Hurricane Ida Damage Depreciation Suit Tossed
A Louisiana federal court dismissed a proposed class action from two homeowners attacking the depreciation method GeoVera Specialty Insurance Co. used over their Hurricane Ida property damage claims, noting the homeowners previously sued the insurer over related claims and settled thereafter. Decision attached | Read full article » | Save to favorites » Hyundai, Kia Drivers Get Green Light On $145M Car Theft Deal By Gina Kim A California federal judge said Monday he will preliminarily approve a $145 million settlement resolving claims by Hyundai and Kia drivers who alleged they suffered losses arising from design flaws that led to car thefts from a method popularized on TikTok and other social media platforms. 1 document attached | Read full article » | Save to favorites » Unit Exclusion Too Vague To Bar Coverage, Contractor Says By Riley Murdock A Florida general contractor is urging a federal court not to hand Nautilus Insurance Co. an early win in the insurer’s bid to escape coverage for a more than $1 million faulty construction dispute, arguing that an exclusion in the policies is too vague to apply. Response attached | Read full article » | Save to favorites » Insurer Must Defend Faulty Construction Suit, Contractor Says By Elizabeth Daley A contractor is taking its insurer on in Florida federal court, seeking coverage for over $104 million in underlying litigation from a retail center and others accusing it of defective construction in a $1.05 billion Miami mixed-use development. Complaint attached | Read full article » | Save to favorites »
Property insurance rates to keep surging in 2023
Commercial property insurance buyers can expect further rate hikes this year due to a confluence of factors, with catastrophe-exposed and loss-hit accounts bearing the brunt of tightening capacity and increases of 25% and higher. A difficult Jan. 1 reinsurance renewal season, in which property insurers faced capacity limitations and significant rate hikes, has added uncertainty in a market already hit by Hurricane Ian and other catastrophe losses and inflation, market experts say. Property catastrophe reinsurance rates for loss-hit U.S. accounts jumped between 45% and 100% at Jan. 1 renewals, according to a Gallagher Re report issued last week. What the knock-on effect will be for property insurance policyholders this year remains unclear, brokers said. More challenging reinsurance treaty renewals and insurer and reinsurer concerns over property cat exposures and their cost of capital are driving current market conditions, said Rick Miller, Boston-based U.S. property practice leader at Aon PLC’s commercial risk solutions business. “It’s a bifurcated market between natural catastrophe-exposed and non-catastrophe-exposed business,” Mr. Miller said. Accounts with significant wind exposures, especially in the Southeast, are “extremely challenging,” he said. At year-end renewals, some large accounts with Florida exposures bought lower limits than they had bought previously because of cost concerns, Mr. Miller said. “We were still able to put together significant limit on some Florida deals, but it was much more challenging,” he said. The fourth quarter of 2022 was the 20th consecutive quarter of increasing rates, based on Aon data, which is “unprecedented in recent history,” he said. Capacity is the biggest challenge, said Jeff Buyze, Fort Lauderdale, Florida-based vice president, national property practice leader at USI Insurance Services LLC. “When an incumbent carrier pulls back in the current line that they’re providing – let’s say they were providing $100 million the year before, and now they can only provide, say, $5 million or $10 million – that’s where we’re seeing the largest rate increases, and the most difficult renewals,” Mr. Buyze said. The reduction in capacity is not just affecting catastrophe-exposed accounts, Mr. Buyze said. Accounts with a challenging loss history, poor risk quality – such as older frame construction – and with outstanding loss control recommendations, are seeing “the most pressure, and the most difficulty when it comes to capacity and rates,” he said. “Traditionally, in this type of market, you would see new entrants … but the capital itself isn’t finding its way to the reinsurance or the insurance market,” and this cycle is likely to continue at least in the first six to 10 months of 2023, he said. Interest in captives and parametric coverages is increasing, he added. Catastrophe-exposed property and non-catastrophe-exposed property with poor loss history or poor risk quality will continue to see rate increases of 25% up to 150% in the first half of 2023, unchanged from the end of 2022, USI said in a report issued last week. Catastrophe-exposed property with minimal loss history and good risk quality will see rate increases of between 15% and 50%, while property in non-catastrophic regions with minimal loss history will see rates up 5% to 10%, USI said. Insurers varied in their quoting at year-end renewals, driven by the characteristics of the risk and specific geography, said Michael Rouse, New York-based U.S. property practice leader at Marsh LLC. “Without a doubt, the windstorm, hurricane-exposed states like Florida and Louisiana continue to be a struggle, both from a capacity standpoint and pricing, as well as terms and conditions,” Mr. Rouse said. For some larger property schedules, there were still higher rates and tighter terms and conditions but a more competitive marketplace, he said. “Outside Florida, prices rose but not necessarily close to the same degree. In some instances, you could move from carrier A to carrier B to help mitigate rates,” he said. In some cases, policyholders are struggling to buy limits that they have historically, Mr. Rouse said. High-quality accounts with good loss control that are properly valued, loss-free and not exposed to catastrophes are seeing either flat rates or perhaps slight decreases or slight increases, said Peter Fallon, national property practice leader at brokerage Risk Strategies Co. Inc. in Boston. Accounts where property valuations don’t accurately reflect the risk, that have had losses or are in catastrophe-exposed locations are getting hit hard, he said. Following Jan. 1 reinsurance renewals, underwriters have many questions over how reinsurance changes will affect their own business, he said. “If the reinsurers are asking for more money and making changes in terms of coverage and limits, how’s that now going to make its way down to the individual insurance companies and then their clients?” Mr. Fallon said. There’s still a lot of uncertainty in the market, and recent feedback from insurers suggests that prices will increase even if capacity stays the same, said Christie Weinstein, New York-based director, risk management, at Honeywell International Inc. and a Risk & Insurance Management Society Inc. board director. Honeywell’s property insurance program renews in May. “As pricing goes up risk managers are relying more on brokers to find different strategic approaches to managing risk versus true risk transfer,” Ms. Weinstein said. “Maybe you can restrict coverage or play with the way the coverage or limits are addressed or sublimit specific coverages, instead of taking a broad-brushed, larger retention,” Ms. Weinstein said. Conversations with clients are changing and there is greater focus on analytics, said Kathy Bettencourt, New York-based Northeast property broking leader at Willis Towers Watson PLC. After multiple years of rate increases, many policyholders are reevaluating how much coverage they need, and whether they should continue transferring risk or start looking at risk financing, Ms. Bettencourt said. In terms of overall limits “we’re seeing our clients start to buy less, because they’re taking the time to evaluate what they really need,” she said.
Navigating the unpredictable: Key trends in catastrophe claims
How are adjusters responding to current challenges presented by natural catastrophe claims? As the frequency and severity of natural catastrophe (CAT) events increase, a new normal is transforming both the standard CAT season and the loss-adjusting industry. But what trends are impacting CAT claims, and how are adjusters responding? Catastrophe (CAT) seasons are increasingly complex to navigate, especially with the surge of non-stop rain and freeze events outside these pivotal periods. What was once a predominately hurricane-focused season has now diversified into more regular, regional weather-related perils, such as windstorms, massive snowfalls and freezing conditions. From the floods in New Zealand this year to the winter storms in Texas, the type and scope of incidents we manage globally are challenging the historical focus on the North Atlantic hurricane season. In the United States, we typically mark the CAT season from June 1 to November 1, often preparing for hurricane events. However, the last five years have seen a significant shift in this pattern, with an influx of wind claims, flood losses and extraordinary snowfall over the year. How to more accurately manage risk with geolocation data Having accurate, up-to-date geolocation data is more critical than ever as property risk shifts to reflect a changing climate. Armed with verified address data, precise geocodes, and a wealth of hazard data, insurers can underwrite faster, more accurately, and with improved pricing. Real estate professionals know the value of “location, location, location,” and so do property insurers. That’s because calculating property risk is dependent on location information — geolocation data. Insurers can underwrite the optimum policy more easily by using high-quality geolocation data.
US P&C market headed for a stronger 2024
Insights from Swiss Re’s latest sigma research suggest that 2023 will represent a transitional phase for US P&C industry profitability. The trajectory is expected to shift from a challenging 2022 to a more robust 2024, underpinned by improvements driven by higher premiums and increased interest rates. However, the industry has not yet experienced the inflection point between premium growth rates and claims costs, according to the report. While there have been strong and accelerating rate increases in personal lines and a persistent hard market in commercial property, these have been counterbalanced by challenges such as the costliest second quarter for natural catastrophes since 2011, persistent inflation, and a slowdown in favorable reserve development. Notably, underwriting losses reached $22 billion in H1 2023, resulting in net income of just $2 billion despite higher investment earnings. Adjustments have been made to the 2023 ROE estimate, lowered to 6.5% from 8.0%, while the premium growth estimate has been raised to 9.0% from 7.5%. The industry has been significantly impacted by natural catastrophe losses and persistent inflation, leading to an underwriting loss of $22 billion in H1 2023. Premium growth continues to be strong, although the momentum has tilted towards personal lines. In commercial lines, robust growth in property is mitigated by weak or negative growth in liability lines. The estimated premium growth has been adjusted to 9% from 7.5% in 2023, and an expectation of 5.5% in 2024 is maintained. However, despite the strong premium growth, net income in H1 2023 was only $2 billion, prompting a revision of the industry ROE forecast to 6.5% from 8% in 2023, while maintaining the forecast at 9.5% for 2024. Profitability in the US P&C segment The report also noted that profitability in the industry is expected to witness a decline in the 2023 ROE due to an active H1 for catastrophes. The industry ROE for 2023 is estimated at 6.5%, down from the previous estimate of 8%, while it is maintained at 9.5% for 2024. While this year represents a significant improvement over 2022 (ROE: 2.4%), thanks to higher investment returns enhancing insurers’ profitability, elevated catastrophe activity is impacting underwriting results. Notably, severe convective storm claims in 1H23 amounted to $34 billion, resulting in an estimated $16 billion in extra claims costs, with a higher share retained in net results. An underwriting loss of $22 billion was experienced, partially offset by a 28% year-on-year increase in net investment income. The first-half net income stood at just $2 billion. As the industry enters the second half of 2023, traditionally the peak hurricane season, a major claims event is not anticipated, which is expected to result in stronger underwriting results. It is anticipated that H2 2023 will see improved underwriting results as the sharpest inflationary impact on loss costs recedes and gains from higher interest rates accrue. Earnings calls in Q2 2023 indicated that personal lines rate increases will be higher than initially expected. US P&C underwriting outlook In the realm of underwriting, the industry is witnessing an increase in the combined ratio forecast for 2023, revised to 102%. The industry net combined ratio surged to 107.3% in Q2 2023, with natural catastrophes adding 11.8 percentage points, well above the 10-year average of 6.3%. Inflation continues to raise claims severities across property lines. Year-to-date, the personal lines loss ratio was nearly 23ppts higher than commercial lines, as catastrophes affected homeowners more than commercial policies. It is anticipated that loss severities will ease as average US headline CPI inflation decelerates to the forecasted 4% in 2023 and 2.5% in 2024, setting the stage for improved underwriting results as rate gains eventually outpace claims costs. Loss costs in the property sector have surged, Swiss Re noted. In H1 2023, homeowners and commercial property claims costs increased by 36% and 30% respectively year-on-year, driven up by inflation and natural catastrophe losses, delaying the overall industry’s profitability improvement. The homeowners loss ratio is up by 15ppts from 1H22, to over 82% – the highest in 1H for over a decade. This situation has led to insurers restricting business in catastrophe-prone markets, with the availability and affordability of insurance gaining attention. In California, for example, there is an estimated 20% less availability for insurance options than a year ago. Moreover, more homeowners are choosing to go without insurance, with only about 88% insured today, compared to up to 95% a few years ago. On the flip side, Swiss Re highlighted the fact that the worst seems to be over for personal auto. The line’s 112% combined ratio in 2022 was the highest since at least 1975, and the loss ratio remains elevated in 2023, suggesting a path to profitability is yet to be achieved. However, in Q2 2023, growth in direct premiums earned kept pace with loss costs for the first time in more than two years. It is expected that this trend will continue, with rate increases expected to exceed most indicators of claims severities. Pricing, growth, and investment – what to expect In terms of pricing, commercial lines rate trends are diverging. Average rates for commercial lines increased by 8.9% year-on-year in Q2 2023, slightly faster than the 8.3% gain in Q1 2023. Property rate gains remain strong but decelerated slightly, rising by 20% after a 21% increase in Q1 2023. On the other hand, rate gain momentum in liability lines is significantly lower, remaining generally steady in the low to high single digits, except for D&O and cyber, where price gains are slowing. Overall, it is anticipated that rate increases will continue through 2023 as inflation and catastrophes put upward pressure on claims and operating costs. In terms of growth, personal lines are expected to drive growth in 2023. Both personal auto and homeowners’ premiums grew by double digits in H1 2023, contributing to strong P&C industry growth of 8.6%. Commercial lines’ growth rates are weakening overall and reflect rate trends: fire & allied lines grew by 17%, but this growth was offset by a 1% decrease in general liability premiums.
Can you ensure your major remodel project is a dream come true, rather than a nightmare waiting to happen?
October 20, 2023 – The home improvement industry is booming. In recent years, several factors have contributed to increased remodel activity. First, the COVID-19 pandemic caused many people to spend more time than ever in their homes, and remodeling to add workable office space or improve livability was suddenly more popular than ever. Pandemic costs and complications then contributed to inflation that drove mortgage rates upward. People with 2.875% fixed mortgages had no desire to sell their homes and borrow to buy a new one at 8%. So remodeling seemed more attractive than moving. Dealing with contractors and minimizing risk can be a full-time job, at least until the remodel is finished. And even when things go well, remodeling is itself an expensive and risky proposition for homeowners. When things go wrong, a worker can be seriously injured, or substantial property damage can happen. This article highlights a few remodel contract provisions that typically go unnoticed but can limit or impact insurance coverage and be critically important if something goes wrong during the remodel. A little advance planning can make unwanted surprises less likely and more manageable. Imagine a scenario where homeowners hire a contractor to perform a large remodel on their property. Before work starts, the owners review and sign the contract (which is provided by the contractor and has boilerplate language including an insurance provision). A few weeks into the project something goes terribly wrong — a pipe must have been broken during excavation and now the owners’ yard and pool house are sliding into the neighbor’s suddenly drenched backyard. The contractor’s liability insurance should cover the damage, right? It depends. There is a chance the homeowner’s own insurance may apply; or worse, the homeowner is personally on the hook. Who pays, and whether it is covered by insurance, may depend both on exactly what happened and what the remodel contract says. Example contract language Let’s start with a scenario where the Contract is presented as a “standard form” agreement with the following provisions: 3.1. The Contractor shall maintain general liability insurance for any injuries related to the Work. Contractor shall include the Owner as an additional insured for claims or damages caused by the act or omissions of the Contractor. 3.2. The Owner shall purchase and maintain adequate insurance to cover all Work. 3.3. The Owner and Contractor waive all rights against each other for damages caused by fire or other perils to the extent covered by other insurance applicable to the Work. After the property damage occurred to the homeowner’s house, the owner makes a claim with the Contractor’s general liability insurance. General Liability insurance typically covers bodily injury or property damage caused by an accident. However, in this scenario, the Contractor named the homeowner as an additional insured. The General Liability policy may exclude property damage to property owned by an insured. Accordingly, the Contractor’s insurer could deny coverage. If the neighbor sues for the damage to their yard, the owned property exclusion would not apply; so that’s at least some consolation. The homeowners may want to sue the Contractor for negligence. However, if the owner’s own insurance covers the damage to the yard and pool house, section 3.3 in the contract could take away the owners’ (and the owners’ insurer’s) right to sue the contractor. In the 1994 case, Lloyd’s Underwriters v. Craig & Rush, Inc., a California appellate court interpreted similar contract language as waiving the owner’s right to sue the contractor. The homeowners are left with no choice but to make a claim with their own homeowners insurance to cover the damages. Even if full property insurance coverage is available, (and this particular scenario raises possible exclusions, such as earth movement), this approach could force the homeowners to pay the deductible and potentially face higher future premiums or difficulty staying insured. Like the Contractor’s general liability insurance, the homeowners’ own liability insurance will probably exclude damage to property owned by an insured (and the homeowners really did nothing to cause the damage anyway). This may mean that only the neighbor’s damage is covered. To make matters worse, a contractor could argue that the homeowner breached the contract (provision 3.2) by failing to maintain proper insurance that adequately covered risks arising from the work. What happens if the contract says nothing about insurance? What if the contract reads as follows: 3.1 Owner shall hold harmless and indemnify Contractor against all claims arising out of Contractor’s work. Contractor is not responsible for any injury to persons or damage to property. In this scenario, there is no contractual duty for the Contractor to get any insurance. This agreement also appears to shift the risk of loss to the homeowners, making it more important than ever for the homeowners to have adequate insurance of their own. When something goes wrong in this scenario, the homeowners are likely to learn that they have no right to sue the contractor (which may not be adequately insured anyway). What about subcontractors? Something to consider when hiring a contractor is whether they will be hiring subcontractors to perform all or some of the work. This may impact the application of any insurance the parties obtain. A contractor may also forget to verify that these subcontractors are adequately insured. A contractual provision relating to subcontractors may read as follows: 3.4 Contractor may subcontract portions of this work to properly licensed and qualified subcontractors, who will be solely responsible for all aspects of the subcontracted work and any resulting loss or damage. This provision does not address insurance coverage. In the event of an injury or damage, the parties will be left to point the finger at each other, and their liability insurers may do the same thing. What a mess! How can you protect yourself? The first line of defense to avoid these unwanted surprises is to select properly licensed, qualified and insured contractors. Spot issues in the contract which may subject a homeowner to liability down the road. At
New report: Florida Property Insurance Premiums won’t drop
ORLANDO, Fla. — A new report shows a dooming outlook for Florida’s insurance crisis. Insurance premiums will likely not drop, and there’s little Florida lawmakers can do about it, according to a new report by Karen Clark and Co., a Boston-based risk assessment and management firm. This is because a Florida homeowner’s average insurance premium is triple the national average. The report lists factors that are driving rates to increase— beginning with construction costs. The average construction cost in Florida has increased nearly 40% since 2017. It continues to go up. Read: Florida homeowners with Citizens insurance to see double-digit rate hike “Reconstruction costs are not coming down anytime in the near future,” said Tom Cotton, Orlando insurance agent. Florida has seen three major hurricanes in the last five years— Michael, Ian, and Idalia. The report mentions scientific studies that point to an increase in major hurricanes and the intensity of the storms. The factors in the report driving premiums are out of Florida lawmakers’ control. Read: Citizens customers could see costly policy switch if they miss this important letter “I really don’t think there’s a lot more that they can do,” Cotton said. Cotton says legislation passed by lawmakers last session will help two years down the line. It aims to reduce frivolous and excessive lawsuit claims that were hiking up rates and pushing out insurers. “But that’s only going to impact about 40% of the rate-making equation,” Cotton said. “The legislature did what they did could to control the reinsurance component of the rate-making process. We will see that come down in the future. But if construction costs come down, then there will be a correlating, linear process, you’ll see a linear decrease. But I don’t see that happening in the near future.” Cotton says until then, Florida will see premiums increase. Read: What Florida’s property insurance rate hikes mean for deals, markets The report says the only ways to mitigate these impacts are retrofitting homes to withstand storms and putting more stringent building codes in place— something Cotton said is already stringent. “They’re particularly talking about along the coast. They’re talking about not letting you build a house where it could be impacted by erosion and tropical storms,” Cotton said, referencing conversations about solutions. This report comes days after some Florida lawmakers said they did not expect major property insurance legislation this upcoming session.
Is Property And Casualty Insurance A Good Career Path? What To Know
If you are an outgoing self-starter with an eye for detail, working as an agent for a property and casualty insurer may be a good career path. Insurance sales agents help customers understand insurance coverage, sift through plans and find the right fit. Sales agents usually specialize in a certain type of insurance, such as property and casualty, which covers losses to a business, individual or property. Read on to learn how to become a property and casualty insurance sales agent. Property and casualty insurers, such as Nationwide or Allstate, provide coverage in case of harm to an individual, a business or property. You may be familiar with some specialty insurance types, such as homeowners or renters insurance. Property and casualty insurance are typically bundled into one policy, but the terms refer to different things: Say someone falls and is injured on your property. You may be responsible for paying their medical bills, but an insurer can help cover that expense. Insurers can also reimburse you for damage from vandalism or natural disasters, depending on your policy. What Is a Property and Casualty Insurance Agent? Property and casualty insurers, such as Nationwide or Allstate, provide coverage in case of harm to an individual, a business or property. You may be familiar with some specialty insurance types, such as homeowners or renters insurance. Property and casualty insurance are typically bundled into one policy, but the terms refer to different things: Say someone falls and is injured on your property. You may be responsible for paying their medical bills, but an insurer can help cover that expense. Insurers can also reimburse you for damage from vandalism or natural disasters, depending on your policy. What Is a Property and Casualty Insurance Agent? Is working for a property and casualty insurer a good career path? It can be—especially for people pivoting in their careers or those without an advanced degree. This field has a low barrier to entry, but there are still some requirements to keep in mind. Education Most employers require at least a high school diploma and many require a bachelor’s degree in risk management, business or a relevant field. Applicants without a bachelor’s degree in a related field can gain skills by taking online classes in business, finance, economics, sales or public speaking. Work Experience You don’t need any prior experience to work as an insurance agent. You can learn on the job, and many interpersonal and communication skills are transferable to insurance sales. If you work at an insurance agency or firm, a more experienced agent may train you on policy details and sales tactics. Licensure Insurance sales agents must earn state licensure, but requirements vary. Research licensing requirements for the state where you want to practice. Property and casualty insurance agents are licensed separately from those selling health and life insurance. To become licensed, most states require you to complete courses and pass an exam. New York, for example, requires applicants to take a state-approved course with at least 90 hours of instruction. The licensure fee is $80, and agents must maintain their license through continued education courses, including ethics and insurance law. Salary and Job Outlook for Property and Casualty Insurance Agents Insurance sales agents make reliable salaries that vary depending on specialty. The U.S. Bureau of Labor Statistics (BLS) groups salary information for all insurance specialties together, including property and casualty insurance. Insurance sales agents made a median annual wage of $57,860 in May 2022, according to the BLS. This figure includes commission and bonuses. The top 10% of insurance sales agents made a median annual wage of $130,350, whereas the lowest 10% of earners made $31,530. Sales agents may have different income structures. Those employed by an agency may earn a salary plus commission or bonuses. Independent agents, however, might only earn a commission. Job Outlook The BLS predicts a 6% growth in this field from 2021 to 2031, which is on pace with the 5% expected growth across all occupations. The BLS expects demand for insurance agents to continue as they ensure profitability for insurance companies. However, independent sales agents should see the strongest employment growth. While insurance information is increasingly available online, customers still depend on agents’ expertise to navigate the market. Types of Property and Casualty Insurance Customers can find insurance coverage for almost any situation. These are some of the main specialties: 🏙️ Elevate Your Career with Skyscraper Insurance! 🌆 Are you a passionate P&C insurance professional looking for the perfect work-life balance, a thriving book of business, and exceptional profitability? Look no further, because Skyscraper Insurance is the answer you’ve been searching for! 🚀 ✨ Join the Skyscraper family and experience the following benefits:🌟 Work-Life Harmony: We understand the importance of balance in your life, and we provide the ideal environment to achieve it. 💼 Build a Healthy Book: At Skyscraper Insurance, we’re dedicated to helping you cultivate a thriving portfolio that’s as impressive as the skyline itself. 💰 Business Profitability: Our platform is designed to empower you to reach new heights of financial success and prosperity in the insurance industry. 🏛️ Strong Resources: We offer a wealth of resources to elevate your skills and bring the very best to your clients. 🏢 The Big Picture: Skyscraper Insurance is on a mission to create the most substantial platform across major U.S. cities, and you can be a part of this journey! 🌍 Join us in revolutionizing the Property and Casualty industry. Whether you’re a seasoned pro or an aspiring talent, reach out today! Send us a DM to schedule a consultation about your succession plan and discover how we can customize your path to success while boosting your bottom line. 📩 Let’s build the future of insurance together! 💪🔑 #SkyscraperInsurance#InsuranceProfessionals#WorkLifeBalance#PandCInsurance#SuccessionPlan#BusinessProfitability#CareerElevation#InsuranceResources#UnitedStates#JoinUsToday
Multifamily insurance rates are up as much as 28% Or More.
The average year-over-year hike was 13.6% and was worse in some places. As GlobeSt.com has previously reported, higher financing costs are not the only fiscal strain on CRE in general and multifamily specifically. Operating expenses have risen sharply and are unlikely to recede with a receding inflation tide. Prices will stay up. That’s bad news for many operators because the increases pare away at net operating income, which puts pressure on debt service coverage ratio. That makes lenders uncomfortable and can derail attempts to refinance. Trepp has been looking at where the biggest impacts on multifamily have been, like the metros facing the biggest property tax increases. And now they have another report on property insurance. “Trepp finds that the cost of property insurance increased roughly 13.6% on average across the 50 largest MSAs from 2021 to 2022, with a few key southern multifamily markets seeing particularly pronounced insurance expense growth,” the company said. Look at the top 15 multifamily and the bottom rate growth in 2022 was 15.1% in Charlotte-Concord-Gastonia, NC-SC, while the top in the nation, Miami-Fort Lauderdale-West Palm Beach, FL, saw 28.0%. It takes little prodding to see what might be driving expenses far behind the rapid increases. “The year 2021 witnessed record-breaking frequency and severity of natural disasters, such as hurricanes, floods, and wildfires,” Trepp wrote. “Consequently, property owners have faced heightened risks of climate-related property damage. In response to these escalating risks, insurers have found themselves compelled to reevaluate their policies and pricing models, leading to fluctuations in insurance premiums for properties. Our previous report on real estate taxes highlighted the booming nature of the multifamily market in certain growing MSAs. This trend may also further contribute to even higher insurance premiums for multifamily properties.” It could also be worse. State Farm in late May said it would “cease accepting new applications including all business and personal lines property and casualty insurance … due to historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market.” Allstate in November 2022 had announced that it was exiting commercial insurance in five states. Trepp took a closer look at Florida and Texas. Florida’s location makes it a natural target of tropical storms and hurricanes, “with the Miami, Jacksonville, and Tampa MSAs experiencing an average rise of 24.9% in insurance expenses from 2021 to 2022.” There were 21 named storms, outpacing the norm of 14. Building materials costs have escalated more than 31% between 2020 and 2022. And yet, people keep moving there. “Miami has the highest flood-risk score in the U.S., but there were 147 multifamily buildings totaling 36,414 units under construction in 2021,” Trepp wrote. “This construction volume represented 11.3% of the inventory in the Miami market, with the vacancy rate dropping to sub-5% in that period.” “The distinctive aspect of Texas’ weather lies in its extremes, with both scorching hot conditions and rare freezing temperatures impacting the region,” Trepp wrote. Whether the severe winter storm that devastated large swaths and took down power capability, with $9.3 billion payout, the April “Gorilla” hailstorm in the northern part of the state, or Hurricane Nicholas in September 2021, insurance companies started to bail out of the state. “In the short term, this rise can be attributed to inflation, at least in part,” wrote Trepp. “However, it is essential to recognize that extreme weather has played a crucial role in reshaping the insurance premium landscape in the past several years.” And an incoming wave of private capital might direct companies to focus on more profitable areas and leave higher risk ones.
The Leading Name in the p&C industry
Trust Skyscraper Insurance as your real estate insurance advisor Why Choose Skyscraper Insurance: Unmatched Expertise: Leaders in Real Estate Insurance Tailored Coverage: Customized Plans to Fit Your Property Portfolio Trusted by Professionals: Preferred Partner for Management and Investors Rapid Response: Quick Claims Processing and Outstanding Service Skyscraper Insurance is your ultimate partner for a wide range of property insurance needs. Whether you’re investing in multi-family garden-style properties, HUD properties, commercial buildings, portfolios, warehouse industrial properties, vacant land development sites, new or old construction projects, hotels, retail malls, and much more, we’ve got you covered. Our extensive expertise and tailored insurance solutions make us the go-to choice for property owners and investors across diverse real estate categories. Whatever property you have in mind, just list it, and we can design a customized insurance policy to protect your investment. At Skyscraper Insurance, we’re dedicated to delivering top-notch coverage, so you can invest with confidence. Your properties deserve the best, and that’s exactly what we provide. Trust Skyscraper Insurance as your real estate insurance advisor You deserve the best. We have a seat at the table when it comes to advising you on real estate insurance. #MultiFamilyProperties
Skyscraper Insurance – Can Safeguard Your Nationwide Multi-Family Properties
How Skyscraper Insurance Agency Can Safeguard Your Nationwide Multi-Family Properties When it comes to multi-family properties, whether you own a small apartment complex or a sprawling residential community, ensuring the right insurance coverage is vital. Every property has its unique set of risks and needs, and that’s where Skyscraper Insurance Agency shines. With a nationwide reach and a team of experts, they are your go-to partner for protecting your multi-family investments. A Wealth of Experience and Expertise Skyscraper Insurance Agency boasts a team with extensive experience in the multi-family property insurance sector. They understand the nuances and complexities involved in safeguarding these valuable assets. Whether you’re in bustling urban centers or serene suburban landscapes, their expertise ensures you get the tailored coverage your properties deserve. Nationwide Reach, Local Expertise One of the standout features of Skyscraper Insurance Agency is its nationwide reach. No matter where your multi-family properties are located, their team can provide you with expert advice and comprehensive insurance solutions. Their local knowledge combined with a national presence means you’re always working with professionals who understand the specific risks associated with your region. Customized Coverage for Your Unique Needs Multi-family properties come in all shapes and sizes, each with its own set of challenges and opportunities. Skyscraper Insurance Agency doesn’t believe in one-size-fits-all solutions. Instead, they work closely with you to understand the unique needs of your properties. Whether it’s protecting against property damage, liability claims, or loss of rental income, they customize a policy that aligns perfectly with your requirements. Risk Mitigation and Protection Beyond insurance coverage, Skyscraper Insurance Agency goes the extra mile to help you mitigate risks. They provide risk management services that can help you identify potential issues before they escalate. This proactive approach not only saves you money but also helps maintain the value and reputation of your multi-family properties. Efficiency and Peace of Mind Dealing with insurance matters can be time-consuming and complex. Skyscraper Insurance Agency streamlines the process, providing you with instant and efficient access to the coverage you need. Their team is dedicated to ensuring that you have peace of mind, knowing that your multi-family properties are protected. Responsive and Supportive In the dynamic world of real estate, things can change rapidly. Skyscraper Insurance Agency understands this and is always responsive to your needs. Whether you’re expanding your property portfolio or dealing with unforeseen challenges, their support is just a phone call away. Conclusion When it comes to safeguarding your multi-family properties nationwide, Skyscraper Insurance Agency is the partner you can trust. Their experience, expertise, and commitment to customized solutions make them the go-to choice for property owners and investors. Reach out to them today, and rest easy knowing that your multi-family properties are in capable hands. Your investments deserve nothing less.