Commercial property insurance buyers will continue to see higher prices in 2021, with rate increases in the high-single digits to 15% range even on clean accounts, Risk Placement Services Inc. said in a report Tuesday.

Rate increases on loss-hit accounts will be even higher, the Rolling Meadows, Illinois-based excess and surplus lines broker and managing general agent unit of Arthur J. Gallagher & Co. said in its 2021 U.S. Property Market Outlook.

Every commercial insurance buyer will feel the effects of the firming property market, whether through higher premiums, less capacity, stricter terms, or all three, RPS said in a statement accompanying the report.

Rate hikes are due in part to the trickle-down effect of higher reinsurance costs that are being passed on by insurers, RPS said in the report.

Insurers saw rate hikes upwards of 10% to 15% to renew their treaties at year-end 2020 on top of midyear rate increases averaging 25% to 35%, RPS said.

Reinsurance will “play a larger role in rates, capacity and terms as carriers continue to improve their book composition and move towards the use of ‘technical pricing,’” Wes Robinson, national property brokerage president of RPS, said in the statement.

Although reinsurance rates have climbed precipitously, “the losses have not let up, so many carriers are still not making money,” Mr. Robinson said.

The property market has also been affected by climate change, RPS said in the report. More than 800 wildfires in California, Oregon and Washington burned close to six million acres and destroyed thousands of structures, causing billions of dollars in insured claims in 2020, the report said.

In response, the standard property markets pulled out of wide swaths of California, and while the E&S market is available to cover many of these losses, premiums are “much higher than most insurance buyers are willing to pay,” RPS said.

Recent losses from tornadoes and convective windstorms in the Midwest have also exceeded insurers’ expectations, leading to double-digit rate increases and restrictions on capacity, the report said.

Last year’s Atlantic hurricane season was also especially active with 12 hurricanes making U.S. landfall, RPS said.

Capacity will be especially tight for buyers in catastrophe-prone coastal regions and in parts of the Midwest, requiring many to layer coverage from multiple insurers to get the excess limits they need, the report said.

Other terms and conditions of note in the wake of COVID-19 include new communicable disease and riot exclusions, and more restrictions on time element, ingress/egress business interruption cover, it said.

These restrictions should be watched for especially on vulnerable classes of business like dine-in restaurants and those with storefronts, RPS said.