Insurance doubling from 2022?

Question

Hi,  is anyone else's insurance doubling from 2022 rates.  This is happening on all my properties as I go to renew.   What's happening in the insurance industry to cause this?

Jason Bott · Answer

@Matt Eklund Increased cost of construction could be viewed as the main cause for all of the rate increases.  Example - A kitchen fire in 2020 may have cost $50k, while that same fire in 2023 costs $100k-$150k.  I have heard this from several of the insurance carrier executives.

This increased cost forces the carriers to take large increase or exit the market.  Problem is, when you have more insurance carriers exiting the market, that creates less capacity, hence another force pushing premiums up.

Industry reports are showing 2024 Property premiums to continue to rise, but at a lesser % rate than 2023.

Matt Eklund · Answer

Lenders are requiring a high $/sf replacement cost for insurance.   Last year the minimum was $65/sf and now it's $120/sf, hence the increase in premium.

Casey J Burkhead · Answer

15-40% rate increases are typical across the board for all property insurance, no matter what insurance company.  They say it's due to a combination of inflation and increase in claims frequency.  They have all started to become much more strict with roof condition as well.  Your best bet is to find a good independent insurance agent that has access to several different investor friendly insurance companies.

Bill B. · Answer

Nope, although they are up 10-15% compare to the usual 5-8%.

Do you have decent deductibles ($2,500-$5,000).

Have you contacted an insurance broker to get several quotes?

Have you checked for a discount if you insure your personal home/car with the same company?

Sometimes insurance companies just decide they don’t want to insure an area or property type and they “solve the problem” by raising rates.

Insurance doubling from 2022?

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