Magazine article Mortgage Banking

Apartment Firms Benefited from Lower Insurance Costs in 2008

Magazine article Mortgage Banking

Apartment Firms Benefited from Lower Insurance Costs in 2008

Article excerpt

Apartment firms benefited from lower insurance costs across the board and more insurance availability in 2008, according to a survey by the National Multi Housing Council (NMHC), Washington, D.C.

NMHC's annual Apartment Cost of Risk Survey (ACORS) noted that, on average, apartment firms saw a 17 percent price decrease in 2008. This compares favorably with the 10 percent to 25 percent reductions recorded in the broader commercial property sector.

All three components of the total cost of risk for apartment firms--property, general liability and workers' compensation--fell in 2008 compared with 2007, said NMHC.

"The commercial property insurance marketplace was extremely competitive in 2008, thanks to favorable underwriting and investment results recorded by insurers in the two prior years," said NMHC. "Both factors fueled the increase in underwriting capacity and desire for growth well into 2008."

Other key findings of the survey include:

* Costs for property insurance, which accounts for 67 percent of the average apartment firm's insurance budget, fell 13 percent from 2007 to 2008. Implied or calculated premiums were $0.219 Per $100 in total insured value, down from a recent high of $0. …

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