Commercial property insurance rates fell about 10 percent in the first quarter of 2026, with catastrophe-exposed properties seeing decreases as deep as 16 percent, according to Marsh. Multifamily owners are seeing renewals come in 5 to 15 percent cheaper, a reversal that brokers say began with January reinsurance renewals pricing roughly 15 percent lower. After years of relentless increases, the line item that broke countless apartment budgets is finally retreating.
Few operators tracked that line item more closely than CEO Shravan Parsi of American Ventures, whose Texas portfolio spans roughly 4,400 multifamily units and multiple commercial properties. Insurance went from a rounding error to a deal killer in the span of his last acquisition cycle. Now he is recalibrating in the other direction.
"Insurance was the one expense nobody could control," Parsi said. "You can renegotiate a contract or refinance a loan, but you cannot negotiate with a hurricane model. Watching that number fall is the best operating news this industry has had in three years."
The run-up was brutal by any measure. Apartment insurance costs jumped anywhere from 10 to 30 percent a year during the hard market, and Newmark tracked per-unit premiums in some markets rising from about $500 to $2,000 before settling back near $1,000. PwC estimated the average renter's share of insurance costs rose from $39 to $68 a month, because owners pushed what they could into rents.
Renters carried a share of the burden too. PwC's numbers imply the increase added nearly $350 a year to the average lease, and it arrived during the steepest rent growth on record.
The damage to valuations was mechanical. At a 5.5 percent cap rate, an extra $200,000 of annual insurance expense erases about $3.6 million of asset value. Deals died on that math alone.
Texas owners took it worse than most. The Dallas Fed found Texas premiums rose about 60 percent between 2019 and 2024 as billion-dollar disasters in the state climbed from 8 a year in the 2010s to 20 in recent years. Nationally, apartment insurance costs rose 26 percent in 2023 before posting their first annual decline since 2017 the following year, ending a streak of 27 straight quarters of increases.
The relief has identifiable causes rather than luck. Brokers and carriers point to a handful of forces working together.
Reinsurance capacity returned, with January renewals pricing about 15 percent lower
New carriers entered hard-hit states, including 17 new companies writing Florida homeowners business
Deductibles that had been forced up to 15 percent of insured value are falling back toward 5 percent
Competition revived as carriers chased premium growth again after profitable years
Florida shows how fast the turn can come. Average per-door multifamily premiums there fell from $797 to $479, and the state-backed insurer Citizens shrank from 1.4 million policies to about 336,000 as private carriers took risk back. "Property softening is cyclical," one advocate told Insurance Journal, noting the market has been here before.
Texas is following the same arc a season behind. The share of Texas owners reporting double-digit premium increases fell from 18.7 percent to 4.3 percent in the Dallas Fed's latest survey, even with the state's disaster count still elevated. Even California, for all its wildfire losses, saw commercial property rates drop about 9 percent.
A falling expense line tempts buyers to underwrite the trend forward, and that is exactly what Parsi refuses to do. American Ventures models insurance at renewal quotes, not at hoped-for future decreases, and treats any savings as margin rather than as the reason a deal works.
"With rent growth slowing and operating expenses rising, aggressive assumptions are a red flag," Parsi said in an investor update published last November. The warning runs in both directions, he argues, because a market that softened in two years can harden in one.
The firm also shops every renewal rather than rolling coverage forward, and it budgets a cushion above quote on assets with any catastrophe exposure. Savings that materialize flow to net operating income instead of being spent in advance.
The discipline comes from his first career. Before real estate, Shravan Parsi developed drugs for a living, and he says expense modeling rewards the skepticism of a clinical trial.
"One good quarter is a data point, not a cure," he said. "I want three renewal cycles of evidence before I call this a new normal."
The soft market has not reached everyone, and the exceptions matter. Affordable housing operators are still being punished, with insurance costs on subsidized properties up 17.8 percent in the latest survey, the seventh straight year of double-digit increases. Fewer than 10 insurers will even quote much of that stock, and former California insurance commissioner Dave Jones described the pricing as take it or leave it.
Liability coverage is also still rising in parts of the Sun Belt, including a 27 percent jump in Georgia. Marsh's own analysts caution that the averages hide wide variation by geography and construction type. "Rumors of a softer market are real, but it has yet to reach the properties that need it most," one specialist told CommercialEdge.
Parsi sees that gap as the next policy problem. Workforce housing carries the thinnest margins in the industry, so it has the least room to absorb premiums the market refuses to soften. The cost lands on rents eventually, because subsidized owners have no cushion to absorb it and no market-rate tenants to share it.
The reset arrives at a useful moment for dealmaking. Insurance was one of the three expenses, alongside taxes and debt, that froze apartment transactions, and it is the first of the three to clearly break lower. Buyers and sellers who disagreed about everything can now at least agree on a premium quote.
Shravan Parsi expects that to show up in transaction volume before it shows up in prices. His firm is penciling acquisitions for 2027 with insurance assumptions it could not have defended eighteen months ago.
Taxes remain stubborn and debt remains expensive, so the expense relief is doing the early work alone. Parsi argues that is how every recovery of his career has started, with one line item breaking before the others follow.
"Expenses tell you when a market is investable again, and this one is talking," Parsi said. "The insurance reset will not make a bad deal good. It makes a good deal possible to close, and that is how thaws start."