Renewing insurance policies has gotten more headache-inducing now that many insurance providers are reducing the coverage they provide. But you can still make it work, according to the National Multi Housing Council (NMHC). The 2005 hurricane season set a record for the amount of insurance losses, at an estimated $46 billion. The outlook for 2006 forecasts 17 storms, five of which are expected to be “intense,” according to the trade organization.

In a recent conference call sponsored by NMHC, risk managers said apartment portfolios with catastrophic exposure, including those located in California, Florida, and the Gulf Coast, have been hit by price increases of up to 400 percent for some layers of financing. Other areas are experiencing increases of up to 15 percent in their insurance costs and some are even seeing no increases at all.

Adding properties in catastrophically exposed areas to an existing insurance program is getting costlier, according to NMHC.

For one apartment management firm, the cost to add a new Florida property more than doubled from $500 to $600 per unit to $1,500 per unit in March.

Some risk managers said a bigger problem than pricing is the fact that insurance carriers are limiting their coverage. Having to add extra layers of insurance from other carriers to make up for that restriction is resulting in up to 67-percent cost increases for many renewals. Managers also predicted that the high-cost situation won’t improve for the next 24 months.

John Randles, executive vice president and chief financial officer for Fogelman Management Group, LLC, participated in the NMHC discussion.

“I listened in on the conference call and talked with others in our industry who had just renewed their policies,” said Randles. “So we knew [the price increase] was a possibility.”

In May, Randles placed a new insurance policy on 16 of his company’s 45 properties, which are located primarily in the Southeast. Last year, the properties were insured by two carriers.

However, the second carrier now will not cover more than $5 million in earthquake damages. Randles had to find a third carrier to fill the gap, resulting in a $200,000 increase in premiums, which is twice as much as he paid last year.