Multifamily insurance calculator: what your program is doing to NOI, value, and DSCR.
Insurance is the fastest-moving line on a multifamily operating statement and the only one you can materially change in sixty days. It is also the one owners size in dollars instead of in cap-rate value. Put your numbers in and see both.
- Cost per unit, % of EGI, and % of opex
- Value created or destroyed at your cap rate
- DSCR and the premium increase that trips your covenant
- Wind deductible, coinsurance, and loss-of-rents exposure
No email required to see your results. Nothing is transmitted until you ask.
Step one
Your portfolio
Six numbers off your last operating statement. It all runs in your browser, with no account. Nothing leaves your browser until you click Email this result or ask for a review further down.
Prefilled with an example portfolio, not a benchmark. and enter yours.
Advanced — debt, deductibles, valuation (optional)
Each of these unlocks a section below. Leave anything blank and that section stays hidden rather than guessing at a number for you.
Step two
Where you stand
The ratios an underwriter, a lender, and your asset manager all look at first.
Insurance per unit
$600
Premium ÷ units. The number carriers and buyers quote back at you.
Insurance % of EGI
3.9%
Premium ÷ effective gross income.
Insurance % of opex
10.7%
Premium ÷ total operating expenses.
Operating expense ratio
36.8%
Total opex ÷ EGI.
Effective gross income
$3.81M
Gross potential rent × occupancy, plus other income.
Net operating income
$2.41M
EGI − total operating expenses.
Implied value at 7%
$34.4M
NOI ÷ cap rate.
Break-even occupancy
34.6%
Opex ÷ gross potential rent. Add debt service for the levered figure.
Illustrative estimate only, based solely on the numbers you entered. This is not a quote, rate indication, coverage recommendation, or offer of insurance. Actual premiums, deductibles, and settlements depend on underwriting and policy wording.
What most operators never calculate
Your insurance program is capitalized at $2.14M.
Insurance is an operating expense, so every dollar of it comes straight out of NOI — and NOI is what gets capitalized into value. At a 7% cap rate, one dollar of annual premium carries $14.29 of asset value. Your $150,000 premium is holding $2.14M of it off your balance sheet, or $8,571 per unit.
Premium ÷ cap rate. The same arithmetic your buyer will run.
Step three
What a renewal is worth
Move the premium and watch NOI, value, and coverage move with it. Both directions — a renewal increase destroys value exactly as fast as a reduction creates it.
Cutting the premium 15% saves $22,500 a year and adds $321K of value — $1,286 per unit.
Premium at renewal
$127,500
Current premium × 0.85.
NOI
$2.43M
Premium change flows to NOI dollar-for-dollar.
Change in value
+$321K
−Premium change ÷ cap rate.
Per unit
+$1,286
Change in value ÷ units.
Step four
Against the exit cap
The same premium change is worth more the tighter the cap rate. Value impact of each premium move, across cap rates around yours.
| Premium | 6.5% cap | 7.0% cap | 7.5% cap | 8.0% cap |
|---|---|---|---|---|
| -20% | +$462K | +$429K | +$400K | +$375K |
| -10% | +$231K | +$214K | +$200K | +$188K |
| 0% | — | — | — | — |
| +10% | -$231K | -$214K | -$200K | -$188K |
| +20% | -$462K | -$429K | -$400K | -$375K |
Each cell: −(premium × change) ÷ cap rate. Your cap rate column is 7%.
Step five
What the premium doesn't cover
Cost of risk is not just premium. These are the exposures that sit behind a program and only show up at claim time — sized against this portfolio.
Percentage wind / hail deductible
Add your largest building's insured value and its wind/hail deductible percentage to see the dollars you're actually retaining, in months of NOI.
Coinsurance / insurance-to-value
Add the insured value you carry and today's full replacement cost to test whether a coinsurance or margin clause would cut your claim check.
Loss of rents
Add your loss-of-rents limit and a realistic rebuild period to see how many months of income the limit actually funds.
Lender covenant headroom
Add annual debt service to see how large a premium increase your DSCR covenant can absorb before you trip it.
Keep this
Take it with you.
Print it for the asset management meeting, or copy the link, which reopens this page with every input filled in. Or have the per-unit and percent-of-EGI ratios and the capitalized-insurance line emailed to you.
Methodology
Every formula on this page
- Gross potential rent
- Units × average monthly rent × 12.
- Effective gross income
- Gross potential rent × economic occupancy + other income.
- Net operating income
- EGI − total operating expenses (insurance included).
- Value
- NOI ÷ cap rate. Direct capitalization, no growth or reversion assumptions.
- Capitalized insurance
- Annual premium ÷ cap rate.
- Value per premium dollar
- 1 ÷ cap rate.
- Change in value
- −(premium × premium change) ÷ cap rate.
- DSCR
- NOI ÷ annual debt service.
- Covenant breach point
- (NOI − covenant × debt service) ÷ premium, as a fraction of current premium.
- Wind deductible
- Building insured value × deductible percentage.
- Coinsurance payout ratio
- Insured value ÷ (replacement cost × coinsurance percentage), capped at 1.
- Loss of rents required
- (EGI ÷ 12) × indemnity months.
Direct capitalization is a screening tool, not an appraisal. It assumes the premium change is permanent and that nothing else in the operating statement moves. Real renewals arrive with deductible, sublimit, and valuation changes attached, which is why the sections above matter as much as the premium line.
Why operators underprice their own insurance decisions
Ask an owner what a $75,000 premium increase costs and you'll get the right answer in cash and the wrong answer in value. The cash answer is $75,000 a year. The value answer, on a portfolio underwritten at a 7% cap, is about $1.07 million — because the expense is permanent, it lowers the NOI a buyer capitalizes, and it shows up in every appraisal, refinance, and sale from that point forward.
That asymmetry is why insurance gets managed like a bill and not like an asset. Renewal season is short, the increase looks survivable against a budget, and the decision to roll over with the incumbent carrier costs nothing today. Priced against value, the same decision is frequently the largest single move available on the property that year — larger than a rent bump the market won't support or a capex project that takes eighteen months to earn back.
Multifamily took the worst of the 2019-2024 repricing: premiums rose sharply, standard carriers retreated from habitational general liability, and renewals started arriving with percentage wind and hail deductibles and assault-and-battery sublimits attached. That market has turned. Commercial property renewals moved -6.3% in Q2 2026, and the rate barometer forecasts -7.4% for Q3 2026, while general liability (+2.0%) and umbrella (+4.7%) are still rising. A program that simply rolls over keeps the hard-market deductibles and sublimits and captures only part of the property relief. A softening renewal is the cheapest time to fix both.
The calculator above is built to make that comparison in the terms you already underwrite in. It also sizes the parts of a program that don't appear in the premium at all — the retained deductible, the coinsurance haircut, the loss-of-rents limit that runs out before the building is rebuilt — because those are usually where a cheap-looking renewal turns expensive.
If your loan has a debt service coverage covenant, a higher premium also cuts NOI. Read how a premium increase affects your DSCR covenant before you renew. If you have a large portfolio with steady general liability losses, our captive insurance calculator shows whether a group captive is worth a closer look. For Section 8, HUD, and LIHTC properties, where subsidy and lender rules shape the program, see affordable housing insurance.
Common questions
How does insurance affect NOI and property value?
Insurance is an operating expense, so every dollar of premium reduces net operating income by a dollar. Under direct capitalization, value is NOI divided by the cap rate — so a dollar of annual premium carries roughly $14.29 of asset value at a 7% cap, or $16.67 at 6%. A $100,000 premium reduction on a portfolio valued at a 7% cap adds about $1.43 million of value.
What is a normal insurance cost per unit for multifamily?
Insurance cost per unit per year is the metric carriers, buyers, and asset managers all quote, and it rose sharply between 2019 and 2024 as habitational capacity left the market. The right benchmark depends on construction type, roof age, catastrophe exposure, loss history, and state, so a single national average is close to useless. What matters more is whether your number moved because the market moved or because your program stopped being marketed.
How do I calculate the value impact of an insurance premium increase?
Divide the annual premium increase by your cap rate. A $60,000 renewal increase at a 7% cap is roughly $857,000 of value destroyed, because the higher expense permanently lowers the NOI a buyer will capitalize. This is why a renewal is an asset-value event, not just a budget line.
How does insurance affect DSCR and my loan covenants?
Premium comes out of NOI, and DSCR is NOI divided by annual debt service, so a premium increase lowers DSCR directly. On a leveraged deal the covenant headroom can be smaller than owners expect: the calculator above solves for the exact premium increase that drops you to your covenant, which is often well inside the range this asset class has been renewing at.
What is a percentage wind or hail deductible actually worth?
It is retained risk, priced at zero on your statements. A 5% wind deductible applies to the insured value of each affected building, not the portfolio — so a $30 million building carries a $1.5 million deductible you fund yourself before the policy responds. Sizing that against monthly NOI usually changes how an owner thinks about a deductible buy-down.
Why does insurance-to-value matter if I never have a total loss?
Because a coinsurance or margin clause tests your limit against replacement cost on every claim, not just total losses. If you carry 85% of what the clause requires, covered losses pay at 85%. Replacement costs rose faster than most schedules of value were updated, which quietly created this gap on a lot of otherwise well-run programs.
Carrying a percentage wind deductible?
It applies to each affected location's insured value, so one storm applies several. Size what you actually retain across the schedule.
Wind & hail deductible calculatorIs your limit still enough?
See the exact payout on a real loss, not just the full-loss haircut above — and what it takes to cure the gap.
Coinsurance penalty calculatorLooking for the program, not the math?
Habitational property, general liability, and umbrella for owners and operators of 50 to 10,000+ units.
Multifamily & apartment insuranceFree renewal review
Have someone read the program behind these numbers
The calculator prices the premium. It can't tell you whether that premium is right for the risk — that takes your loss runs, your schedule of values, and what the habitational market is charging accounts like yours this quarter. Send the program over, or just the renewal date.
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