Knowledge Center

If you manage a real estate portfolio in 2025, you've likely had this moment: you open your renewal proposal, see the new umbrella pricing, and stare at the page wondering if someone added an extra zero by mistake. 

Last year, you paid $400,000 for $100 million of excess liability protection. This year? Triple the price, and you're lucky to get $25 million. Forget full towers. Some carriers won't even play past $5 million anymore. 

This isn't a one-off. It's the same story echoing through boardrooms, client calls, and risk committees from New York to Newport Beach. Welcome to the implosion of the umbrella and excess market.

The Sky Didn't Just Fall, It Shrunk

Just a few years ago, it wasn't unusual to see multiple general liability carriers each willing to write $10 to $25 million in umbrella coverage. Today, lead carriers have scaled back to $2 to $3 million. That's not a typo. 

To put it bluntly: carriers are pulling back, limits are tightening, and premiums keep climbing. In some cases, umbrella rates jumped 20% last quarter. While for others, the increases feel closer to 300%. 

And if you're in real estate—especially multifamily, hospitality, or habitational—forget it. Many insurers have exited those sectors altogether. The few that remain are rewriting terms, cutting limits, and loading exclusions like Assault and Battery, Firearms, and Abuse and Molestation. Coverages that used to be taken for granted.   

So, What Happened?

It's not that insurers woke up one morning and decided to make life miserable for property owners. It's that the math stopped working.

The casualty market has been quietly bleeding for years. "Nuclear" and "thermonuclear" jury verdicts, those $20, $50, even $100 million awards, have blown through layers once considered untouchable. Third-party litigation funding has turned routine claims into seven-figure lawsuits. Social inflation has inflated everything except policy limits. 

Add to that inflation in construction costs, more catastrophic injury verdicts, and legal systems that often side with plaintiffs, and you have a recipe for underwriters pulling back. The result is a market that feels both cautious and constrained. As the latest market research shows, nuclear verdicts show no signs of slowing. 

In simpler terms, the umbrella is burning because the rain got radioactive. 

The Real Estate Squeeze

No one feels this crunch more than real estate portfolio owners. For decades, large property groups relied on risk purchasing programs and layered towers to achieve efficient pricing. They would buy into shared limits, build excess layers from multiple carriers, and walk away with $100 million or more in coverage.

Now, those same structures are collapsing. Carriers that once offered $25 million lines are now offering $5 million lines, if they participate at all. Even clean accounts with pristine loss runs are paying double-digit increases, averaging 10 to 20 percent across excess lines. 

When lenders, investors, and partners still require $50 to $100 million in limits, but the market only offers $25 million at triple the cost, something has to give. 

Some groups are filling the gap with captives or self-insured layers. Others are increasing retentions and layering through non-admitted markets. But for many, it's a wake-up call that the days of cheap excess protection are gone. 

A Shift in the Broker's Role

As an owner or CFO, this is where your client advisor, with their deep industry knowledge and strategic insights, truly earns their keep. 

In today's market, the differentiator isn't who can get you a quote. It's who can re-underwrite your portfolio. That means breaking down each property, highlighting risk controls, and presenting data the way an underwriter would. It's storytelling backed by analytics, showing how your fire protection systems, tenant mix, and security protocols make you a better risk than the market assumes. 

It also means knowing when to negotiate, when to restructure, and when to get creative. Some client advisors are blending admitted and non-admitted capacity, leveraging reinsurance softening, and even forming pooled structures for clients who qualify. 

Where We Go From Here

There's cautious optimism that pricing could stabilize in 2026 as new capacity re-enters and reinsurers regain appetite—but no one's betting their umbrella on it. 

The reality: the casualty market is still digesting years of poor loss ratios, social inflation isn't slowing, and capital always chases profitability. That means higher attachment points, smaller towers, and tighter terms are the new normal for now. 

But maybe this shake-up isn't all bad. It's forcing the industry to evolve. It's pushing client advisors to get smarter, buyers to get more strategic, and carriers to underwrite with more transparency. 

The Takeaway

The great umbrella collapse isn't just a pricing story. It's a re-pricing of risk itself. 

For property portfolio owners, the way forward isn't about waiting for the storm to pass. It's about proactively building your own coverage architecture that's resilient, data-driven, and forward-thinking. 

Because if the sky is shrinking, the smart players aren't running for cover. They're learning how to build stronger roofs.