The recent upticks in the frequency and severity of weather events has also affected insurance premiums for rental properties.
According to S&P Global Ratings, insurance is an increasing percentage of total expenses for rental properties and the trend is expected to persist.
The weighted average for property insurance was about $590.30 in 2022, compared with about $473.60 the year before and about $386.90 in 2020. S&P Global Ratings analyzed 2020-2022 expense trends on 60 loans on U.S. affordable housing properties receiving low-income housing tax credits. The properties contain over 6,500 units.
“We expect property and casualty insurance premiums for commercial properties, including multifamily, will keep rising through 2023,” S&P Global Ratings said. “This is in part due to the material increases in insurance claims resulting from both the greater frequency of weather-related damages and the inflation-affected cost of repairs.”
Properties with the largest increases in insurance expenses are located in the following markets:
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