R.J. Lehmann on Commercial Property Insurance
CoStar – ICLE Editor-in-Chief R.J. Lehmann was quoted by CoStar in a story about the impact of recent spates of natural disasters on the insurance market for commercial properties. You can read full piece here.
“It’s raised alarms for the insurance industry and property owners because now people are thinking about the effects of things like rising ocean levels and the effects that saltwater exposure can have on some of these older properties,” said Ray Lehmann, a Miami-based senior fellow with the International Center for Law & Economics, a nonpartisan and nonprofit research organization that tracks issues including business risks associated with climate change.
Lehmann told CoStar News that commercial property insurers in California generally have more leeway to negotiate pricing with customers than exists in other states, including Florida. But those insurers’ rising costs for their own reinsurance are making it difficult to earn profits from policies without being able to pass on those costs to California commercial customers in the face of escalating wildfire, flooding and other risks.
Lehmann said those risks are also making it difficult for insurers to profit from previously lucrative, high-end commercial and residential policies that were offered for many years in California hubs of the wealthy, like Malibu and Santa Barbara, now increasingly prone to fires and other damaging weather events.