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Written By: Nathan Kerr, Vice President & Affordable Housing Practice Lead, Scott Insurance
Commercial insurance rates for affordable housing organizations have continued to trend upwards since 2016. While this trend will continue for property coverage, there may be some relief for pricing, conditions and coverage capacity for some other commercial lines of coverage. Below are highlights of the expected commercial insurance market outlook for the affordable housing industry for 2023:
Property Insurance
The property market for affordable housing organizations will continue to harden in 2023, with restricted capacity and anticipated increases in property rates and deductibles.
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Catastrophe Losses - Natural disasters, attritional losses and capital/capacity shortfalls are key market driving factors that will largely impact market rate increases and coverage restrictions. Expect to see significant rate increases prior to valuation adjustments and increased catastrophe (CAT) deductibles.
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Property Valuation Increases - Carriers are closely reviewing property values and, in most cases, will push for increasing total insured values upon renewal. This increase in insured values is supported by the increased cost of materials and repairs, as well as continued supply chain issues.
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Reinsurance - There has been a reduction in reinsurance coverage capacity and substantial price increases where coverage is available.
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