Last March, a 103-year-old resident of a Sunrise Senior Living facility in Willowbrook, Illinois, went on a field trip to the movies. Ruth Smith, who used a walker, fell down two concrete steps in the theater and died about six weeks later. Now Smith’s estate is suing Sunrise, saying that aides did not properly watch her.

As the U.S. society ages, senior living communities are on the rise. So are claims and lawsuits against them. And when they lose, it is usually down to insurers to pay up.

“It’s a tremendous opportunity that has pretty specific challenges,” said Brendan Gallagher, who heads the senior care business at insurance broker Arthur J. Gallagher & Co.

Some senior living facilities could see insurance rate hikes in 2019 as high as 30 percent, according to insurance broker Willis Towers Watson.

Fewer insurers are offering coverage today than they were five years ago and some Lloyd’s of London members stopped writing the coverage during the past year, said John Atkinson, managing partner at Willis.

Some insurers are dropping coverage of those communities entirely while others are avoiding litigious locations such as Kentucky, Illinois and Florida, said insurers and brokers.

While the pullback threatens to raise costs for families, other insurers are expanding, betting on the industry’s strong growth prospects.

The number of people living in U.S. residential care facilities has grown by over 10 percent to 812,000 between 2010 and 2016, according to the most recent data from the U.S. Centers for Disease Control and Prevention.

As the industry gears up for the arrival of the graying 74-million baby boom generation, senior living facilities have grown even faster. The number of rooms in those centers has risen up by a fifth since 2013, according to the National Investment Center for Seniors Housing & Care (NIC), which collects data for the 99 largest U.S. metro areas. While aging is a global phenomenon and the U.S. society is relatively younger than those in Europe and north Asia, its greater dependence on senior centers confronts it with challenges other nations may yet have to grapple with.

More so than previous U.S. generations, today’s elderly often live far away from their children. In Europe, seniors tend to live much closer to their relatives or in communities that provide generous government services for the elderly. In many Asian and African communities, multiple generations commonly live together.

Not only do more people move into retirement communities, but they tend to do it later than they used to, resulting in more frequent and severe injuries, insurance professionals say.

“People are living longer and they are more frail,” said Gloria Holland, vice president of finance at Capital Senior Living Corp, a Dallas-based company that runs 129 communities across the country.

A spokeswoman for Sunrise Assisted Living, where Smith lived, said the company had policies and procedures in place to help promote resident safety. “Anytime we lose a member of our community we are deeply saddened,” she said.

Falls are the biggest risk. Allegations of falls account for nearly half of all assisted living claims that insurer CNA Financial Group closed in 2016 and 2017, the company said.

Another source of insurance claims are “memory care” centers, which cater to people with Alzheimer’s disease and other types of memory problems.

The nascent sector has grown 52 percent since 2013, according to NIC. A big issue there: residents who wander away.

Last year, the body of 77-year-old Audrey Penn was found in a ditch after she left a senior living community in Allentown, Pennsylvania. A lawsuit filed by her family settled for an undisclosed amount.

A Changing America

Capital Senior Living’s Holland said the average age of residents who moved to its facilities was between 78 and 80 when she joined the company in 2004 and has risen to between 82 to 84 by now. That makes individual claims more expensive to settle. The company anticipates a 5 percent rate increase when it renews its insurance in 2019, Holland said.

Higher rates and deductibles are more likely to affect smaller facilities, which may lack robust compliance programs for preventing accidents and other problems, insurers and brokers say. Smaller centers often “struggle to keep up with changing regulations,” said Caroline Clouser, who heads the healthcare industry practice at insurer Chubb Ltd.

Insurance premiums for senior facilities vary by state. Premiums for each assisted living apartment range from $150 to $600 annually, insurers and brokers say.

Insurance for those facilities makes up less than 1 percent of the $558 billion property and casualty insurers collected in net written premiums in 2017. Yet it is likely to grow as aging boomers fill up senior communities, industry insiders say.

Nationwide is among the companies that have been growing their senior living insurance business while being selective, said Jeremy Moore, senior living underwriting manager.

“You have to understand what the exposures are and the controls in place,” he said.

Nationwide has a team of former senior living executives and administrators who visit communities and look at everything from building maintenance to evacuation procedures, Moore said.

Wisconsin-based Church Mutual Insurance Company, which writes coverage for the industry in 49 states, is planning to expand into Florida, the remaining state, in 2019, according to Jim Ketterson, who heads the insurer’s senior living practice.

Brokers are also working to help senior living communities better manage their risk. Willis recently launched a program to help facilities learn how to more safely lift residents.

Willis also runs a webinar on active shooter events, including tips such using beds to block doors that do not lock, a common feature in memory care facilities.

Senior living companies also keep reviewing their facilities and procedures, they say. For example, Capital Senior Living is gradually replacing carpet flooring with laminate, which is less of a trip hazard, Holland said. It is also considering a technology that can help track residents’ movements to determine if they are at risk of a fall.