CINCYCASHFLOWTHE CINCINNATI INVESTOR COMMUNITY

Underwriting1 min read

Multifamily Insurance Costs: How to Underwrite Around Rising Premiums

Insurance has quietly become one of the fastest growing expense lines in multifamily, and many operators are still underestimating it.

Wide view of the Cincinnati skyline with a stadium, two bridges and the Ohio River.

Why premiums keep climbing

Over the past 12 to 24 months, per door premiums have jumped due to higher catastrophe losses, reinsurance repricing, and rising replacement costs. Carriers are also tightening terms, raising deductibles, and pulling capacity from older or heavier value-add assets.

The underwriting lag

The issue is lag. Many operators still budget insurance off pre-2022 numbers or early broker indications. The increase becomes real at renewal, when premiums reset higher and lenders true up escrows.

That gap flows straight through NOI, compresses DSCR, and can delay refinances and reduce cash flow.

UnitsMiss per unitLost NOI
100$300$30,000

How to underwrite around it

  • Use trailing 12 actual premiums, not pro forma estimates.
  • Stress test renewals 25% to 50% higher, especially in secondary markets.
  • Quote early with a multifamily-focused insurance broker.
  • Model deductibles and add an insurance reserve buffer.

Insurance also comes up in conversations with brokers who have moved to the ownership side. Read what a Cincinnati multifamily broker learned as an owner for a real-world example.

Originally published in the Cincy Cash Flow Report on January 28, 2026.

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