Chicago’s North-Side bungalow and “Ma-and-Pa” apartment owners complain they are overwhelmed with a tsunami of skyrocketing insurance costs that hit in 2023 and 2024. The lofty insurance increases, which come on top of Chicago’s soaring North Side real-estate taxes, adds another layer of operating-cost expenses. Toss in all the inflation of the last few years and it’s suddenly gotten a lot more expensive to live. Experts predict that sharply higher property-tax assessments-scheduled to hit in Aug. 2025 when the second installment of 2024 tax bills arrive-along with soaring insurance costs, will financially burden property owners.

Apartment landlords say these catapulting costs will have a major impact on budgeting for spring 2025 apartment rent increases, which could hit double-digit levels in some lakefront neighborhoods.

A spot survey by the Home Front column revealed the following examples of hefty building fire-and-liability insurance premiums this year: · Lincoln Park. A shocked owner of a vintage red-brick, mixed-use 4 unit building recently saw his insurance bill zoom a whopping 48.3% to $4, 014 from $2, 706 in 2023. The commercial policy carries a $10, 000 deductible.

· Old Town. On Dec. 1, 2024, the owner of a historic red brick 6-flat saw the insurance bill jump a hefty 36.7% to $5, 336 from $3, 902 in 2023. One nit-picking potential insurer refused coverage on the well-maintained building because it had vines growing on the facade. The policy carries a $10, 000 deductible.

· Logan Square. A greystone 4-flat owner was surprised when his 2024 insurance bill rose 23.2% to $4, 809 from $3, 909 in 2023. After shopping around, the resident owner found an insurance company willing to write a new, more affordable policy for $4, 070-a savings of 15.3%. The new policy carries a $2, 500 deductible.

· North Lincoln Square. On Jan. 25, 2025, the owner of a yellow brick 4-flat will see his insurance bill rise 11.1% to $3, 347 from $3, 012 in 2023. The commercial policy carries a $5, 000 deductible. · Edgebrook. On Dec. 10, 2024, the owner of a modest 3-bedroom singlefamily brick ranch home received a 2025 insurance bill for $1, 975, up 30.5% from the $1, 513 paid in 2024. After shopping around, the homeowner received a quote for comparable insurance from another company for $1, 311. The basic residential homeowner’s policy carries a deductible of $1, 500.

None of the properties surveyed has had a claim in the past two decades.

The Home Front column reached out to several insurance company executives to ask about the state of the market. Virtually all pointed to “climate change” as the cause for a shift in insurance costs nationwide. It’s a convenient excuse.

Hurricanes, wild fires, tornadoes and earthquakes may not be hitting Chicago’s North Side, but Windy City home and apartment owners are paying a share of the disasters from coast to coast. Meanwhile, hundreds of Chicagoans are still struggling with water damage from flooded basements caused by heavy 2024 spring rains.

“The insurance industry is dealing with massive losses from wild fires in California, tornados in the Midwest, and hurricanes and flooding in Florida, the Carolinas and along the Gulf and East coasts,” a Chicago insurance agent said.

While wildfires, tornados, hurricanes and flooding are annual occurrences, there’s no simple solution to the climatechange being blamed for rising prices. A combination of sweeping economic trends-from labor shortages, inflation, higher reinsurance and rebuilding costs- along with more costly and uncertain extreme weather events simply are driving up premiums, experts say.

What is worse, insurers are passing these soaring costs to consumers with higher rates and more restricted coverage. In some states, insurers have stopped issuing new policies altogether. There, risk-prone areas are now referred to as “insurance deserts.” Also, the federal government has been slow to approve expanded emergency FEMA payouts to help property owners rebuild their lives and properties.

According to AM Best, a global creditrating agency, underwriting losses among U.S. property insurers totaled $47 billion in 2022 and 2023 alone. As a result, property insurance premiums have risen by more than 30% since 2020.

Still, the property and casualty insurance industry in the United States made a record $88 billion in profit in 2023, which was more than double the previous year’s profits. In the first quarter of 2024, the industry’s profitability continued to increase, reaching $39 billion, which could put the industry on track to surpass 2023’s record profits.

Another trend is that thousands of Americans are continuing to move to more risky areas that are more vulnerable to severe storms.

Generally, losses are routinely subsidized by policyholders everywhere, even if residents who reside in the riskier zip codes pay the most.

Another new trend in the artificial-intelligence driven insurance market is that rates are often set via algorithms. Most agents don’t even bother to put feet on the ground to tour the property, which they view via satellite or an Internet-based subscription service.

Here is what every homeowner should know about insurance protection: · HO-3 policy. This is the basic vanilla insurance policy the average homeowner buys. It offers various coverages for your house, personal property and personal liability. If your area has special hazards, such as flooding, wind, hail and wildfire, standard homeowner policies often limit or even exclude coverage for those risks.

· HO-6 policy. This standard condominium insurance policy provides “studsin” coverage for fixtures, finishes and appliances.

· Full replacement-cost coverage.

Buy this insurance if you can. Be wary of “functional replacement” coverage. Instead of original materials, you may get cheaper substitutes.

· Extended-replacement coverage. This more expensive coverage will make carriers pay to rebuild your home even if the loss exceeds your policy’s stated home value.

· Shop around. Don’t rely on your current agent. Another independent broker may find you a better deal. For example, an Avondale three-flat resident owner paid an insurance bill of $4, 974 in 2022 and again in 2023.

In 2024, the owner moved his growing family to a larger luxury rental apartment and purchased renter’s insurance. Then, the non-resident insurance bill on their three-flat jumped an astronomical 58.2% to $7, 872. At renewal time, the 2025 bill rose 2.8% to $8, 092.

In late 2024, the economy forced the owner to move his family back into his owner-occupied three-flat. After shopping around, the owner locked in a new 2025 resident-owner policy with a different insurer for $2, 934. The new policy has a deductible of $5, 000.

· Banks are not your friend. Do not let lenders buy insurance for you. Banks usually demand mortgage holders to carry insurance. If you let your policy lapse, or it is deemed insufficient, an expensive lenderplaced, or “forced policy,” doesn’t protect your home. It protects the bank’s loan.

For more housing news, visit www.dondebat.biz. Don DeBat is co-author of “Escaping Condo Jail,” the ultimate survival guide for condominium living. Visit www.escapingcondojail.com.