High Multifamily Insurance Rates Threaten Transactions
When Terri Clifton began sifting through insurance policy renewal offers for Better World Properties’ multifamily assets last month, she felt a moment of relief that this year's double-digit increases came in far lower than last year's 100% rate hike. That passed when brokers told her she should be pleased to see a mere 30% increase.
“Explain to me exactly what I'm supposed to be so happy about. The fact that you’re increasing it even more?” said Clifton, president of the Houston-based apartment management and ancillary services firm as well as a Houston Apartment Association advisory board member.
Insurance prices are growing faster for multifamily than any other commercial real estate asset class, with national operators reporting a 26% rise in insurance costs on average from 2022 to 2023 and some being hit with 300% and 400% increases.