When Terri Clifton began sifting through insurance policy renewal offers for Better World Properties’ multifamily assets last month, she felt a moment of relief that this year's double-digit increases came in far lower than last year's 100% rate hike. That passed when brokers told her she should be pleased to see a mere 30% increase. “Explain to me exactly what I'm supposed to be so happy about. The fact that you’re increasing it even more?” said Clifton, president of the Houston-based apartment management and ancillary services firm as well as a Houston Apartment Association advisory board member. Insurance prices are growing faster for multifamily than any other commercial real estate asset class, with national operators reporting a 26% rise in insurance costs on average from 2022 to 2023 and some being hit with 300% and 400% increases. The rise is most acute in catastrophe-prone regions, especially Texas, Florida and Louisiana. But multifamily owners and operators everywhere are feeling the pain of high rates, limitations in coverage, hikes on deductibles and a shrinking private insurance market. That rapid ascent is expected to continue into 2024, and operators told Bisnow that spiraling costs could kill deals, reduce returns on investments, force foreclosures and discourage investors from even entering the multifamily space. 
“If we do have more natural disasters, if insurance companies take more losses this year and next year and prices continue to go up, it’s completely unsustainable, and no one is going to be able to make their properties work,” said Gautam Goyal, CEO of Houston-based… Read the full story here. | 
