(The Center Square) – As insurance costs continue to rise in Illinois and elsewhere, a building association is trying to determine the factors and what can be done about it.
Multi-family building landlords, builders and insurance officials held a meeting to address the dramatic rise in insurance rates. One of the topics covered is the reasons premiums have risen so rapidly.
Andrew Dolliff, director of the Neighborhood Building Owners Alliance, said construction costs have increased by over 50%.
“The main factor is that the building valuation and replacement costs has increased 50% in the last four years because it basically started at the start of the pandemic,” said Dolliff.
Dolliff said a lack of competition is also to blame during a “hard insurance market.”
“The other thing that a hard market does is that some companies pull out of the market so there is less competition, which drives up the premiums and there’s few if any new insurers that have entered the market,” said Dolliff.
In 2023, there were a record-high 142 insured natural disasters around the world, and insured losses of more than $100 billion for the fourth consecutive year. Dolliff said storms that Illinois routinely experience are a major contributor to property damage claims.
“Those thunderstorms and tornadoes contribute to about roughly a third of the losses from natural disasters, so it’s not all hurricanes, it’s not all wildfires, it’s not all earthquakes, a lot of it is just wind and hail from a thunderstorm,” said Dolliff.
Dozens of housing industry leaders, including the National Association of Home Builders, are urging Congress and the Biden administration to investigate the causes of spiraling insurance costs.
