BRI News

BLOG | Property Owners: It’s Your Turn for Big Insurance Premium Increases

By: Ken Fuirst and Jason Schiciano, Levitt-Fuirst Insurance

(TARRYTOWN) For many years, insurance premiums for property owners – including commercial buildings, apartment building owners, condominiums, cooperative apartments, and homeowners – were relatively stable, commonly incurring increases of less than five percent annually.

Meanwhile, construction contractors, builders, and developers often incurred double-digit annual premium increases.

Well, now “the tables have turned.” Beginning last year, and continuing in 2023, many contractors (with no past claims or extreme types operations) have received single-digit renewal premium increases, while property owners of all kinds – commercial, multi-unit residential, and even single-family homes/condo units/apartments – have seen increases of 10 percent or more, sometimes much more.

Unfortunately, we expect renewal increases for property owners to continue throughout the remainder of 2023. If you or your business receives a shocking insurance renewal premium increase, know that you are not alone – the entire New York habitational real estate industry is experiencing this unwelcomed trend. Here is an explanation of the market forces driving these increases.

MARKET FACTORS – the following are contributing to higher insurance rates:

· Rates for reinsurance (insurance purchased by insurance companies to cap losses) have increased 20 to 60 percent (Fitch) because of nationwide catastrophic claims events (hurricanes, floods, wildfires, tornadoes, etc.)

· Poor industry financial performance: the insurance industry paid-out more for claims and claims-related expenses in 2022 than premiums it collected (Triple-I, Milliman, Verisk).

· More restrictive underwriting: carriers are less interested in insuring buildings without central-station fire alarms – old buildings, large joisted masonry and wood-frame buildings, closely clustered buildings, buildings with grills on balconies, and buildings that are considered high-risk exposures. Total renewal increases for these types of buildings could be 25 to 50 percent, or more.

· Fewer carriers: multiple insurance carriers have pulled-out of the New York habitational real estate market, or have little interest in expanding their current book of business.

BUILDING REPLACEMENT COSTS – Construction material and labor inflation drive increased building and home replacement costs, which results in carriers requiring higher amounts (“Limits”) of insurance on buildings and homes, and higher premiums.

UMBRELLA MARKET COLLAPSE – Most Umbrella liability insurance programs for multi-family residential and commercial buildings have withdrawn from New York; only a few remain, and premiums have typically increased 50 to 100 percent over the last two years. Many buildings no longer qualify for these programs (due to age, construction factors, life-safety issues, or losses) and may experience Umbrella premium increases of five to 10 times for lower amounts of Umbrella insurance.

As a result of the above factors, a building’s incumbent insurance carrier renewal is often the most competitive option, even with an increase of 10 percent or more. Real estate owners should address all insurance carrier safety and loss-prevention “recommendations” promptly to maintain good standing with the incumbent carrier, and/or alternate carriers that may offer competitive quotes.

Keep in mind, a new carrier will likely do an inspection of your property, and may require repairs, in order to keep the policy in-force. Proper insurance and risk-transfer documentation for contractors servicing or repairing buildings is also becoming more important to carriers insuring multi-family residential and commercial buildings.

In this daunting insurance market:

· Speak to your insurance broker about renewal premium expectations, so that you or your organization can budget accordingly;

· Don’t delay necessary building capital improvements and repairs;

· When considering an alternate carrier, be sure to compare types and amounts of coverages, as well as key exclusions. Also, expect that the new carrier will inspect your building, and may require repairs as a condition of continued coverage; and,

· Obtain documentation from contractors that confirms you or your organization is indemnified, and additional insured, and that the contractor liability policies have no unusual exclusions hidden in the policies, which would prevent coverage for the property owner.

In short, the factors impacting insurance for property owners is more complex than ever. Better to be aggravated but informed, rather than blissfully unaware until you’re shocked into reality.

Editor’s Note: Levitt-Fuirst Insurance is the Insurance Manager for The Builders Institute (BI)/Building and Realty Institute (BRI) of Westchester and the Mid-Hudson Region. Ken Fuirst and Jason Schiciano are co-presidents of the company. The firm is based in Tarrytown.


“In short, the factors impacting insurance for property owners is more complex than ever. Better to be aggravated but informed, rather than blissfully unaware until you’re shocked into reality.”

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