Commercial real estate insurance pricing will likely remain high for 2-3 years due to industry losses, with a gradual decline expected when profitability returns. Key factors impacting real property insurance include rising improvement costs, lender requirements, changing insurance cycles, and shifts in the carrier market.

Climate change concerns have intensified for insurance companies facing challenges in 2022 and 2023, marked by higher claims, lower premiums, and carrier failures, resulting in significant underwriting losses.

Given tightening regulations in the insurance industry, carriers may now require a physical property tour prior to coverage, so initiating the process early is crucial to avoid sale closing delays.

Unbeknownst to many, insurance requirements in loan documents can be negotiable, so be sure to check the requirements and see if you have some wiggle room.

Artificial intelligence models, not manual assessments, now determine insurance premiums. You can make this work to your advantage as a property owner by maintaining ALL documentation regarding your property including contractor receipts, exact details of improvements made along with evidence of contracted services. In a sale, get detailed information on losses, prior insurance carriers, updates, etc. The better data you can provide, the more you can influence the data that is input into the AI machine. Tell your story effectively and completely, and have someone working for you who can tell your story, and your rates and coverage will improve.