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Multi-family building landlords, builders and insurance
officials held a meeting to address the dramatic rise in
insurance rates. One of the topics covered is the reasons
premiums have risen so rapidly.
Andrew Dolliff, director of the Neighborhood Building Owners
Alliance, said construction costs have increased by over 50%.
“The main factor is that the building valuation and replacement
costs has increased 50% in the last four years because it
basically started at the start of the pandemic,” said Dolliff.
Dolliff said a lack of competition is also to blame during a
“hard insurance market.”
“The other thing that a hard market does is that some companies
pull out of the market so there is less competition, which
drives up the premiums and there’s few if any new insurers that
have entered the market,” said Dolliff.
In 2023, there were a record-high 142 insured natural disasters
around the world, and insured losses of more than $100 billion
for the fourth consecutive year. Dolliff said storms that
Illinois routinely experience are a major contributor to
property damage claims.
“Those thunderstorms and tornadoes contribute to about roughly a
third of the losses from natural disasters, so it’s not all
hurricanes, it’s not all wildfires, it’s not all earthquakes, a
lot of it is just wind and hail from a thunderstorm,” said
Dolliff.
Dozens of housing industry leaders, including the National
Association of Home Builders, are urging Congress and the Biden
administration to investigate the causes of spiraling insurance
costs.
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