Insurance on the Rise – Climate Risk and Real Estate Investment Decisions

Report by ULI and Heitman (2024) | Policy, Insurance, Standards

Curator: Michael Zuriff

Washington, USA

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Why we recommend it: This report aims to provide a comprehensive analysis of potential implications for commercial real estate owners and investors of changes to the property portion of the insurance policies. Property insurance is used by asset owners to mitigate the risk of loss related to physical damage or changes from common hazards, including fire, theft, wind, and flooding. Most insurance policies are obtained as a bundle containing a variety of protections, such as property, casualty (liability), business interruption, and additional special coverages (e.g. terrorism).

Key takeaways:

₋ The insurance sector plays a critical role in enabling commercial real estate ownership. Rising natural disasters and inflation are driving up insurance costs in commercial real estate. Insurers are tightening terms, raising premiums, and reducing coverage, making it harder for owners to meet lender requ…