Multifamily industry grapples with surging insurance costs in wake of climate risks

Short Summary: 

• Rising property insurance premiums are becoming a significant challenge for multifamily property operators, adding to the high costs of construction and financing.
• A recent National Multifamily Housing Council survey revealed a 26% increase in property insurance costs over the past year.
• These higher premiums are likely to be passed on to tenants, especially in income-restricted housing markets where options to offset costs are limited.
• Insurance carriers have also become more selective, reducing coverage and increasing deductibles, which is impacting property valuations and disrupting transactions.
• The situation is particularly dire in high-risk states like Florida, where insurance capacity is low, and costs are high.

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