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
Game Changers | Jan 13, 2017
Building from the neighborhood up
EcoDistricts is helping cities visualize a bigger picture that connects their communities.
Multifamily Housing | Jan 11, 2017
Istanbul’s Valens Archway could be rejuvenated with “floating” housing concept
Superspace’s proposal would create a natural promenade atop the ancient stone structure.
University Buildings | Jan 9, 2017
Massive student housing project in Texas will be ready this Fall
Developers hope the early opening of some units sets the tone for the community and future rentals.
Multifamily Housing | Dec 22, 2016
Multifamily green financing programs grew rapidly in 2016
Multifamily green financing programs boomed in 2016, and are likely to continue to grow in 2017, according to the president of Partner Energy.
Market Data | Dec 21, 2016
Will housing adjust to an aging population?
New Joint Center report projects 66% increase in senior heads of households by 2035.
Multifamily Housing | Dec 15, 2016
Multifamily tower in St. Louis uses stacked design to make every apartment a corner unit
Designed by Studio Gang, the building’s stacked tiers will each comprise four floors and fan outwards as they rise up.
Multifamily Housing | Dec 12, 2016
BIG’s first residential condominium in the U.S. completed in Miami
Two 20-story twisting towers comprise 98 units on a three-acre site near Biscayne Bay.
Multifamily Housing | Dec 1, 2016
One of Canada’s largest media companies dives into real estate development
Rogers moves forward on M City, a multi-building, multi-year project in a Toronto suburb.
Multifamily Housing | Nov 28, 2016
Axiometrics predicts apartment deliveries will peak by mid 2017
New York is projected to lead the nation next year, thanks to construction delays in 2016
Sponsored | Multifamily Housing | Nov 11, 2016
Value engineering brings Santa Barbara apartments back on track
When framing estimates for a new apartment complex in Rialto, California, came in too high, a savvy developer decided to have the project value engineered. A switch to glulam and wood-framed shear walls got the project back in the black.
