PriyaPatel
TLDR:
Climate change is driving up insurance costs for commercial real estate properties in the U.S. Insurers are raising premiums in response to extreme weather catastrophes such as wildfires and floods. Deloitte projects that average monthly insurance costs for a U.S. commercial building could increase from $2,726 in 2023 to $4,890 in 2030. This trend highlights the importance of using technology to mitigate risk and reduce insurance costs.
In a section of Deloitte’s 2024 Financial Services Industry Predictions, the impact of climate change on commercial real estate insurance costs is discussed. The United States leads the world in extreme weather catastrophes due to its location, topography, population growth, development in climate-vulnerable areas, and the growing impact of climate change.
The insurance industry’s response to these challenges is to raise premiums, with projected increases in average monthly insurance costs for commercial buildings. This trend underscores the need for property owners, insurers, and stakeholders to leverage technology to mitigate risk, reduce insurance costs, and adapt to the changing environment.
It is crucial for commercial real estate professionals to stay informed about the evolving landscape of insurance costs, climate change impacts, and technological solutions to address these challenges effectively. By proactively leveraging technology and innovative strategies, property owners can better manage risk, reduce insurance costs, and ensure the long-term sustainability of their investments.
