The property insurance market has reached a point of stabilization after years of volatile rate hikes and financial losses. However, external threats — especially those posed by natural disasters — continue to challenge property owners and insurers alike.

The increasing frequency and severity of extreme weather events, coupled with inflationary pressures and shifting geographic risk zones, have made risk management more critical than ever.

For example, a building insured for $3 million may now require more than $4 million for reconstruction due to inflation, supply chain disruptions, and escalating costs of materials and labor. Without regular property valuations, policyholders may find themselves facing significant out-of-pocket expenses if a claim exceeds their coverage limits.

Managing property risk is no longer about reactive solutions; it requires a proactive, data-driven strategy. From accurate property valuations to leveraging advanced event monitoring technologies, advisors must encourage property owners and businesses to take decisive action to mitigate vulnerabilities and secure insurability. Here’s what your property stakeholders must focus on to navigate the evolving risk landscape.

One of the most significant issues to emerge in property insurance over the past several years is undervaluation. Many properties have been historically underinsured, leading to inadequate coverage when disasters strike. In high-risk areas, rising property values have made this problem even more pronounced.