Commercial Property Owners Face Large Insurance Premium Increases in 2002

Commercial property owners throughout the nation can expect their insurance premiums to make major leaps this year due to the repercussions of the Sept. 11 attacks rippling through the insurance industry, according to Jenny Jones, CEO of Los Angeles-based Elkins/Jones, an insurance brokerage firm that specializes in coverage for the real estate industry.

According to a Business Wire report, Jones said premiums have gone up as much as 40 to 70 percent. Jones pointed out that commercial buildings which now pay five or six cents per square foot for insurance need to budget for costs to go up to as much as seven or eight cents a foot. She says the increases could be across the board for all types of properties, with single family housing developers being sharply affected.

Jones goes on to state that reinsurers potentially face billions of dollars in Sept. 11 claims. As many negotiate their treaties each January, they will raise their premiums to cover the losses and then insurance carriers will pass these on to property owners and eventually to consumers, she added.