Hurricane Lull Brings Relief to Property Insurance Market

After relentless increases, U.S. property insurance premiums are finally coming down. For commercial real estate owners, the shift is starting to feel like a pressure valve releasing.

The turnaround follows an unusual calm: 2025 was the first year in a decade without a hurricane making landfall in the continental U.S., according to the National Oceanic and Atmospheric Administration. That quiet season has helped reset a market that had become borderline unworkable for some deals.

Insurance brokers say the tone has changed. Danielle Lombardo, co-leader of the real estate practice at Howden, said the last five years felt less like advisory work akin to management as developers walked away from projects because insurance costs blew up their underwriting, Bisnow reported.

The pain was real. As billion-dollar disasters piled up, insurers tightened terms and jacked up prices.

Commercial property insurance rates rose about 10 percent annually from 2017 to 2023 — and more than 20 percent in some markets — according to Moody’s. From 2021 to 2023, rates jumped between 6 percent and 19 percent per quarter, Marsh data showed. In extreme cases, insurance costs doubled as a share of revenue compared to five years earlier.

Now the pendulum is swinging back. Double-digit percentage decreases are anticipated for the first half of this year as competition intensifies with new market entrants and carriers increasing risk exposure, according to industry insiders. Marsh data shows U.S. property insurance rates fell 9 percent year over year in the third quarter of 2025.

The easing isn’t just about storms that didn’t happen. Insurers have rebuilt balance sheets after years of higher premiums, tighter coverage and fewer payouts, giving them more flexibility to compete, said Emily Rasmussen, president and COO of Resilience Insurance Analytics.

Last year wasn’t entirely disaster-free. Wildfires in Los Angeles — the Eaton and Palisades blazes — destroyed roughly 16,000 structures early in the year, causing up to $131 billion in economic losses and about $45 billion in insured losses, according to Climate Central. Deadly flash flooding in Texas added billions more in damage. Still, those events were isolated enough that they didn’t derail the broader insurance reset.

Howden’s Lombardo and co-leader Michael Brodie said it would likely take more than $100

billion in global insured losses in a single year to shove the market back into hard-mode pricing.

For real estate owners, lenders and investors, the reprieve could be meaningful. Lower premiums help stabilize operating expenses, improve debt coverage and bring sidelined deals back to life, especially in catastrophe-exposed markets like Florida, Texas and California.

But the optimism comes with a footnote: hurricane season starts up again on June 1.— Holden Walter-Warner