As the cost of insurance becomes untenable in many states with high climate risk, lender reforms have become paramount, according to a report from CRE research firm Yardi Matrix.
In states such as Florida and Texas, insurance costs are rising upwards of 50%, threatening new development and property sales and causing headaches for commercial property owners.
Many reinsurance companies are abandoning high-risk states altogether, and those that stay are raising rates by 45-100%, according to Danielle Lombardo, chair of Lockton Global Real Estate, a New York-based advisory firm. "Something has to be done differently," she is quoted as saying in the report.
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