
The multifamily housing industry faces soaring insurance costs due to extreme weather events, rising construction expenses, and increased litigation risks. In 2024, hurricanes Helene and Milton alone caused over $170 billion in damage, compounding the financial strain on insurers and property owners. Apartment managers, who had hoped for stability after years of steep premium increases, are now bracing for further rate hikes in 2025.
The cost of insuring multifamily properties has more than doubled since 2017, with some owners seeing premiums rise by over 150%. Liability risks, especially in litigation-prone states like California, have further driven up costs. Meanwhile, insurance companies are exiting high-risk markets, leaving fewer coverage options. Many property owners are adapting by increasing deductibles, implementing risk mitigation strategies, and reassessing their portfolios to reduce exposure to natural disasters.
Some apartment investors are even selling properties in high-risk regions like Florida and diversifying holdings to manage insurance costs more effectively. Owners are also working closely with brokers to ensure accurate replacement cost assessments and reduce overpayment on policies. As the insurance landscape continues to shift, proactive risk management and strategic portfolio adjustments are becoming essential for multifamily investors to maintain profitability.