Multifamily portfolio insurance best practices

Several conversations with owners in the multi-family space recently who are experiencing challenging insurance renewals. 25%+ for years in a row. This is happening not only in states like CA and FL but also in the Midwest as well now. I would recommend a few major things to consider. First, what is the source of the increases? Because not everyone is seeing this extreme increase still as the hard market begins to cool off in 2023-2024. 👉 Have you done due diligence on your broker? Do not send multiple brokers to market, but broker select carefully. 👉 Are all major building systems updated if the buildings are older [built 1970s or earlier]? HVAC, roofing, plumbing & wiring. If building systems have not been updated, it may be time to sit down and really do the math on what it would cost to update some of those items over the next 3-5 years vs. continue to pay 25%+ more for insurance every year. Reallocation of funds to capex from insurance spend may be worth it. At a certain point, those increases are not sustainable. Your broker should be working with you to be proactive instead of reactive. 👉 Does your scale and financial situation support consideration of an alternative risk financing i.e. captive? 👉 Are you in a high wildfire or hurricane/wind zone. If so, have you discussed creative solutions like carving out that exposure from your Property program and placing a separate Parametric policy to address that exposure? 👉 Are you being honest with yourself about the condition of the properties? Loss ratios [5 year loss history vs premiums paid?] or is it time for an honest reflection and adjustment of reserves if insurance increases are warranted for your situation? Not sure about one or more of the items above? Reach out. Let's talk.

Not too long ago, many real estate investors treated insurance as a formality. I just spent an hour learning why that’s a big mistake. Every week, I meet with 3 business partners to evaluate investment opportunities. Lately, we’ve started inviting experts to join our calls — to stress-test our thinking and learn from people in the know. Two weeks ago, we spoke with Chip Burtner from USI Insurance Services. He walked us through what underwriting actually looks like from an insurer’s perspective. And it completely reframed how we think about risk. Here are my 3 key takeaways: 𝟭. 𝗨𝗻𝗱𝗲𝗿𝘀𝘁𝗮𝗻𝗱 𝗵𝗼𝘄 𝘆𝗼𝘂𝗿 𝗽𝗿𝗼𝗽𝗲𝗿𝘁𝘆 𝗶𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲 𝗶𝘀 𝘂𝗻𝗱𝗲𝗿𝘄𝗿𝗶𝘁𝘁𝗲𝗻 Carriers look beyond the rent roll. They assess loss runs, income, insurable value, property age and square footage. Older assets often need surplus lines carriers - higher premiums, fewer options. If you don’t account for the risks they prioritize like building age, claim history, and system obsolescence you risk surprises in coverage or pricing ___ 𝟮. 𝗦𝗺𝗮𝗹𝗹 𝗶𝘀𝘀𝘂𝗲𝘀 𝗰𝗮𝗻 𝘁𝗿𝗶𝗴𝗴𝗲𝗿 𝗯𝗶𝗴 𝗰𝗼𝗻𝘀𝗲𝗾𝘂𝗲𝗻𝗰𝗲𝘀 Flood coverage doesn’t just apply to units in FEMA zones, it applies to the entire property. A single pipe burst can cause $100K+ in damages, even on top floors. Older systems like Stab-Lok electrical panels can spike your premiums or make you uninsurable. Lenders typically require general liability insurance, but for larger deals or higher-risk properties, many also require umbrella coverage. Umbrella coverage acts as a second layer of protection and often cost 30–80% more than your base liability premium, depending on limits, property type, and perceived risk. ___ 𝟯. 𝗧𝗿𝗲𝗮𝘁 𝗶𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲 𝗮𝘀 𝗮 𝗽𝗼𝗿𝘁𝗳𝗼𝗹𝗶𝗼-𝘄𝗶𝗱𝗲 𝘀𝘁𝗿𝗮𝘁𝗲𝗴𝘆 If you own multiple properties with separate policies, engage your insurance broker to assess master policy options. Aligning them under a master policy based on vintage, size, and geography can secure better terms. But if you deviate too much: say, with a one-off property that doesn’t match your portfolio profile, your premiums across the board can go up. Insurance strategy should scale with your acquisitions. 𝗕𝗼𝘁𝘁𝗼𝗺 𝗹𝗶𝗻𝗲: Done right, insurance becomes a strategic lever: → Shields you from downside risk by shifting catastrophic risk off your balance sheet → Satisfies lender requirements → Supports scalable growth by reducing administrative complexity and allowing you to forecast insurance costs more accurately P.S. We’re planning to bring in more experts in the coming weeks. Would you like to connect over a call? send me a message, and let’s set it up.

🔥 Multifamily Insurance Costs Have Skyrocketed—Here’s How We’re Adapting 🔥 One of the biggest challenges for multifamily operators right now? Insurance costs are through the roof. We’ve seen premiums double or even triple in some markets. Here’s how we’re tackling it: ✅ Bulk Policy Negotiations – We’re working with insurance providers to secure portfolio-wide policies instead of property-by-property, creating cost efficiencies. ✅ Improving Risk Management – Lower claims = better rates. We’ve tightened up our safety measures, fire prevention, and property inspections. ✅ Reevaluating Deductibles – Higher deductibles can lower premiums, but only when cash reserves are strong enough to cover unexpected claims. ✅ Strategic Market Selection – Some markets have become too volatile for insurance pricing. We’re factoring this into our underwriting more than ever. This is an issue no one can ignore in today’s market. How are you handling rising insurance costs in your portfolio? Let’s share strategies. 👇

Most people think insurance is just about compliance. A multifamily insurance specialist looks at it very differently. A broker who truly understands multifamily doesn’t just ask, “Does this meet lender requirements?” That’s where strategy comes in. Instead of chasing quotes with random “quote and hope” brokers, a specialist focuses on: ➡️ Structuring coverage at the portfolio level strategy for more buying power with carriers ➡️ Aligning insurance with lender expectations and NEGIOATING when appropriate ➡️ Using deductibles, excess layers and program design intentionally not by luck ➡️ Treating insurance as part of the business plan, not a checkbox! When multifamily insurance is structured properly, it directly affects NOI… and NOI drives value for each property. When your broker understands how your property makes money, insurance stops being a cost center and starts supporting the investment strategy. #CommercialRealEstate #Apartments #Multifamily #SeattleMultifamily #PortlandMultifamily #SeattleCRE #PortlandCRE #CRE #PropertyOwners #InsuranceBroker #MultifamilyRealEstate