The NC Insurance Underwriting Association's coastal property manual has a rule that rarely makes it into a vacation-home budget. A property that sits vacant or unoccupied for more than 60 days is generally ineligible for coverage unless an exception is accepted. For rental buildings, having 65% or more of the units unoccupied is listed as a possible reason to reject an application. The association is better known as the Beach Plan, and it is the main insurer for non-owner-occupied coastal homes in North Carolina. So that rule shapes what a second home on Wrightsville Beach costs to own as much as any rate change does.
That is the main point of this post. On the island, how you use the house decides which policy form you buy, which state rate case sets its price, which calendar that price moves on, and which eligibility rules you have to meet. Two of those calendars changed this year, four months apart, and they moved in different directions.
Occupancy Picks the Policy Before the House Does
North Carolina puts residential property into two insurance categories. Homeowners policies cover primary residences. Dwelling policies cover homes of up to four units that are not the owner's primary residence or are not owner-occupied, such as rentals and investment properties. Two identical cottages on the same street can end up in different rate cases depending only on whether the owner lives there.
Rates for both categories come from the N.C. Rate Bureau, which represents the state's insurance companies. It has to file its requests with the Department of Insurance and justify them before rates can change. North Carolina is one of only a few states that sets rates through a centralized bureau like this. Each policy category goes through its own filing, negotiation and settlement. That is why a primary residence and a second home on the island had different years in 2026.
Two Settlements, Two Schedules
| Homeowners policy (primary residence) | Dwelling policy (second home or rental) | |
|---|---|---|
| Settlement announced | January 17, 2025 | April 22, 2026 |
| What the Rate Bureau asked for | Up to 99.4% in Territory 120 beach areas | 68.3% statewide over two years |
| 2026 step | June 1, 2026 | October 1, 2026 |
| Size of the step | 7.5% statewide average; 15.9% in Territory 120 | 5% statewide average; in New Hanover, Brunswick and Pender, fire rates down 5% and extended coverage up 7.1% |
| Next step | No new increase effort allowed before June 1, 2027 | Another 5% statewide average on October 1, 2027 |
Territory 120 covers the beach areas of Brunswick, Carteret, New Hanover, Onslow and Pender counties. It took the largest homeowners increase of any territory in both years of that settlement: 16% in 2025 and 15.9% in 2026. So in 2026, the owner-occupied beach house got the larger percentage step.
For dwelling policies, the October change in the three-county area is a split. Extended coverage includes wind and hail, and it went up 7.1%. Fire rates went down 5%. On a barrier island, the wind and hail part is the one most second-home owners notice. These are changes to rate components, not a flat percentage on every bill. Final premiums are still set property by property.
As of early October 2026, the public filing indexes at the Department of Insurance and the Rate Bureau do not show a new homeowners rate request. The Rate Bureau does have a "2027 Homeowners Policy Program" taking effect June 1, 2027, but its circular describes policy-form and manual revisions, not a new territory rate increase.
Why the Beach Plan Sets the Price That Counts
The settlements set approved rates for the regular market. In practice, much of the coastal dwelling market isn't in the regular market. Jarred Chappell, the Rate Bureau's chief operating officer, described the problem to the Greater Wilmington Business Journal:
"These state insurance pools for customers who can't find coverage on the open market now cover 70% of the dwelling policy market in North Carolina."
He said carriers have become less willing to write dwelling policies, which pushes owners to the Beach Plan and the FAIR Plan. In his view, that shows the approved rates for regular carriers are too low. He also said final premiums are set property by property, based on each property's risk.
That puts the Beach Plan's own manual at the center for a Wrightsville Beach second home. Its Coastal Property Insurance Pool rates residential risks using the latest Rate Bureau manual rates, so the October settlement flows through to the pool. Its separate wind and hail rating plans are filed with the Insurance Commissioner. The manual defines the Beach Area as land south and east of the inland waterway. In the Beach territories, the pool offers both Dwelling Fire and Dwelling Windstorm and Hail coverage. Some owners pair a regular carrier's policy with a wind-only policy from the pool. In that case, the underlying policy has to come from an admitted carrier, it must exclude wind and stay active, and the wind policy has to match it as closely as possible.
This is where the vacancy and occupancy rules from the opening come in. The pool underwrites for value, condition, use and other risk factors. If a house will sit empty for long stretches, or a multi-unit building will run below 65% occupancy, that use pattern needs to come up with an insurance agent before closing.
Confirm the Territory by Parcel
Rate territories don't line up neatly with zip codes. The Department of Insurance's homeowners table describes Territory 120 as beach areas. Zip code 28480 shows up in the separate zip list for Territory 140, the eastern coastal areas, where the 2026 homeowners step was 10.1%. Wrightsville Beach properties on either side of the waterway can fall under different rules. An insurance agent should confirm a specific parcel's territory before any rate figure goes into an offer budget.
What a Roof Upgrade Is Worth From October 1
The dwelling settlement also raised mitigation credits. The Department of Insurance's deputy director of communications told the Business Journal that roof mitigation credits went up across the board, typically by one or two percentage points, and can reach 15% or slightly higher. The Beach Plan's Dwelling Windstorm credit table, effective October 1, 2026, lists these Territory 120 credits on Coverage A:
- Total hip roof: 4.9%
- Hip roof plus opening protection: 9.7%
- FORTIFIED Roof-Hurricane, existing roof: 3.6%
- FORTIFIED Roof-Hurricane, new roof: 5.7%
- FORTIFIED Home-Hurricane-Silver, new roof: 12.6%
- FORTIFIED Home-Hurricane-Gold, new roof: 15.0%
- FORTIFIED for Safer Living: 17.4%
The spread is wide. A basic FORTIFIED Roof designation on a new roof is worth roughly a third of the Gold credit. When a listing says "fortified roof," ask which designation it holds and whether the certificate transfers. The evidence behind the credits comes from a 2023 study by North Carolina State University's Institute for Advanced Analytics. It found that homes with fortified roofs had 34.5% fewer reported claims and 22.7% less loss per building per storm.
There is also a grant program for this. The Beach Plan's Strengthen Your Roof program offers up to $10,000 to eligible, active Beach Plan dwelling and dwelling-wind policyholders in territories 110 and 120. Grants go out first-come, first-served until funding runs out. The application link is live, but the site doesn't post how much funding remains. Treat the grant as possible, not certain, when planning a re-roof.
Questions for an Insurance Agent During Due Diligence
- Will this property be written on a homeowners form or a dwelling form, based on how I plan to use it?
- Which rate territory is this parcel in?
- Is the current owner's coverage with a regular carrier, the Beach Plan, or a regular policy paired with a Beach Plan wind policy?
- How would my expected vacancy periods or rental occupancy fit the pool's eligibility rules?
- Does the roof hold an IBHS FORTIFIED designation, which level, and will the credit carry over to me?
- What happens to this quote at the October 1, 2027 dwelling step?
None of this replaces a quote from a licensed insurance agent, and nothing here is insurance or financial advice. It does belong early in a second-home or rental purchase, ideally before the due diligence period ends.
Quick Answers
Did my primary-residence policy change on October 1? No. The October 2026 settlement covers dwelling policies only. Homeowners policies for primary residences aren't affected by it.
Is another dwelling increase scheduled? Yes. The second 5% statewide-average step takes effect October 1, 2027, and it will vary by territory.
Can an LLC buy Beach Plan coverage on a rental? The manual says any person or entity with an insurable interest may apply for an eligible property in the Beach or Coastal Area, subject to underwriting standards.
If you're weighing a second home or rental on Wrightsville Beach, The Waller Team can help you get the policy form, territory and roof questions answered with your insurance agent before your due diligence period ends. If you already own on the island and want to know how this fall's rate changes and roof credits could factor into a sale, request a free home valuation and we'll go through it with you.
