Apartment insurance fell 2.2% in 2025, but costs are still 2x 2019 levels

Apartment insurance costs fell 2.2% in 2025, the first decline after five straight annual increases, according to a CRED iQ same-store analysis reported by Commercial Observer. But costs are still more than double their 2019 level, and coastal owners have not seen the relief that Sun Belt owners have.

Relief is real, but it is uneven. Here is what the data says and how to use it in your 2027 budget.

What happened

CRED iQ analyzed property operating statements for apartment properties, including those financed through CMBS or Freddie K-Series deals, covering 2019 through 2025 with a first-half 2026 comparison. Commercial Observer's summary of the report shows the pattern:

• The spike is over, the level stayed. Insurance costs jumped 28.5% in 2023, then fell 2.2% in 2025.
• Insurance outgrew revenue. Nationally, insurance was $4.02 per $100 of revenue in 2025, up from $2.39 in 2019. In Louisiana it was $9.42, up from $4.77.
• 2025 was the first year since 2019 that revenue outpaced insurance. National revenue rose 1.4% while insurance fell about 2%.
• More owners are seeing cuts. The share of properties with premium increases above 20% dropped from 46% in 2023 to 24% in 2025, and 36% paid less than the year before. In the first half of 2026, 59% paid less than in the first half of 2025, up from 38% a year earlier.
• The Sun Belt is getting the relief. In 2025, Florida fell 9.8%, Louisiana 10.5% and Texas 8.4%. In the first half of 2026, 72% of Sun Belt properties paid less, and the typical premium fell 11%.
• Coastal markets are not. Major coastal metros rose 4.8% in 2025 and California rose 6.3%.

In the Sun Belt, revenue was flat in 2025 while insurance fell 7.2%, about $65 million in total, so net operating income fell 1.4% instead of 2.1%, per the same report coverage. CRED iQ also found insurance grew faster than rent in all 30 states it measured.

For longer-run context, the National Apartment Association reported same-store insurance per unit rising from $502 in 2021 to $777 in 2024, a 55% increase, using its own 22-metro dataset. Federal Reserve economists found a similar story in CMBS data: average monthly insurance cost rose from $39 per unit in 2019 to $68 in 2024 in real terms, more than 75%. Those figures use different samples and methods than CRED iQ, so treat them as direction, not a like-for-like comparison.

Why it matters for property managers

Landlords have only recovered part of the cost. The Fed note estimated that each $1 of added insurance cost was associated with roughly 25 to 40 cents of added revenue, and each $1 reduced net operating income by about 72 to 74 cents (Federal Reserve FEDS Note). The authors say these are correlations in a CMBS-financed sample, which skews larger, newer and more urban than the overall stock. Still, the takeaway holds: most of the cost sat on owner margins.

Rent growth gives you little room to absorb the next increase. RealPage reported same-store effective asking rents up 0.9% year over year in the third quarter of 2026 (RealPage 3Q data update). If a coastal portfolio is still facing premium increases, there is no big rent cushion to cover them.

Renewals are the first place to look. If your premium dropped, that does not mean you should cut rent. It means your operating margin may be recovering, and you can use that to hold renewal increases and keep good residents. If your premium rose, you need a plan before the policy renews.

What to do this week

1. Pull your last three renewal quotes and compare to 2023. Calculate insurance per unit and per $100 of revenue. If you are above $4.02 per $100 of revenue, you are above the CRED iQ national figure for 2025.
2. Ask your broker for a market check at least 90 days before renewal. Many Sun Belt owners are now paying less, so it is worth testing your own market. Ask for quotes from at least two other carriers.
3. Review deductibles and coverage terms before chasing the lowest premium. A lower premium with a high wind or hail deductible can cost more after one claim. Confirm terms with your broker.
4. Budget insurance separately from other expenses for 2027. Do not assume a Sun Belt decline applies to your property, and do not assume a coastal increase will repeat.
5. Document risk work. Roof age, water shutoff, fire systems and claims history all show up in underwriting. A clean file gives your broker something to negotiate with.
6. Check lease language on pass-throughs. Where leases allow a utility or fee structure, confirm with local counsel what you may and may not recover. Rules vary by state and city.

What we're watching

• Whether first-half 2026 declines hold through year-end renewals, especially in Florida, Texas and Louisiana.
• Whether coastal metros and California see the same softening, or keep rising.
• Whether lenders and appraisers start using lower insurance costs in underwriting. The Fed note suggested higher insurance costs could be capitalized into lower property values over time (Federal Reserve FEDS Note).
• Whether rent growth strengthens enough to cover insurance in markets where premiums are still rising.

This article is general information, not legal, tax or insurance advice. Confirm coverage and policy terms with a licensed broker.