In recent years, the cost of commercial insurance has seen significant increases year after year. From 2013 to 2023, the monthly premium for insuring a commercial building went from $1,558 to $2,726, a massive 75% increase in just a decade. Based on a compounded annual growth of 8.7%, this monthly premium could be as much as $4,890 by 2030. So what exactly is causing these monthly premiums on real estate to rise so astronomically?
The Rise of Commercial Property Insurance
One of the biggest contributors is the rising trend of natural disasters in the US. In 2023 alone, there were 19 severe storms, 4 severe floods, and several more extreme weather events. Consequently, insurers saw combined losses of $92.9 billion across the board. In turn, they are aggressively raising prices to compensate for the losses they incurred.
What You Can Do About It
However, as a policyholder, it seems like prices are rising without relief even though no claims have been filed. However, there is one way to keep insurance premiums in check. By conducting inspections and proactively maintaining the commercial building, the building is seen as more favorable to insurers. This means that your building will be more widely eligible for coverage, and you can shop around to get the best possible rate. Furthermore, most insurers will give a policy credit just for getting annual inspections completely.
Conclusion
While rising insurance rates seem inevitable due to the trend of natural disasters, insurance premiums can be managed by staying on top of proactive maintenance and inspections.
Source: Kato Roofing
