Commercial real estate insurance rates are dropping, giving property owners a chance to save money if they act quickly. After several years of high prices, insurance companies are now offering lower rates for well-maintained properties, especially those built after 1990.
Dan Garzella, the CEO of The Garzella Group, says this is a rare opportunity for owners and brokers. He recommends starting the insurance renewal process early—ideally 120 days before the current policy ends. This gives both brokers and underwriters enough time to review and negotiate the best rates.
The decrease in rates comes as insurers reach a better balance between pricing and risk. During previous tough market conditions, many buyers were pushed into the excess and surplus lines market because admitted carriers struggled to get approval for big rate hikes. Now, both admitted and non-admitted markets are lowering prices by 10% to 20%, according to Garzella.
Not every property will see these savings, though. Buildings in good shape, with updated roofs and clear maintenance records, are favored by insurers. On the other hand, older properties or those with deferred maintenance often face flat renewal rates.
Garzella also points out that claims history is no longer the main factor in pricing. Instead, insurers focus more on detailed, trustworthy data like roof age, accurate property values, and third-party risk analytics. Ownership groups that are transparent and provide thorough documentation tend to get better offers.
One common mistake owners make is relying on the seller’s insurance pricing after buying a property, especially in areas prone to natural disasters. Since those rates can be unrealistically low, it’s important to get independent quotes. Another frequent error is not shopping around for insurance. Garzella encourages owners to ask their brokers for a full market check, especially if they haven’t done it recently.
Strategic portfolio management also matters. Mixing low-risk properties with those in high-risk disaster zones in one insurance package can scare off carriers. Brokers should separate these exposures to encourage competition and better pricing.
While longer-term insurance deals are still uncommon, the current market offers room for creative solutions that cut costs without losing coverage. Brokers who specialize in commercial real estate are in the best position to take advantage of these opportunities.
With a relatively calm hurricane season recently helping underwriting results, the market looks promising for now. But a big disaster could change things quickly. That means owners and brokers have about six to twelve months to lock in better rates before conditions potentially tighten again.
Garzella sums it up simply: “Now is the time. Owners just need the right broker strategy to capture the savings.” For those willing to plan early, be open with information, and think carefully about their portfolio, meaningful drops in commercial real estate insurance costs are within reach.