of Insurance.

The average premium increase on home insurance statewide is 5.4 percent, far below the 21.9 percent jump sought by insurers. Rates are set by region, based on the number and type of claims and repair costs in each area.

Those who rent out their beach houses will have to cover the higher insurance costs, said Alan Holden, who owns a property management company and RE/MAX at the Beach in Holden Beach.

"The owners are going to pass it on," he said. "I'm in shock by such an increase. Having just gone through a recent increase, it makes you wonder where it is going to stop."

The last rate increase was in 2005, when rates along the coast jumped 15 percent.

The last storm to hit the coast was Hurricane Ophelia in 2005, which caused more than $40 million dollars in damage.