Multifamily developers in coastal areas are expecting big increases in insurance costs this year, according to a report by Yardi Matrix.
In Texas and Florida, where Hurricane Ian caused $50 billion in damage last year, insurance costs are nearly 50% higher than in 2022. Some property owners could face far higher increases, though.
An executive with the largest affordable developer in Florida is bracing for 200% to 300% price spikes, according to a report by Multifamily Dive. Such great leaps in insurance costs threaten new development and property sales, Yardi Matrix says.
Yardi Matrix noted that increases in construction costs from inflation, labor, and supply chain issues along with the growth in property values are driving higher insurance costs.
Yardi Matrix added: Not only are costs increasing but insurers are covering less wind limit on replacement costs with large increases in deductibles, new exclusions for damages such as mold or flood endorsements, and limits on payouts. That forces property owners to layer wind on top of other policies to reach the replacement cost values required by lenders.
Related Stories
Multifamily Housing | Apr 3, 2019
Multifamily rent growth hits two-year high in February, rising 3.6%
A survey of 127 major U.S. real estate markets by Yardi Matrix shows no signs of slowing for multifamily rental demand.
Multifamily Housing | Apr 3, 2019
New multifamily development rises in Summerville’s Nexton mixed-use community
The new complex offers easy access to I-26.
Multifamily Housing | Mar 24, 2019
New York’s largest office-to-condo conversion nearing completion
One Wall Street will feature 100,000 sf of amenities and a three-level Whole Foods.
Multifamily Housing | Mar 18, 2019
New luxury multifamily development set to bring 254 units to the Maryland suburbs
Dwell Design Studios is designing the project.
Multifamily Housing | Mar 15, 2019
Portland’s new affordable housing development includes units for families transitioning out of homelessness
Salazar Architect is designing the building.
Building Tech | Mar 13, 2019
Almost everything you wanted to know about industrial construction
Our experts offer 15 tips on how best to perform factory-based construction.
Multifamily Housing | Mar 11, 2019
Kaiser Permanente takes aim at reducing chronic homelessness
Initiatives include a multimillion-dollar investment fund, and collaborating with a group that works with communities to house the unsheltered.
Multifamily Housing | Mar 6, 2019
MLK Plaza brings 167 units of affordable housing to the Bronx
The project was financed by the City’s ELLA program.
Multifamily Housing | Feb 26, 2019
275-unit residential building under construction at 2111 S. Wabash
Solomon Cordwell Buenz is designing the project.