Insurance Rates Spike for Multifamily Companies
According to an article in the Wall Street Journal, multifamily companies are facing a spike in insurance costs. From the article:
Renewal rates for multifamily insurance increased 33% on average over the past year, compared with 23% for the real-estate sector at large, according to insurance brokerage Marsh, a unit of Marsh & McLennan Cos.
Insurers expect rates to keep climbing. Global insurance prices could jump faster in 2020 if the global outbreak of the Covid-19 pandemic leads to a large number of insurance claims around the world.
“It would be hard to envision the recent Covid events not contributing to pricing escalations over the next several quarters,” said Brett Holmgren, director of consulting at Robert M. Currey & Associates Inc., which helps real-estate companies manage their risks. “It is certainly not going to help.”...
Premiums for new construction of apartment rentals are also rising. Fore Property, a development firm that has built some 25,000 apartments over the past three decades, recently saw a 100% increase in its insurance for buildings under construction, according to its Vice President Howard Stocking.
Read the full article here.