Commercial Insurance Strategy: A Core Part of Asset Management

Commercial property owners across DFW, and nationwide, have been navigating rising insurance costs for several years now. Since 2020, premiums have increased steadily due to weather-related losses, rising construction costs, and a shrinking pool of carriers. As we move through 2025, it’s clear: this is not a short-term correction. It’s a structural shift in how the insurance market operates.

For owners and asset managers, insurance can no longer be treated as a routine renewal or passive line item. In today’s market, a proactive and strategic approach to insurance is essential to maintaining performance, protecting NOI, and supporting long-term asset planning.

Understanding the Pressure in Today’s Market

DFW is one of the most heavily impacted markets due to a unique combination of factors:

• Severe weather volatility – Hailstorms and high winds have made North Texas one of the most loss-intensive regions in the country.
• Construction cost inflation – Higher replacement costs are increasing premiums across all property types.
• Carrier contraction – Many insurers have exited or capped policies in high-risk areas, resulting in an unprecedented number of non-renewals.
• Reinsurance pullback – Global reinsurers are tightening capacity, driving up premiums even in lower-risk regions.

While these issues are national in scope, DFW’s exposure profile has placed it on the front lines of the hard market.

Why a Passive Approach No Longer Works

Many owners have historically relied on the same broker and simply renewed coverage year after year with minimal review. In the current environment, that strategy presents significant risk.

• Premiums are rising by 20–40% annually in many markets.
• Carriers are non-renewing policies, often with little notice.
• Underwriting timelines are longer, with stricter requirements and more documentation needed.

Even in NNN leases where tenants reimburse insurance expenses, ineffective planning can impact NOI and disrupt tenant relations.

Key Strategies for Today’s Insurance Environment

To manage risk and control costs, we recommend a more deliberate and structured approach:

1. Start Early and Shop Broadly

Initiate renewals 60-90 days in advance and work with brokers who have access to both admitted and non-admitted carriers, particularly those who understand market variations across regions.

2. Request Loss Runs Immediately

If you’re planning to explore new quotes or change carriers, request your loss runs as early as possible. These are required by underwriters and often cause delays if not secured promptly.

3. Reevaluate Deductibles

Adjusting wind/hail deductibles, such as increasing from 1% to 2% or 5%, can generate significant savings. However, this should be carefully modeled against your risk tolerance and capital reserves.

4. Review Exclusions and Sub-Limits Closely

Policy exclusions have become more common. Be aware of:

• Cosmetic roof damage exclusions
• Ordinance & law limitations
• Named-storm deductibles
• Water intrusion caps

Ensure that your policy terms still meet lender requirements and adequately protect your asset.

5. Invest in Risk Mitigation

Underwriters continue to favor well-maintained, lower-risk assets. Consider upgrades such as:

• Fire suppression systems
• Monitored alarms and security systems
• Certified roof inspections
• Documented preventative maintenance programs

These enhancements can improve your insurability and reduce long-term claims exposure.

Communication and Budgeting Are Just as Critical

Even when insurance costs are passed through to tenants, transparent communication is key. Providing context, data, and proactive messaging helps maintain tenant trust and minimizes pushback.

From a financial standpoint, budgeting needs to reflect today’s realities. Flat year-over-year estimates are a thing of the past! Owners should model 20–30% increases, particularly for assets in high-risk regions or those with legacy coverage terms expiring.

Looking Ahead

The volatility we’ve seen in commercial property insurance is not temporary. It reflects broader shifts in underwriting risk, climate exposure, and global reinsurance dynamics.

To succeed in this environment, insurance must be treated as a strategic pillar of your asset management plan.

• Shop thoroughly
• Structure thoughtfully
• Communicate proactively

Exploring Captive Insurance Options

At NorthBridge, we are currently evaluating a Single-Cell Captive Insurance Strategy. Over the past five years, captive insurance programs have helped owners retain more than $9.4 billion that would have otherwise gone to traditional carriers.

If your portfolio pays over $500,000 annually in insurance premiums and has a strong loss history (few claims), forming a captive may provide long-term cost stability, greater control, and profits on invested premiums.

I will provide Captive program updates as we navigate the complexities of this process! Feel free to reach out to me directly with any questions.