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The Changing Face of the Habitational Insurance Market


Property investor holding a mini house
The Changing Face of the Habitational Insurance Market

Hello, Real Estate (and prospective) Investors,


Let's talk about an area close to our hearts in the world of Property and Casualty Insurance - the Habitational market. It's a sector that's experienced quite a shakeup recently, so grab a cup of coffee and let's dive in.


In simpler times, insuring commercial residential properties like apartments and condos was pretty straightforward. The Habitational market, which is a hefty $22 billion chunk of the $300+ billion commercial lines market, was a reliable territory for insurers. Most claims were your typical trip-and-falls, and coverage was abundant.


Fast forward to today, the game has changed. We're seeing a surge in varied claims - from habitability issues to assault and battery claims, and even human trafficking. The previously predictable sector is now a challenging terrain for insurers, with claim costs rising and the market getting tougher by the day.


We used to see most Habitational claims in California, but today they're popping up across the country, especially in states like Texas, Georgia, and Florida. This trend is changing the dynamics of the market, with coverage rates nearly doubling from an average of $40-$50 per door in 2020 to around $100 now. Plus, these higher rates often come with tighter terms.

As we journey through 2023, the market is tightening, particularly for policies under $10 million. The rising frequency and cost of claims mean fewer insurers are willing to navigate the Habitational market. This pressure is felt by everyone - building owners, operators, and agents alike.


Navigating these challenges might seem daunting, but remember, I'm here to help. Feel free to reach out anytime if you need guidance or want to chat more about this.


Here's to a secure future,

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