Commercial real estate insurance premiums rise 158% since 2017
Updated
Updated · Barron's · May 7
Commercial real estate insurance premiums rise 158% since 2017
11 articles · Updated · Barron's · May 7
First Street said industrial building insurance costs tripled to $0.24 per square foot by 2024, while multifamily premiums climbed from $286 to $879 per unit.
The report links the surge to worsening climate risks, nearly doubled reinsurance costs and lighter regulation than homeowners' insurance, allowing increases to pass more directly to property owners.
Higher premiums are squeezing operating margins and depressing values in riskier markets; in Fort Lauderdale, office insurance nearly doubled from 2020 to 2024 as values fell more than 17%.
As some insurance rates fall in 2026, is the commercial real estate climate crisis already ending?
As climate risk reprices America, which cities will become the new boomtowns and which will bust?
Will climate change create uninsurable ghost towns and trigger America's next financial crisis?
The 158% Premium Spike in Commercial Property Insurance: Causes, Regional Impacts, and Market Outlook for 2026
Overview
The US property insurance market stabilized in 2026 after a sharp 158% premium surge from 2017 to 2024 driven by frequent climate disasters and rising construction costs. Lower-than-expected catastrophe losses in 2025 eased reinsurance costs, leading to global rate declines. However, outcomes diverged sharply: newer, hardened buildings in low-risk areas saw premium drops of 10-30%, while older, high-risk properties faced rising premiums and stricter coverage. Insurers use advanced technology for precise risk assessment, fueling this split. Landlords pass higher costs to tenants, impacting affordability and property values, especially in hotspots like Florida and California. Building hardening and alternative insurance solutions offer hope for managing future risks amid ongoing climate challenges.