Hotel Insurance Costs: Market Snapshot and How Owners Are Responding.

Compiled by Ahmed Kabani, CEO, Kabani Hotel Group | July 13, 2026

Insurance has become one of the fastest-growing costs on the hotel P&L. By March, CoStar was reporting hotel insurance costs running roughly 70% above pre-pandemic levels, and in Florida, CBRE data shows insurance grew from about 6.5% of total operating costs in 2019 to 11.5% today. Beachfront, luxury, and historic properties have seen the steepest increases, though even lower-risk assets haven't been spared as carriers spread losses from high-risk markets across the broader book of business. In Florida, cost pressure has been severe enough that several hotel projects have been abandoned in mid-construction. (Source: AAHOA, via Today's Hotelier)

Some industry leaders are more optimistic than others about where rates go from here. AAHOA General Counsel John Houghtaling II expects rates to ease as insurers recover losses from recent disasters, describing the market as moving in short cycles. That view isn't universal ,other analysts caution that continued hurricane and wildfire activity could just as easily keep pressure on rates. AAHOA is also pursuing a member-exclusive insurance product, aiming to leverage the buying power of its 20,000 members to negotiate better terms. (Source: AAHOA, via Today's Hotelier)

Five Ways Owners Are Managing Costs and Coverage Today

Rather than waiting on the market, LODGING Magazine outlines five priorities for owners to build into their renewal process: (Source: LODGING Magazine, "5 Key Strategies for Insurance Coverage in Today's High-Risk, High-Cost Environment," May 18, 2026)

1. Audit the core coverage stack. Replacement cost valuations and business interruption limits are where gaps most often surface as construction costs and restoration timelines rise.
2. Add standalone protection for emerging risks. Cyber liability, funds-transfer fraud, and communicable-disease business-interruption language typically require dedicated endorsements, not legacy assumptions.
3. Close the seams between policies. Gaps often appear at the boundary between two policies , for example, a cyber event triggering property exclusion. Stress-test scenarios with your broker and counsel.
4. Manage cost structurally. Evaluate deductibles against cash flow, consolidate policies for negotiating leverage, invest in loss prevention, and bring carriers a well-documented underwriting package.
5. Tailor coverage to the property and set a renewal calendar. Start the review 90–120 days out to reassess valuations, loss runs, and lender compliance before renewal, not during it.

Two Policy Details Worth Checking Now

Per Houghtaling, two provisions are worth flagging with a policyholder attorney or broker: arbitration clauses, which push disputes out of court in a process that tends to favor insurers, and forum-selection clauses, which can force disputes into insurer-friendly jurisdictions. It's also worth confirming whether your policy pays replacement cost value (rebuild cost at today's prices) versus actual cash value (replacement cost minus depreciation) — the former costs more but avoids major out-of-pocket exposure after a loss and is typically what lenders require. (Source: AAHOA, via Today's Hotelier)

Sources: AAHOA reporting on insurance rate increases (John Houghtaling II, AAHOA General Counsel), via Today's Hotelier; "5 Key Strategies for Insurance Coverage in Today's High-Risk, High-Cost Environment," LODGING Magazine, May 18, 2026.