In this episode of the Ironclad Underwriting Podcast, host Jason Williams and co-host Frank Patalano break down the growing impact of insurance costs on commercial real estate underwriting. From rising premiums and DSCR pressure to refinancing risks and stress testing models, they explain why insurance is no longer just a fixed expense and how investors can prepare for unpredictable market shifts.

Topics Covered

• Why insurance premiums in Texas and Florida have become so unpredictable

• How insurance carrier competition is slowly returning to certain markets

• The benefits of master insurance policies and portfolio bundling

• Why insurance is now one of the top three operating expenses in multifamily investing

• How to stress test insurance growth assumptions in underwriting models

• The impact of rising insurance costs on NOI, DSCR, and refinance proceeds

• Real examples of insurance premiums doubling and tripling on deals

• Why operators should model multiple insurance scenarios before submitting LOIs

• Strategies investors use to reduce insurance costs, including raising deductibles

• How claims history and loss runs affect future premiums

• Why higher insurance expenses can reduce property valuations by hundreds of thousands of dollars

• The relationship between insurance costs and investor cash flow

• Geographic risks impacting insurance carriers in states like Texas, Florida, California, and Louisiana

• Why commercial real estate investors need larger reserves for insurance uncertainty

Quotes

“Insurance used to feel like a fixed expense. Now it’s one of the biggest variables in underwriting.”

“A small increase in insurance can destroy your NOI, hurt your DSCR, and completely change your refinance options.”

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🎧 Connect with Frank:

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