Texas HOA insurance

Started by JulieH4 • 17 replies • 642 views

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JulieH4
Posts: 75

Posted:

Hello all! I wish I had found this forum when I first started being the property manager for my neighborhood. You guys are awesome and I appreciate all the information.

Our HOA insurance covers the studs out of the 140 condo/townhomes here. In 2022, the total cost was $134,000. For 2023, the price went to $388,875. Is this normal? Is this happening everywhere? I know inflation has raised prices but 194% is ridiculous. The Board had to put out a special assessment and I have had so many complaints. The Board decided to change brokers after that increase to try to save money but we were told that because of hurricane season, we would not be able to get a better deal until next year. The new broker said they will save us money in 2024 but I'm nervous that we will have to raise our very reasonable HOA fees or have another huge special assessment next year.

Our property is 48 years old and in good condition. We have great contractors and are self managed (3 Board members and myself). I do not usually get many complaints, mostly about needing to cut back a bush or the trash company didn't take something.

Thank you for any input!

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By JulieH4 on 07/26/2023 11:47 AM

Our HOA insurance covers the studs out of the 140 condo/townhomes here. In 2022, the total cost was $134,000. For 2023, the price went to $388,875. Is this normal? Is this happening everywhere?

Today, this is normal. Yes it is happening everywhere. The states seeing the worst effects of climate change are seeing the biggest increases. The media has reported on this abundantly. This forum has seen a fair amount of discussion on this in the last year.

In Florida and California, many souls count themselves lucky to be able to even have insurance. Insurers are increasingly not renewing policies in these states. The insurers cannot afford to do so and stay in business.

Some HOAs are increasing their deductible and then adding a line item to their reserve studies in the amount of the insurance deductible.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Julie

Good bugeting/financial management is a result of proper dues versus Special Assessment. I say you should have raised your dues.

JulieH4
Posts: 75

Posted:

Quote:

Posted By JohnC46 on 07/26/2023 12:00 PM
Julie

Good bugeting/financial management is a result of proper dues versus Special Assessment. I say you should have raised your dues.

Thank you John! Yes, I became the property manager last year. We most likely will have to raise dues in 2024, especially if this insurance keeps up like this!

JulieH4
Posts: 75

Posted:

Quote:

Posted By ElleN on 07/26/2023 12:00 PM

Posted By JulieH4 on 07/26/2023 11:47 AM

Thank you Elle! I'm sure I haven't read that far down yet. We are blessed that we can still have an A+ rated company and that could also be why it skyrocketed. We have not made a claim in 7 years which is why it is upsetting. I could understand the rate jump if we had multiple claims or did not keep up our property well.

TristaJ (Texas)
Posts: 96

Posted:

In Texas also. It happened to us, too.

TristaJ (Texas)
Posts: 96

Posted:

In Texas also. It happened to us, too.

MichaelS56 (Minnesota)
Posts: 859

Posted:

Minnesota insurance is also rising quickly. We are predicting a 22% increase when our next renewal is due.

ElleN (Idaho)
Posts: 4,420

Posted:

Reports from Florida this past year of year-over-year triple digit (or more) percent increases for a condo association's insurance premiums:

https://www.wtsp.com/article/money/economy/condo-associations-hoa-insurance-rates/67-10fd6013-ced2-4ac9-869f-9be0822a6899

https://www.wfla.com/8-on-your-side/florida-condo-associations-property-insurance-spiked-nearly-1000-heres-why/

https://winknews.com/2022/12/01/the-factors-that-may-be-increasing-insurance-rates-for-florida-condo-associations/

https://www.fairwaypreservenaples.com/p/2023-Insurance-and-Dues-increase

KerryL1 (California)
Posts: 14,550

Posted:

Our coastal Calif high rise insurance went up 15% last year. Our agent voted our HOA's board meeting last night virtually and actually was very reassuring given we're not in any fire zones and have very few claims. He didn't make a sold prediction but the companies he works with still are committed to CA and he's optimistic ours won't increase much.

So there doesn't seem to huge increase everyplace. As with so much, it depends....

But, yes, Julie, might as well prepare your owners now.

JulieH4
Posts: 75

Posted:

Thank you all for your replies. I'm glad to hear it's not just here. I wish there was a way to reign that back though!

LoriM15 (Florida)
Posts: 1,009

Posted:

Here in Florida, we're lucky if we don't get cancelled. Our association insurance doubled in the last couple of years. The COA where we own a unit had to do a special assessment for insurance premium increases this year. Our master association condo sub-associations have not done special assessments for insurance, but they borrowed money to pay for the increased premiums over time.

Obviously you will have to increase your fees next year. I don't think you can count on saving much even with a new broker, so I would budget the same amount of increase for next year. Better than to have to do a special assessment.

JulieH4
Posts: 75

Posted:

Quote:

Posted By LoriM15 on 07/27/2023 11:38 AM
Here in Florida, we're lucky if we don't get cancelled. Our association insurance doubled in the last couple of years. The COA where we own a unit had to do a special assessment for insurance premium increases this year. Our master association condo sub-associations have not done special assessments for insurance, but they borrowed money to pay for the increased premiums over time.

Obviously you will have to increase your fees next year. I don't think you can count on saving much even with a new broker, so I would budget the same amount of increase for next year. Better than to have to do a special assessment.

Hi Lori,

I completely agree with you! We actually did a payment plan so we would not have to borrow money this year and we definitely do not want to do that again if we don't have to!

LaskaS (Texas)
Posts: 1,025

Posted:

julie, does your board have an independent insureance broker that represents only your condominiums.??

Our association for years was using the management company's(who we only use for accounting) preferred insureance broker.

This year, i was finally able to get the board to agree to engage an independent broker. our insurance went up only 8%. Had we stayed with the management companies broker and insureance policy, the price would have gone up %70.

ALWAYS ALWAYS engage your own independent broker.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

One should always "shop" for insurance. Best to begin with an Independent Insurance Agent.

JulieH4
Posts: 75

Posted:

Hello!

Yes, we have an independent broker that helps us. The one we had before did not get us this awful rate increase until the day we had to bind it. I am really hoping it goes down for next year!

BillH10 (Texas)
Posts: 1,217

Posted:

Julie

Your insurance will not go down next year or the year after that or any following year so accept that as a simple fact. The best you can hope for will be there is no increase or a very minor increase.

The weather events we have had in this state since 2021, coupled with inflation, means we will continue to have significantly larger year-over-year increases than we had in the several years prior to last year and this year.

The 2024 budget cycle will begin shortly. Ask your agent to give you a percentage figure for 2024 so it can be included in the budget. You may have to tell the owners in your association how the cow ate the cabbage with respect to assessment increases due to the increased insurance expenses. Do not reduce coverages in an attempt to placate owners and reduce expenses. Doing so could result in very costly messes if a Katria rolls through and you are underinsured.

JulieH4
Posts: 75

Posted:

Thank you Bill. I agree with you but I still have hopes!

I am hoping that the pesky hurricanes stay away this year too, I'm sure you are as well.

Thanks again!

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