In recent years, commercial insurance costs have seen an astronomical increase in the past decade. It is estimated that the monthly cost of commercial insurance for buildings in 2013 was just $1,558. Just 10 years later, this cost has increased by 75% across the board. So, what exactly is driving this price higher?
The most pertinent factor is that insurance companies are forced to increase prices to compensate for the losses they’ve received. It is estimated that in 2023 alone insurance companies had to recover $92.9 billion from its insureds. This staggering figure can be attributed to the numerous natural disasters seen in that year. 2023 saw 19 severe storms, 4 floods, 1 wildfire, and several other large-scale events. Worst of all, the prevalence of extreme weather events is expected to worsen significantly by 2030. So how can policyholders manage their insurance premiums?
One of the best ways to keep insurance costs low is to make the commercial building a better risk. This means keeping up to date on maintenance and regularly inspecting the building for any potential problems. This makes the building eligible for more insurers, which means you can shop around for the best insurance price possible. Most insurers even provide a credit just for getting annual inspections done. Ultimately, insurance costs are going to increase due to the increasing prevalence of natural disasters. However, the best way to keep your insurance premiums under control is to proactively maintain your commercial building.
Source: Kato Roofing