Quick Take: Florida’s residential insurance challenges have generated similar concerns in commercial multifamily. But institutional multifamily operates in a fundamentally different market. Origin’s portfolio diversification, carrier relationships and active risk management help mitigate insurance volatility even as individual homeowner premiums spike.
Insurance risk in Florida ranks among the most frequent questions Origin receives from investors—and for good reason. Headlines about skyrocketing homeowner premiums, carrier exits and growing concern on climate change have created understandable concerns about real estate exposure in the state.
But here’s what those headlines miss: the institutional multifamily insurance market operates under fundamentally different dynamics than the residential homeowner market. After working through multiple insurance renewal cycles across Florida properties, a critical insight has emerged: institutional apartment buildings and single-family homes exist in separate insurance universes, with different risk profiles, different carrier pools and different pricing mechanisms.
Two Markets, Two Realities
The residential insurance challenges in Florida are real. Homeowners have watched premiums double or triple in recent years. Major carriers like State Farm and Farmers have stopped writing new policies. Citizens Property Insurance—the state’s insurer of last resort—has become the largest property insurer in Florida, covering more than 1.2 million policies as of early 2025.
The commercial multifamily market tells a different story. While the sector has certainly seen premium increases over the past several years, the magnitude and volatility function quite differently than the residential market. Several factors explain this divergence:
Carrier Specialization: The carriers writing institutional multifamily coverage in Florida are specialty commercial insurers—companies like AIG, Zurich, Liberty Mutual, and Chubb—that focus specifically on large commercial properties. These carriers didn’t exit the market during the residential crisis because they’re underwriting different risks with different loss ratios. They maintain dedicated teams that understand multifamily construction, fire suppression systems and property management quality.
Underwriting Sophistication: Commercial multifamily underwriting involves detailed property inspections, engineering reports and loss control assessments. Insurers evaluate everything from roof condition and building materials to fire alarm systems and property management protocols. This granular approach allows carriers to price risk more accurately than the broad-brush approach often used in residential markets.
Loss Experience: Institutional multifamily properties typically demonstrate better loss ratios than single-family homes. Professional property management, regular maintenance, modern building codes for newer construction and built-in fire suppression systems all contribute to fewer and less severe claims. This track record matters to insurers.
Origin’s Institutional Advantage
Origin’s approach to insurance centers on two core strategies: portfolio-level coverage and active year-round risk management.
Master Insurance Policies and Portfolio Diversification: Rather than insuring each property individually, Origin structures master insurance policies that cover multiple properties across its funds’ portfolios. This approach provides several advantages. First, it allows the firm to work with top-tier carriers who prefer larger, diversified accounts. Second, geographic diversification across properties in Florida, Georgia, North Carolina, Tennessee, Texas, Colorado, Arizona and other markets reduces concentration risk. A carrier insuring a portfolio with properties spread across multiple states and markets faces different risk dynamics than one insuring a single building in a hurricane-prone coastal area.
This portfolio approach translates into tangible benefits: more stable premiums, better terms and consistent coverage availability. While individual property owners face the volatility of spot market pricing each renewal cycle, institutional platforms benefit from relationship-based underwriting and multi-year carrier partnerships.
Active Risk Management: Origin doesn’t wait until renewal season to think about insurance. The asset management team works year-round with carriers, brokers and third-party engineers to assess and mitigate risk. This includes regular property inspections, proactive maintenance of building systems, implementation of loss control recommendations and documentation of risk mitigation efforts.
When hurricane season approaches, the team’s preparation goes beyond hope. Properties implement storm preparedness protocols, secure loose items, verify backup power systems and coordinate with property management teams. This active approach demonstrates to insurers that Origin takes significant precautions to protect their funds’ investments—which matters when renewal time arrives.
Recent Market Dynamics
The 2024 hurricane season marked an important inflection point for Florida’s insurance market. Despite several storms making landfall, including Hurricane Milton as a Category 3 storm, insured losses came in below initial estimates. More importantly, the Florida Hurricane Catastrophe Fund (FHCF)—the state’s reinsurance mechanism for property insurers—performed exactly as designed.
Here’s something most investors don’t know about: the FHCF. Established after Hurricane Andrew in 1992, the FHCF provides reinsurance coverage to insurers writing property coverage in Florida. It’s funded through premiums paid by participating insurers and backed by the state’s ability to issue bonds if losses exceed available funds. For the 2024-2025 season, the FHCF provided $17 billion in reinsurance capacity.
This state-backed reinsurance layer is particularly important for commercial multifamily properties. It helps stabilize the primary insurance market by providing carriers with catastrophic loss protection at rates below what they’d pay in the private reinsurance market. The result: carriers can continue writing coverage in Florida without taking on unlimited tail risk.
The 2024 experience reinforced carrier confidence in the Florida market. Several insurers that had reduced exposure began writing new business again. Reinsurance costs—which had spiked in 2022 and 2023—moderated. Premium increases for well-maintained institutional properties slowed significantly compared to the prior two years.
Multiple Layers of Protection
Origin’s insurance strategy incorporates multiple risk mitigation layers:
Property-Level Coverage: Each property maintains comprehensive property insurance covering building replacement cost, loss of rents and liability exposure. Policies include wind and flood coverage with appropriate deductibles based on property location and characteristics.
Portfolio Diversification: Origin’s funds’ portfolios span multiple states and markets, reducing geographic concentration. Even within Florida, properties are distributed across different regions—from the Gulf Coast, to Northern and Central Florida and down to South Florida—each with distinct weather patterns and risk profiles.
Conservative Underwriting: Origin’s investment underwriting includes detailed insurance cost projections that assume continued premium pressure. The firm doesn’t underwrite investments assuming insurance will get cheaper or that coverage will become easier to obtain. Models build in conservative assumptions about both cost and availability.
Product Type Diversification: Many of Origin’s investments are in properties that contain multiple buildings (garden apartment communities, build to rent townhome communities), which may help limit the incidence of full or catastrophic loss from a singular weather event.
| Risk Category | Key Risk Factors | Mitigants & Best Practices |
|---|---|---|
| Premium Escalation | Significant post-storm premium increases; cost assumptions in prior underwriting are outdated | Stress-test underwriting; negotiate insurance cost caps in forward purchase agreements |
| Underinsurance | Replacement cost estimates could be substantially below actual cost to rebuild/repair; inflated construction costs post-storm | Annual replacement cost appraisals; agreed value endorsements; avoid co-insurance clauses |
| Named Windstorm Exclusions | Policies increasingly exclude hurricane/tropical storm perils; coverage gaps at time of loss | Require separate windstorm policy; verify through policy language review, not just COI |
| Flood Exposure | FEMA maps lag actual risk; 40% of flood claims are outside high-risk zones | Private flood market coverage; elevation certificates; site-specific flood modeling |
| Carrier Insolvency | Domestic carrier failures; claims paid by Florida Insurance Guaranty Association (FIGA) at reduced limits | AM Best A- or better requirement; diversify across carriers for large portfolios |
| Loan Covenant Breach | Coverage gap or carrier downgrade triggers loan default provisions | Annual lender notification; pre-renewal carrier due diligence; maintain policy continuity |
The Path Forward
Adequate coverage is expected to remain available for institutional multifamily properties in Florida based on current market structure and historical precedent. The combination of specialized carriers, the FHCF’s reinsurance capacity and improving loss experience creates a more stable foundation than existed several years ago.
That said, insurance remains a dynamic input that requires constant attention. Climate patterns evolve. Carrier appetites shift. Regulatory frameworks change. Origin’s approach recognizes this reality by maintaining flexibility in the insurance strategy, cultivating relationships with multiple carriers and staying ahead of market developments.
For investors evaluating multifamily opportunities in Florida and other Sunbelt markets, the insurance question deserves serious consideration—but it shouldn’t be viewed through the lens of the residential homeowner crisis. Institutional multifamily operates in a different market with different dynamics.
What has changed is the level of insurance sophistication required to underwrite, manage and exit Florida multifamily assets successfully. Operators who treat insurance as a back-office function rather than a strategic investment variable will find their risk-adjusted returns eroded. Those who integrate insurance management into their core operating playbook will be positioned to capture value from a market where less-disciplined competitors are retreating.
Origin’s Co-CEOs have invested more than $97 million of personal capital alongside investors across the platform since its inception in 2007. That alignment extends to every aspect of risk management, including insurance. The firm isn’t just managing other people’s capital—it’s protecting its own investment capital using the same strategies, the same carriers and the same rigorous approach brought to every investment decision.
The Florida insurance story isn’t simple, but it’s also not the crisis for institutional multifamily that headlines might suggest. With the right structure, the right partners and the right approach to risk management, Florida remains an attractive market for multifamily investment.
There is a private real estate investment strategy for virtually every investor.
Sources
- Florida Office of Insurance Regulation, “Market Share Reports – Property Insurance,” 2024-2025.
- Florida Hurricane Catastrophe Fund, “2024-2025 Coverage Options and Premium Formula Report,” State Board of Administration
- Insurance Information Institute, “Facts + Statistics: Hurricanes,” 2024
- National Association of Insurance Commissioners, “Commercial Lines Market Share Data,” 2024
- CoreLogic, “2024 Hurricane Season Insured Loss Estimates,” December 2024
