Why Condo Association Insurance Costs Keep Rising

If you are on the Board of a condominium association, you have probably experienced the same shock many communities are facing right now: insurance renewals are increasing dramatically, even for buildings with few or no claims.

Over the last few years, the insurance market for associations has changed significantly. Carriers are becoming more cautious due to aging buildings, severe weather, rising construction costs, water damage claims, and large fire losses across the country. We are also seeing more carriers requiring inspections and requesting updates to roofs, electrical systems, plumbing, and building maintenance before they will even offer coverage.

At AGH Property Management, we spend a lot of time shopping insurance policies for our associations, and to be honest, we are probably every broker’s nightmare. We ask a lot of questions, compare every proposal carefully, and look far beyond just the premium number. A cheaper quote does not always mean better coverage.

We review:

• Deductibles

• Water damage limitations

• Replacement cost coverage

• Claim handling reputation

• Inspection requirements

• Reserve requirements

• Financial strength of the carrier

• Exclusions hidden in the policy language

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Sometimes two proposals may look similar at first glance, but once you dig into the details, the cheaper policy may expose the association to much higher risk later.

One of the best things Boards can do to help stabilize insurance costs is to stay proactive with maintenance. Roof repairs, plumbing upgrades, electrical improvements, and proper building upkeep all make a difference when underwriters evaluate a property.

Insurance is becoming one of the largest expenses for many associations, and it is no longer something Boards can renew on autopilot. Taking the time to properly review the market, ask the right questions, and understand the coverage is more important than ever.

Adina Gherman , Founder & CEO