Property Insurance

Hello, Our property insurance has gone from $59,000 annual premium to $245,000 annual premium. Our property management company gave the Board 30 hours notice of this increase. Anyone else have a similar story??
Our homeowners are demanding that we NOT increase their dues? Your advice? Christine

If you've seen any of the recent comments versatility n s on this site over the last 6 months, you've seen many of them are on master insurance coverage and how the increases are eye popping, to say the least. At least you weren't dropped - yet (some companies are leaving entire states).

I dont know what the 30 hour notice is about- are you sure that wasn't a 30 DAY notice?

Anyway, you need to speak to the insurance company to find out the reason for the increase. Spoiler alert- you'll likely hear about increasing costs related to insurance payouts due to natural disasters like tornados, wildfires, hurricanes and so on. You may also need to take a look at your claims history. Just like your car insurance, your premiums will increase if you have too many, and sometime it only takes one.

Get the numbers and then talk to the agent about what you can do to reduce the risk and the costs. A comprehensive risk assessment may help identify areas where you'll need to make changes. For example, if you have a community pool, you may need to make a hard decision on whether you can still afford to have it. They're nice to have, but the upkeep is high and it's a magnet for possible lawsuits if someone slips and falls or a kid drowns.

Maybe you should consider increasing the deductible. That will mean adjusting your budget to ensure you have that amount on hand. It may also mean some areas covered by the association will need to be handed over to the homeowners, which will require that the documents be amended. Which requires homeowner approval.

9nce you look at all your options, have a come to Jesus meeting with the homeowners where you show them the numbers and options, then they can consider what they're willing to do. Unfortunately, avoiding assessment increases isn't one of them. Costs are increasing everywhere and if your board hasn't been keeping up with inflation, this is what happens.

Not an easy choice, so do the best you can and be honest with the homeowners- they may not like what they hear and threaten to recall the board, but that may or may not bring on another set of problems. That said, encourage their suggestions - someone might come up with something no one's considered.

PS - take a good look at your reserves. I suspect many insurance companies are going to look at its health and if they don't like them, you risk getting dropped. That means you have an updated reserve study and have been funded it according to the recommendations. Establishing and following a good maintenance schedule may not hurt. Good luck!

I can understand the 30-hour notice. Each year our agent has a hard time getting us liability insurance and we only get a day or two notice of the combined final policy premium.

We sat down with our broker to figure out a way we could raise the deductible on a some of our property, since our recent experience showed they aren't going to pay for those items if we have a loss. These were things like coverage for landscaping and trees, pool equipment and a few other things. The problem is we would have to change our declaration, because it states we must have full coverage. The broker told us almost every community in the area has tried the same thing, but are being held back by language in their documents. We are going to try and drop some wind coverage on things that never blow down, however.

There was a great story in the New York Times this week about how all states are feeling the pain of insurance increases, not just Florida, Texas and Louisiana. It's already a crisis here, but clearly it's spreading over the country.

In addition to educating owners about how condo insurance works, you should point out to them that without insurance, they will become *jointly, personally liable" to pay for damages and injuries in the event of an uninsured loss.

Condo insurance typically does not cover just these things. Your governing documents may also require you to carry Fidelity (aka. Employee Dishonesty) coverage, Directors & Officers insurance, and (depending on your state) workers compensation coverage.

The first protects you if someone embezzles association funds. The second provides coverage in the event the board is sued for actions that they've taken in the course of their duties. No one should serve on an association board without this coverage. Finally, the workers comp can cover injuries sustained by volunteers who get hurt while doing work for the association.

Boards everywhere are facing the problem of rising premiums (or losing their coverage altogether). What some owners don't realize is that they either insure their property or they pay out of pocket for any losses. And if the association can't afford the higher premiums, they will adjust the coverage. For example, they may raise the deductible - and condo owners are responsible for paying the deductible if there is a loss. It all comes out of the owners' pockets one way or the other.

(Too few buyers consider things like insurance when they buy their homes. They figure if they can afford the fixed mortgage, they're good to go - not realizing that all other costs go up.)

Apologies, I skimmed the posts and missed that LoriM had already mentioned this. - Bill

CC&Rs for my HOA and perhaps all state that a "duty" of the Assoc. (Board) is to provide insurance.

How does an HOA increase assessments when Our state law says we can only raise assessments by a small percentage according to our PM.
The insurance premium increase is out of control and insane. That could break many homeowners. What is the significant reason behind these
ghastly increases other than targeted areas like N central Cali, the mid west and tornadoes and the south with hurricanes that most insurance
companies no longer cover on a standard policy?

A handy excuse to raise rates.

Our association just had a major increase back in February. We shopped around with several other companies and NO other company would insure us.

Our Current company did offer us a policy but we had to increase our deductible from 10k to 50k.
A notice was sent out to homeowners on this luckily we had enough in reserves to cover the difference for now. But we will most likely be doing a assessment soon to offset that cost and a few other projects we are considering.

Home owners were advised to up their coverage as well. Plus first floor units were also advised to have water and sewer back up protection as well.
My policy when i bought in 2015 was $191 in 2022 it was $225. Now its $783. Even with 3 smart flood and freeze sensors installed tied into my alarm system.

Last year we had 2 major plumbing claims in sperate buildings. 1 in the winter with 3 broken pipes during a cold snap on the same night.
The second in May of a collapsed main drain pipe under a concrete slab in my building under my unit, That pipe serves multiple units.

Age of buildings plays a huge factor in determining rates.

that's the BOD's fault then. Why didn't the BOD raise hell 60 days before and then 45 days before and 30 days before? Sounds like no one on the BOD took responsibility to make sure it got done. Takes 1-2 hour to get a few quotes from insurance companies.

you had 90 days to get it done and dropped the ball and blamed the mgt company at the last minute

I agree. They ignored it until it became a problem.