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
Building Team Awards | Jun 1, 2016
Multifamily tower and office building revitalize Philadelphia cathedral
The Philadelphia Episcopal Cathedral capitalizes on hot property to help fund much needed upgrades and programs.
Multifamily Housing | May 19, 2016
Architect Jean Nouvel designs flood-resilient Monad Terrace in Miami Beach
A man-made lagoon with lush vegetation at the base of the complex is expected to adapt to climate change and rising sea levels.
Green | May 16, 2016
Development team picked for largest Passive House project in North America
The 24-story curved building would be 70% more efficient than comparable housing in New York City.
Multifamily Housing | May 12, 2016
Micro apartment complex planned for artsy Austin district
Indie Apartments will consist of 139 one- and two-bedroom units at 350- and 520-sf each.
Mixed-Use | May 1, 2016
A man-made lagoon with a Bellagio-like fountain will be the highlight of a mixed-use project outside Dallas
Construction will soon begin on housing, retail, and office spaces.
Senior Living Design | Apr 14, 2016
Creating a home for eldercare using the ‘Green House’ design concept
VOA Associates’ Douglas King offers design considerations in implementing the Green House concept in eldercare for continuing care retirement communities.
Multifamily Housing | Apr 7, 2016
Multifamily and Specialized Housing projects honored in 2016 AIA Housing Awards
A San Francisco low-income mixed-use complex, a Los Angeles homeless veterans housing facility, and a series of student residential buildings at UMass were among the winners.
Multifamily Housing | Mar 10, 2016
Access and energy control app clicks with student housing developers and managers
Ease of installation is one of StratIS’s selling features.
Multifamily Housing | Mar 7, 2016
Multifamily developers face steep costs for violating Fair Housing Act
Designers without previous multifamily experience could overlook key provisions.
High-rise Construction | Mar 3, 2016
HOK’s Hertsmere House will be Western Europe’s tallest residential tower
Recently approved for development, the 67-story building will have more than 900 units.
