Commercial Insurance Market Outlook for Affordable Housing

Written By: Nathan Kerr, Scott Insurance, Vice President & Affordable Housing Practice Lead

Commercial insurance rates for affordable housing organizations have continued to trend upwards since 2016. While this trend will continue for property coverage, there may be some relief for pricing, conditions and coverage capacity for some other commercial lines of coverage. Below are highlights of the expected commercial insurance market outlook for the affordable housing industry for 2023:

Property Insurance

The property market for affordable housing organizations will continue to harden in 2023, with restricted capacity and anticipated increases in property rates and deductibles.

The property market for affordable housing organizations will continue to harden in 2023, with restricted capacity and anticipated increases in property rates and deductibles.

  • Catastrophe Losses - Natural disasters, attritional losses and capital/capacity shortfalls are key market driving factors that will largely impact market rate increases and coverage restrictions. Expect to see significant rate increases prior to valuation adjustments and increased catastrophe (CAT) deductibles.
  • Property Valuation Increases - Carriers are closely reviewing property values and, in most cases, will push for increasing total insured values upon renewal. This increase in insured values is supported by the increased cost of materials and repairs, as well as continued supply chain issues.
  • Reinsurance - There has been a reduction in reinsurance coverage capacity and substantial price increases where coverage is available.
Renewal Pricing Trends
Casualty Insurance

The casualty market for affordable housing organizations is somewhat of a mixed bag, with some challenges and some improvements.

  • General Liability - Indirect market drivers, such as the economy, regulatory changes, social inflation, nuclear verdicts and funded litigation, are continuing to edge up general liability rates. Additionally, properties with pull cords or other call-for-aid systems are facing significant insurability issues due to a higher liability risk and more loss exposure than routine habitational properties.
  • Umbrella/Excess - For those affordable housing organizations with umbrella limits provided by a primary carrier, pricing will be stable. However, we are seeing limits drastically decreasing and the purchase of additional layers is very expensive.
  • Auto - According to the Council of Insurance Agents and Brokers (CIAB), auto liability rates will remain strained by the steady rise of claims costs and an increase of drivers on the road post COVID-19.
  • Workers’ Compensation - Affordable housing organizations will likely see the most favorable pricing for workers’ compensation, as compared to other lines of coverage. Workplace safety, as part of a comprehensive risk management strategy, is important to reduce claims. We continue to encourage our affordable housing clients to conduct and improve safety training, health programs and workplace wellness to improve their workers’ compensation outlook.
Cyber Insurance

We are seeing an increased level of competition from cyber markets eager to write new business, and we expect 2023 will bring only moderate rate increases for organizations demonstrating adequate controls. A downward trend in cyber claims through the end of 2022 will also contribute to more moderate pricing this year.

Financial & Professional Insurance

The financial and professional lines of business remain very competitive throughout the marketplace. Underwriting scrutiny will continue, however rate increases are expected to be minimal. Directors & Officers coverage is seeing flat renewals and even rate decreases in some cases.

Scott Insurance Affordable Housing Practice Group

The Scott Insurance Affordable Housing Practice Group exists to partner with affordable housing organizations to help them build the best possible insurance and risk management strategy so they can utilize more of their resources to achieve their mission of improving lives and communities. Visit to learn more about our specialized and dedicated Affordable Housing Practice Group.