Unlike many property managers, Renters Place has a licensed insurance representative in our office because we’re constantly helping our Owners with property insurance issues. The issues are the rising premiums and coverage requirements. Frankly, both have gone through the roof and are causing margins to decrease. As we were talking to one of our clients on what we could do to help her save money, the post below came through our email from a major broker in the insurance world of investment property, so we thought we would share.
Rising Insurance Costs Are Reshaping Real Estate Decisions in 2026
January 8, 2026
Why insurance is now as critical as interest rates and home prices
For years, real estate affordability conversations have revolved around interest rates, inventory constraints, and home values. As we move deeper into 2026, another factor has firmly taken its place alongside those pillars: insurance cost and availability.
Recent industry research shows that homeowners and investors alike are now factoring insurance premiums into buying, holding, and selling decisions at levels we have not seen before. Insurance is no longer a background line item. It is a central component of real estate strategy.
For brokers, fiduciaries, and investors, this shift carries important implications for portfolio planning, underwriting expectations, and long-term risk management.
Insurance Has Become a Core Affordability Metric
Homeowners across the country are feeling the impact of rising premiums. Over the past several years, insurance costs have increased at a pace that outstrips inflation, driven by higher replacement costs, increased catastrophe losses, and tighter underwriting standards.
As a result, insurance is now influencing real estate decisions in ways traditionally reserved for mortgage rates:
- Buyers are reconsidering purchases after reviewing insurance quotes.
- Investors are reevaluating yields based on higher operating expenses.
- Property owners are delaying moves or refinancing decisions due to concerns about future premium volatility.
In many markets, insurance costs are no longer predictable year over year. That uncertainty alone is enough to influence whether a deal pencils out.
Coverage Confidence Is Declining
Rising costs are only part of the story. Confidence in maintaining adequate coverage is also eroding.
A growing segment of homeowners and investors express concern about whether they will be able to secure or renew coverage on reasonable terms in the years ahead. This uncertainty is leading many to shop policies more frequently, restructure deductibles, or accept narrower coverage than they previously would have considered.
For investors with multiple properties, the challenge compounds quickly. Managing renewals, carrier appetite changes, and inconsistent coverage terms across a portfolio introduces operational risk alongside financial risk.
This environment underscores the importance of insurance structures designed specifically for real estate portfolios rather than one policy at a time.
Climate Risk Is Accelerating the Shift
Climate exposure continues to be a major driver behind insurance market changes. More frequent and severe weather events are pushing carriers to reassess how they price and select risk.
Even property owners who have never filed a claim are feeling the effects through:
- Higher premiums
- Increased deductibles
- More restrictive underwriting guidelines
- Geographic limitations on coverage availability
Importantly, this trend is influencing behavior before losses occur. Buyers are increasingly evaluating climate exposure and insurability during due diligence, not after closing. Location, construction type, and loss mitigation features are now part of the insurance conversation from day one.
What This Means for Real Estate Investors
For investors, rising insurance costs directly affect cash flow, valuations, and exit strategies.
Insurance expenses now deserve the same scrutiny as taxes, maintenance, and financing terms. Failing to account for insurance volatility can distort pro formas and erode returns over time.
Key considerations for investors in 2026 include:
- Stress testing deals for premium increases rather than assuming flat costs
- Evaluating portfolio-level insurance efficiency instead of single-asset placement
- Prioritizing risk management and loss prevention to support long-term insurability
This is especially relevant for owners of single-family rental portfolios, small to mid-sized multifamily assets, and trust-owned real estate, where scale and structure can materially impact insurance outcomes.
The Role of Smarter Insurance Structures
As the insurance landscape grows more complex, solutions built specifically for real estate investors are becoming increasingly important.
Portfolio-based insurance programs can help streamline coverage, reduce administrative burden, and create more consistent underwriting outcomes across multiple properties. Technology-enabled platforms also play a critical role, allowing brokers and investors to quote, bind, and manage policies more efficiently while maintaining transparency.
At SES Risk Solutions, these principles guide the design of insurance programs for single-family rentals, multifamily properties up to 50 units, and trust-owned real estate portfolios. By combining specialized underwriting, modern platforms, and long-standing carrier relationships, SES supports brokers and investors navigating a market where insurance strategy is inseparable from investment strategy.
Looking Ahead
Insurance is no longer just a requirement for closing or financing. In 2026, it is a strategic lever that influences where people buy, how long they hold, and how confidently they invest.
For real estate professionals, staying ahead means understanding how insurance markets are evolving and aligning coverage solutions with the realities of today’s risk environment. Those who treat insurance as a proactive component of portfolio management rather than a reactive expense will be better positioned to navigate the years ahead.
Provide by SES Risk Solutions
