Storm-damaged apartment building with collapsed roof, broken windows, and scattered debris during heavy rain under dark clouds
June 5, 2025

Trends in Insurance Claims for Apartment Buildings (2020–2025)

Introduction

Between 2020 and 2025, the apartment building insurance industry has seen a major shift. Whether you’re a landlord, investor, or property manager, understanding apartment building insurance claims trends is key to protecting your asset and staying ahead of premium hikes.

This post breaks down the biggest trends driving claims — from extreme weather and water damage to legal liability and inflation. We’ll also offer actionable tips to help you reduce risks and save money.

1. Weather-Related Insurance Claims Are Soaring

➤ More Frequent and Severe Storms

According to NOAA, the U.S. experienced an average of 18+ billion-dollar weather events per year between 2020 and 2024 — a sharp increase compared to previous decades.

🔥 Notable Example:

Winter Storm Uri (2021) led to over $10 billion in damages, with apartment buildings in Texas suffering frozen pipes and heating failures.

Most Common Weather-Related Claims:

  • Wind and hail damage to roofing and siding
  • Water damage from ice dams and freezing pipes
  • Wildfire destruction in the West
  • Roof collapses from heavy snow or rain.

2. Water Damage Claims: The #1 Cause of Non-Catastrophic Losses

💧 It’s Not Always the Weather

Water damage from leaking pipes, broken HVAC systems, and tenant accidents has steadily increased.

📊 Data Snapshot:

  • Average water damage claim (2023): $11,098
  • Up from $7,000 just five years ago
  • 40% of claims linked to buildings over 30 years old

Common Triggers:

  • Overflowing bathtubs and sinks
  • Worn-out plumbing or roof leaks
  • Dishwasher and washing machine malfunctions

Pro Tip: Installing leak sensors and doing annual plumbing inspections can slash your claim risk.

3. Liability Claims and Lawsuits Are On the Rise

🧾 Why Liability Claims Are Costing More

General liability insurance for apartment buildings has become more expensive due to:

  • More slip-and-fall lawsuits
  • Tenant injuries caused by faulty lighting or stairwells
  • Dog bites and unsupervised tenant activities

📈 Liability Cost Surge:

  • Average claim in 2020: ~$14,000
  • Average claim in 2024: ~$22,500

The rise in “nuclear verdicts” (jury awards over $10 million) has made liability coverage essential — especially in litigious states like California, New York, and Florida.

4. Fire-Related Claims Remain the Most Expensive

🔥 Key Fire Claim Facts:

  • Average fire-related claim: $77,000+
  • Most fires stem from:
    • Kitchen accidents
    • Faulty wiring
    • Smoking
    • Space heaters

Buildings without updated electrical systems or sprinklers are especially vulnerable.

Tip: Many insurers now offer discounts for fire prevention upgrades.

5. Inflation and Supply Chain Issues Drive Up Claim Costs

🛠️ Repairing Damage Costs More Than Ever

From 2020–2023, construction materials surged by up to 40%, and labor shortages made repair timelines longer.

Consequences:

  • Bigger payouts per claim
  • Increased loss of rental income coverage claims
  • Higher premiums if buildings are underinsured

Don’t let your property fall behind on replacement cost valuations.

6. Tenant Behavior Has Changed Post-Pandemic

🧑‍💻 Remote Work = More Wear and Tear

More tenants staying home full-time during and after COVID-19 has led to:

  • Increased water and electric use
  • More appliance fires
  • Noise complaints and potential lawsuits

Encourage tenants to carry renters insurance and educate them on safety basics.

7. Cyber Liability Risks Are Emerging for Landlords

🔐 More Buildings, More Smart Tech

With more apartment buildings using smart locks, Wi-Fi thermostats, and online payment portals, there’s an uptick in cyber-related insurance claims.

Did You Know?

  • 18% of large property managers experienced a cyber breach in 2023
  • Ransomware and phishing attacks are now insurable under cyber liability policies

If you collect tenant data or use property management platforms, it’s time to assess your cyber risk exposure.

Key Takeaways for Apartment Owners

The Bottom Line:
The apartment building insurance landscape from 2020–2025 has been shaped by climate events, rising costs, and legal risks. Premiums are increasing, but proactive risk management can lower claims and keep coverage affordable.

✅ Actionable Tips:

  • Schedule annual policy reviews
  • Update property valuations to reflect inflation
  • Install leak detection and fire suppression systems
  • Require tenant renters insurance
  • Consider adding cyber and umbrella liability coverage

Final Thoughts

Understanding these apartment building insurance claims trends from 2020–2025 can help you make smarter decisions and protect your investment. The insurance market is evolving — and so should your coverage strategy.