Recent news coverage around the struggles facing multifamily real estate owners centers on rent moratoriums, which were extended to June 30, 2021. These are proving to be a significant risk to the industry even with rental assistance. However, there’s another more subtle threat that is also eating away at profitability: rising insurance costs.
Premiums for the multifamily sector for both property and liability insurance have not only increased more than any other real estate market, but they have also risen at rates (10%-40% for the past two years) that haven’t been seen in more than a decade. In addition, insurance carriers are shifting the liability risk to apartment owners by asking them to carry more of the financial exposure by dramatically increasing deductibles and self-insurance limits. In the insurance industry, rates have been trending upward for a few years now, and most industry experts expect these trends to continue in 2021.
Read the full article: Skyrocketing Property Insurance Costs: How To Mitigate Your Risks
