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Multifamily Minute Reader Reflections: How Much Have Your Insurance Costs Increased?
We asked our 45,000 Multifamily Minute readers how large of insurance premium hikes they've experienced in the past year. Here's what they said.
Start Your Application and Unlock the Power of Choice$5.6M offered by a Bank at 6.1%$1.2M offered by a Bank at 6.0%$2M offered by an Agency at 5.6%$1.4M offered by a Credit Union at 6.1%Click Here to Get Quotes!We've all heard that multifamily property insurance rates are way, way up. How much depends on where you look.
Commercial Observer points to a 20.4% increase in the first quarter this year.
A Marcus & Millichap report shows a 33% price jump over the year through the second quarter. And several markets, like Orange County, Calif., and Jacksonville, Fla., saw premiums soar by a respective 79.1% and 61.8%.
With all this data on rising costs, I figured it'd be best to ask you directly: How much have you seen your multifamily insurance premiums rise in the past year?
Survey Results
Here's how our respondents answered, representing multifamily investors active across the country in nearly every major market.
How much have your premiums changed in the past 12 months? | Percent of respondents |
|---|---|
Increased by 50% or more | 12% |
Increased by 25% to 50% | 14% |
Increased by 5% to 25% | 23% |
Stayed about the same | 51% |
Decreased | 0% |
There are a few different ways to look at the results here.
One: Insurance rates are indeed going up, but the scarier figures are probably just in higher-risk markets (think cities in California and Florida).
Two: For those folks whose insurance rates haven't risen, it may just be down to timing. If your policy has yet to renew this year, you (obviously) won't have seen an increase. Yet.
Three: It could just all be down to our responses and the geography they represent. This one doesn't really check out though. A large chunk of our readership is based in Florida, and we've got a decent representation in California as well. And, to be fair, they probably represent some of the more eye-watering increases in the chart above.
It's both kind of obvious yet worth noting that not all insurance premiums are rising at the same rates. Insuring an apartment building in Fort Myers is probably more costly than that same building transplanted to Gainesville.
Still, the trend is clear: Rates are going up. Just remember that there are ways to slow — if not outright counteract — skyrocketing premiums.
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Our Previous Survey
In our previous survey, I asked you about how long you typically hold multifamily investments for. Most of our readers take a long-term investment strategy. Learn how to keep ahead of the game in our prior analysis.