819: What Caused 2023’s WILD Insurance Market (and When Prices Could Fall) w/Robert J. Hamilton

BiggerPockets Real Estate Podcast

BiggerPockets

Education, Business, Investing

4.8 • 16.5K Ratings

🗓️ 17 September 2023

⏱️ 67 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

2023’s insurance market is bad. Really bad. “As bad as I’ve ever seen,” says Insurance Office of America’s Robert J. Hamilton. He’s never seen home and multifamily insurance prices as high as today. But, he has good reason to believe that a better insurance market could be upon us soon, especially as prices continue to ramp up and providers get priced out of the market. If you’re a property owner, there’s a good chance your insurance premium increased significantly in price last year and the year before. After several unprecedented natural disasters, states like Texas, Florida, and California have seen carriers massively raise rates or leave their markets entirely. But why now? And how long will this last? Robert walks us through exactly what’s caused the higher insurance rates, why so many carriers have given up or died out, and “the beginning of a reset” that could be on the horizon. Andrew Cushman, long-time friend of the show and multifamily investor, gives his seven quick tips on finding a better rate and protecting your property if and when disaster strikes. DO NOT analyze another deal before you watch this episode because, by the time you finish, your new insurance rate could ruin the profit potential. In This Episode We Cover: The wild 2023 insurance crisis explained and why rates have gone up so dramatically The “capacity crunch” forcing insurance carriers to leave risky markets What’s causing rates to rise and the “reinsurance” problem carriers face Underwriting your next rental/multifamily and how to properly predict property insurance costs The safest states/areas to invest in that carriers are flocking to The “percentage deductible” trap that could bankrupt your deal if you aren’t careful And So Much More! Links from the Show Find an Agent Find a Lender BiggerPockets Youtube Channel BiggerPockets Forums BiggerPockets Pro Membership BiggerPockets Bookstore BiggerPockets Bootcamps BiggerPockets Podcast BiggerPockets Merch Listen to All Your Favorite BiggerPockets Podcasts in One Place Learn About Real Estate, The Housing Market, and Money Management with The BiggerPockets Podcasts Get More Deals Done with The BiggerPockets Investing Tools Find a BiggerPockets Real Estate Meetup in Your Area Davids's BiggerPockets Profile David's Instagram Network with Other Investors on the BiggerPockets Forums How to Protect Your Rental from Fires, Floods, Lawsuits, and Liability What Is Rental Property Insurance & Do Landlords Need It? Book Mentioned in the Show: SCALE by David Greene Connect with Andrew: Andrew's BiggerPockets Profile Andrew's LinkedIn Andrew's Website Connect with Robert: Robert's Email Click here to listen to the full episode: https://www.biggerpockets.com/blog/real-estate-819 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

Click on a timestamp to play from that location

0:00.0	This is the Bigger Pocket Podcast. Show 819.
0:04.0	When it comes to broker and seller statements on insurance, you never take that statement for face value.
0:10.0	If you're getting a loan, make sure you know what your lender's requirements are going to be on insurance.
0:15.0	Also, find other multi-family, even single-family investors who are investing in your market doing what you want to do and say,
0:22.0	hey, what are you paying for insurance? What kind of coverage are you getting? What challenges are you having?
0:27.0	If you do those three things, it'll at least give you a good starting point. Looking forward three years, that's a little bit tougher.
0:32.0	But if you have the right starting point, you're you're you're me much better off from the get go.
0:37.0	Let's go on out everyone. This is David Green, your host of The Bigger Pockets Podcast.
0:41.0	The biggest, the baddest and the best real estate podcasts in the world every week.
0:46.0	We bring you stories how to's and the answers that you need to make smart real estate decisions now in this current market.
0:53.0	Today, we're talking about the wild insurance market we're in right now. We're going to get into how we got here.
0:59.0	It's impact on different asset classes. What smart investors can do in order to protect their properties and themselves and how the insurance market works as a whole.
1:08.0	I am joined by my partner and friend, Andrew Kushman, as we are going to be talking to Robert Hamilton and expert in the space.
1:16.0	Andrew, welcome to the show. Good to be here, my friend. Yes, it is. And it's good to have you just got done surfing.
1:21.0	And now you're on a podcast. I'm glad that you're with me today wearing your flower shirt.
1:26.0	I noticed like this is the shirt you wear when you want to make a handsome statement. Brandon Turner also our mutual friend has a handsome shirt.
1:34.0	His is made of denim. It's like the one shirt he has. It has sleeves on it. And I know that he really wants to make a good impression when he wears it.
1:41.0	So thank you for wearing your handsome shirt. When I'm talking to you, I want to present the best. Good to hear it.
1:46.0	All right. So in today's show, we are talking about something that no one really gets excited to talk about, but everybody needs to hear it.
1:53.0	This is the vitamins of the real estate world. We're talking insurance rates are the new barrier to entry in real estate.
2:01.0	They're messing up a lot of deals. Current rates are throwing off even experience investors from their game.
2:07.0	Do not analyze another deal without listening to today's episode. Andrew, what's something that real estate investors can look for in today's show that will help them in their business?
	...

Please login to see the full transcript.

Previous episode | Next episode

Disclaimer: The podcast and artwork embedded on this page are from BiggerPockets, and are the property of its owner and not affiliated with or endorsed by Tapesearch.

Generated transcripts are the property of BiggerPockets and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.