Increases in property and professional liability insurance costs are major contributors to runaway operating expenses for long-term care providers, according to results of the latest Executive Survey Insights report, released Thursday by the National Investment Center for Seniors Housing & Care.
Increasing operator expenses were the most-cited challenge facing respondents, with more than 90% of participants citing them, and answers to survey “questions on property and professional liability insurance emphasize the sentiment,” NIC Senior Principal Ryan Brooks wrote.
The Wave 46 survey includes responses from Sept. 19 to Oct. 16 from owners and executives of 58 small, medium and large senior living and skilled nursing operators from across the country.
“Market conditions, overall macroeconomic environment, inflation, COVID-19 and insurers dropping out of the market resulting in less competition are all among the reasons cited by respondents for the increase in property and professional liability insurance,” Brooks said.
Between 82% and 84% of operators across all care and service segments — independent living, assisted living, memory care and nursing care — responded that their property insurance rates had increased — either slightly or significantly — compared with before the pandemic. Forty-two percent of independent living operators responded that their property insurance costs had “increased significantly,” followed by nursing care (38%), assisted living (30%) and memory care (25%).
By comparison, 18% of independent living and assisted living operators, 17% of memory care providers and 13% of skilled nursing respondents said that their property insurance rates had “decreased significantly.”
When it comes to professional liability insurance, 68% of memory care providers and 66% of assisted living operators reported that their premiums have increased slightly or significantly, followed by 58% of independent living operators and 52% of nursing care operators.
None of the respondents reported a decrease in those costs from before the pandemic, but some said they had seen no change at all. Forty-eight percent of nursing home operators responded that their professional liability rates had remained stable, followed by independent living (42%), assisted living (34%) and memory care (42%).
For more coverage of the Wave 46 report, see McKnight’s Senior Living.
