Insurance Costs Are Killing Landlord Cash Flow - What the 2026 Numbers Say
Been compiling research briefs for real estate coaches and wanted to share something that keeps coming up in every conversation about deal underwriting right now.
Insurance has stopped being a line-item it's become a deal variable. Here's what the data actually shows:
● Average annual premiums hit a record $2,412 in 2025 after back-to-back surges of 13.8% and 13.7% in the two prior years. The pace is slowing but the baseline is now permanently higher.
● Multifamily per-unit insurance costs rose from $39/month in 2019 to $68/month by end of 2024 a 75% jump in real terms. That's straight from the Federal Reserve.
● A Minnesota Fed survey found 2024 premiums were double 2021 levels more than 6x the CPI increase over the same period.
● 80%+ of home flippers reported insurance issues causing them to miss a deal entirely. 44% of rental investors said the same.
● J.P. Morgan projects commercial property insurance costs increase nearly 80% by 2030. That's not a warning that's a planning horizon.
Heading into 2026 the investors who underwrite insurance as a fixed cost are pricing in risk they can't see. Geographic diversification into lower-catastrophe-exposure markets is becoming a core strategy, not an afterthought.
Happy to share the full brief if it's useful to anyone here. No pitch just sharing what I put together for a client this week.
- David
Most Popular Reply
And, the #1 state with the highest insurance cost in the nation: Florida. Woo-hoo! We're #1 - and yes, it sucks.
The cost of living in paradise includes surviving a hurricane or two - and even worse, the endless drama created by weather people who start reporting 'disturbances' in Africa. I guess all that reporting of sunny and clear gets to be too boring day after day. With it all, rental prices have increased. Landlords cannot/will not absorb this cost. Those engaged with Section 8 have been successful in holding their ground that if the muncipalities want housing, the subsidies/prices have to increase. We have also found that renters are emotionally tied to where they live and will pay more to be in the 'right market/property.'
What's most interesting and is being experienced in other 'paradise' states like Hawaii: the locals leave the market due to the costs but 'mainlanders, snowbirds', non-US citizens and those seeking a lifestyle change are moving in.
With all the drama of real estate, it remains the fastest way to build and preserve wealth. There is no 'passive' in building and managing a successful business - any business - and especially one as complex as real estate. My recommendation to all investors is KNOW your business...winging it is for rookies. You got this.