Condo and HOA Insurance Increases: What’s an HOA Board Member to Do?

Florida’s insurance rates continue to skyrocket, both for individual homeowners as well as for HOAs and condo associations. As insurance companies force HOAs to pay significant premium increases and larger deductibles, the HOAs must pass the cost increases on to residents, either in the form of increased dues or special assessments. Salaries are not keeping pace with the cost of insurance increases, creating an affordability crisis for homeowners. Many homeowners are scared and angry, especially those on a fixed income.

Why are Insurance Costs Rising So Much Now?

Florida is facing a confluence of factors causing rising insurance rates:

• Hurricanes hit more frequently and with greater ferocity than in the past. Since 2017, Florida has experienced four named hurricanes: Irma, Michael, Ian and Idalia. Three of these, Michael, Irma, and Ian, are among the costliest hurricanes ever in Florida, costing $29 billion, $59.5 billion, and $84 billion respectively[1].
• The US as a whole is experiencing a period of rapid inflation, causing the cost of building materials and construction to spike.
• Rising interest rates increase costs for insurance and reinsurance companies that need loans.
• Fewer companies sell insurance in Florida than in the past, with several major companies exiting the state, such as Farmers, and other companies declaring bankruptcy. In fact, the insurer of last resort, Citizen’s Property Insurance, is now the state’s largest insurer.

Individual HOAs and condo associations can’t impact these macro-level trends, but that doesn’t mean there is nothing you can do to help your HOA. Following are five tips that may help you secure a somewhat lower insurance rate:

• Shop around for insurance well in advance of your renewal date. You may find other providers that are more competitive than your current one.
• When you are shopping around, research the impact of different deductible levels on your premium. The caveat to this is that you need to ensure that your HOA can afford to pay the deductible if necessary.
• Check with your broker to see if there are upgrades that you could make to your property that would provide you with insurance credits to lower your premium, while increasing the value of your HOA. For example, if you installed hurricane impact windows or hired a 24-hour security guard, would that lower your deductible?
• Similar to the last point, ensure your insurance company has current information on your property. Your insurance company can provide you with a fairer price if they are aware of any upgrades that you have made.
• Make sure you are up-to-date with your milestone inspections. Insurance companies will avoid covering properties that are out of compliance with these mandated inspections.

Buying insurance for an HOA in Florida is challenging. For now, the most prudent course of action is to take steps to reduce your premium as much as you can, while preparing for high insurance costs for the foreseeable future.

Consolidated Community Management (CCM) is a full-service property management company specializing in condominium and homeowner association management in Broward and southern Palm Beach Counties.  We are committed to working together with community Boards of Directors to develop management plans tailored to the unique requirements of each community and their residents.

CCM provides a quality of service that is unique to our industry and consistently delivers a distinct competitive advantage.  Our concentrated, extensive local presence and knowledge of community associations results in lasting partnerships and superior service.  We have built our industry reputation on employing the best in the business and assigning only a limited number of properties to each Property Manager Team.

Our team at Consolidated Community Management provides expert property management services at competitive prices.  Contact us today by calling (954) 718-9903 or clicking on ccmfla.com.

[1] News-Press. 5 costliest hurricanes ever to hit Florida: How Hurricane Ian ranks (news-press.com). Accessed October 30, 2023.