How Multifamily Operators Can Lower Rising Insurance Costs

How Multifamily Operators Can Curb Rising Insurance Costs with Smart Maintenance Software

The multifamily industry is facing a growing challenge rising insurance costs are eating into profits. According to the latest Matrix Research Bulletin (March 2024), property insurance surged by 27.7% year-over-year, a staggering 129% increase since 2018. This makes insurance one of the fastest-growing expenses for property owners and operators.

At the same time, other operating expenses—such as repairs and maintenance (8.8%) and administrative costs (9.6%)—are rising, forcing operators to find ways to improve efficiency and protect their net operating income (NOI).

Why Are Multifamily Insurance Costs Rising So Rapidly?

Insurance costs are surging due to multiple factors, including:

• Frequent natural disasters – Hurricanes, floods, and wildfires have led to record-breaking claims. The Southeast region saw insurance costs jump by 35.7% in just one year.
• Higher repair & replacement costs – Rising material and labor costs make insurance claims more expensive for insurers, leading to higher premiums.
• Legal & liability challenges – Some states, such as Florida, have laws that make it easier for tenants to sue insurers, increasing litigation risk and payouts.
• Aging property infrastructure – Older multifamily buildings with deferred maintenance have higher risks of accidents and claims, pushing premiums even higher.

How a Strong Maintenance Software Can Reduce Insurance Costs

One of the most effective ways to lower insurance premiums is by reducing the likelihood of claims. Many insurers offer lower premiums to properties with proactive risk management and maintenance systems in place. This is where a robust maintenance management software comes in.

Prevents Costly Insurance Claims

Insurance claims for water damage, electrical fires, HVAC failures, and structural issues drive up premiums. A proactive maintenance system can reduce these risks by:

• Automating preventive maintenance for plumbing, electrical, and HVAC systems.
• Tracking inspections to ensure buildings remain compliant with safety regulations.
• Alerting maintenance teams about potential hazards before they turn into costly disasters.

Improves Documentation for Claims & Compliance

Multifamily operators struggle with insurance disputes because they lack detailed maintenance records. A good maintenance software provides:

• Digital logs of all inspections, repairs, and work orders—useful when disputing claims.
• Proof of proactive maintenance, helping justify lower premiums during policy renewals.
• Automated compliance tracking for fire safety, CO2 detectors, and HVAC servicing.

Reduces Repair & Maintenance Costs

The Matrix Research Bulletin found that repairs and maintenance costs increased by 8.8% in 2023. A maintenance platform can reduce costs by:

• Minimizing emergency repairs through preventive scheduling.
• Optimizing technician efficiency by automating work order assignments.
• Tracking parts inventory to avoid unnecessary spending.

Enhances Resident Safety & Reduces Liability

Many insurance claims are related to tenant injuries from unsafe conditions (e.g., broken handrails, faulty elevators, or poor lighting). With maintenance software, you can:

• Prioritize critical safety repairs to lower liability risks.
• Enable residents to report issues easily via a tenant portal.
• Ensure common areas are well-maintained, reducing slip-and-fall accidents.

How Much Can Properties Save with Maintenance Software?

While insurance costs per unit have risen to $636 nationally, properties in high-risk markets like Miami ($1,405/unit) and Tampa ($1,137/unit) are seeing even steeper premiums.

Multifamily owners who use advanced maintenance software report:

• 15-25% reduction in maintenance-related claims, leading to lower premiums.
• 30-50% decrease in emergency repairs, cutting overall repair costs.
• Increased NOI by improving maintenance efficiency and reducing unexpected expenses.

The Bottom Line: Smart Maintenance Lowers Multifamily Insurance Costs

With insurance costs climbing at unsustainable rates, multifamily operators must act now. Investing in a powerful maintenance management software is one of the most effective ways to reduce risks, improve efficiency, and lower insurance premiums.

Looking to Future-Proof Your Multifamily Property?

A smart maintenance platform like AppWork can help your property cut costs, prevent claims, and boost NOI. Contact us today to see how our maintenance software can help curb rising insurance expenses in your portfolio.