Just two weeks ago, wildfires tore through Los Angeles, reducing thousands of homes to ash and forcing mass evacuations. As insurers now pull out of high-risk areas, many Californians find themselves unable to afford coverage — some going without any at all.
The same crisis is unfolding in North Carolina. Last semester, unprecedented ocean heat contributed to the formation of Hurricane Helene, unleashing catastrophic flooding across western North Carolina. The storm resulted in over 100 casualties, wiped out infrastructure and left entire communities struggling to recover. With climate-driven disasters worsening and private insurers withdrawing from vulnerable regions, North Carolina must act with urgency. The state must incentivize resilient home construction and reform its insurance market before the next disaster strikes.
Following California's trends, private insurers in North Carolina are withdrawing from high-risk regions and otherwise drastically increasing premiums.Many homeowners struggle to find affordable coverage, while others face policy cancellations with few alternatives. Those who secure insurance are often subject to North Carolina’s "Consent to Rate" loophole, which allows insurers to charge up to 250 percent of the state’s regulated rate with policyholder approval. While this measure offers insurers flexibility, it does little to keep coverage affordable. Even with this provision, some areas like the Outer Banks are now deemed too risky, leaving residents with few options.
And as private insurers withdraw, the state relies on safety nets like the FAIR Plan and Coastal Property Insurance Pool, last-resort options for homeowners who can’t secure private coverage. But their financial capacity is dwarfed by disaster losses, and now the question isn’t just whether these plans can cover claims in the next disaster — it’s how long they can remain solvent before rising premiums render them unsustainable.
One alternative is expanding federal disaster insurance programs, following the National Flood Insurance Program model. Extending federally backed coverage to include wind and wildfire damage could create more predictable coverage options, but the NFIP itself is in financial distress. Chronic underpricing has left it requiring periodic federal bailouts. Without major reforms to how risk is priced and shared, simply expanding the program won’t solve North Carolina’s deepening crisis.
Insurance may provide financial protection, but true resilience starts with stronger homes. While states like Florida and Alabama have implemented strict construction standards and grants for disaster-resistant upgrades, North Carolina has yet to make similar sweeping changes.
One successful program underway in the state is the North Carolina Insurance Underwriters Association initiative, which provides up to $10,000 in grants for coastal homeowners to install hurricane-fortified roofs. These roofs reduce damage likelihood and lower reinsurance costs, leading to reduced premiums for homeowners. It’s a rare example of an incentive program that aligns reinsurers, insurers and, most importantly, homeowners.
Without bold policy changes, North Carolina's insurance market will continue to spiral, leaving homeowners with fewer and costlier options. In the worst case, insurance could become entirely unavailable in some regions, forcing homeowners to bear the full financial burden of disaster recovery.
While stronger insurance protections and resilient infrastructure can help mitigate financial and physical losses, they don’t address the root cause of worsening disasters — climate change itself. Without action to slow warming, hurricanes, flooding, winds and wildfires will only intensify, pushing insurance and communities past their breaking point. Strengthening North Carolina's response to natural hazards requires both immediate adaptation and long-term strategies to reduce carbon emissions.
