How Community Associations Can Navigate Rising Insurance Premiums

Is your community association experiencing difficulties with insurance costs and coverage? You're not alone. Fewer insurers, stricter scrutiny, and escalating disasters are causing associations to face soaring premiums, higher deductibles, and shrinking community associations insurance coverage. Insurers are becoming increasingly selective, particularly in high-risk areas or for those with a history of claims. Prepare for intense property condition checks — lax maintenance could mean higher costs or no coverage at all. 

Rising disaster frequency pressures insurers, leading to costlier and limited insurance for community associations, especially in high-risk areas. Ignoring these changes is dangerous. Protecting community finances requires proactive risk assessment and diligent property upkeep.

Sahouri’s dedicated solutions for community associations insurance help boards evaluate, adapt, and protect their communities with confidence.

What You Will Learn

• Fewer Carriers, Higher Premiums
• Structural Integrity and Disaster Preparedness Under the Microscope
• Understanding What’s Covered — And What’s Not
• What Associations Can Do Now
• The Sahouri Solution: Advocacy for Communities

Fewer Carriers, Higher Premiums

The DC Metro area is experiencing rising homeowners association (HOA) insurance premiums due to several region-specific factors: urban density and aging infrastructure, an increase in severe weather events, high litigation rates, and a limited number of insurance providers. Many condominium and HOA communities in the District of Columbia (DC), Maryland, and Virginia have older buildings that require frequent maintenance. Insurers view these properties as higher risk, leading to increased premiums. 

The region has also seen more extreme weather, including flooding and storms, which drive up claims and insurance costs. Additionally, the DC area has a history of legal disputes involving HOAs, construction defects, and liability claims, which contribute to higher insurance costs. Finally, some major insurers have reduced coverage in the area due to increasing risks, resulting in fewer options and higher prices.

According to Hillcrest Management, HOAs are experiencing dramatic rate hikes with fewer underwriters willing to quote. HOA Strategies reports that even well-managed communities are seeing steep cost increases and added policy exclusions. Reduced competition leads to less flexibility and puts associations with deferred maintenance or incomplete documentation at a disadvantage.

Structural Integrity and Disaster Preparedness Under the Microscope

Since the 2021 collapse of Champlain Towers South in Surfside, Florida, insurers have implemented more rigorous inspection protocols. Underwriting now requires structural and reserve studies, updated engineering reports, and documented maintenance records.

The tragedy has altered how insurers assess risk, particularly for older buildings. Associations in the DC, Maryland, and Virginia region should expect similar scrutiny, especially for older buildings and those located in flood-prone or coastal zones.

Technology-driven preventive maintenance efforts — such as those highlighted in this Sahouri post — are becoming essential to pass underwriting reviews and control long-term costs.

Understanding What’s Covered — And What’s Not

Insurance policies for community associations typically include three major components:

• Property coverage: For common elements such as roofs and elevators
• Liability protection: For injuries or damages on community grounds
• Directors and officers (D&O) insurance: Protection for board members against legal claims

Coverage gaps often exist in areas such as cyber liability, flood risk, or aging infrastructure. Standard packages may not reflect today’s risks. Associations should regularly audit their policies to ensure alignment with evolving exposures. Beyond cyber liability, flood risk, and aging infrastructure, other potential coverage gaps for community associations may include:

• Water damage (non-flood): Standard policies may not cover damage from slow leaks or sewer backups.
• Wind and hail damage: These perils may come with high deductibles or be partially excluded.
• Earthquake damage: Earthquakes typically require a separate policy, even in lower-risk regions.
• Pollution liability: Coverage for environmental cleanup or contamination is often limited or excluded.
• Ordinance or law compliance: Rebuilding costs due to updated building codes may not be fully covered.
• Business interruption: Lost income from amenities like rental spaces or clubhouses may not be included.
• Equipment breakdown: Sudden failure of systems like elevators or HVAC units may not be covered.
• Crime and dishonesty: Theft, fraud, or embezzlement by employees or board members may require separate coverage.
• Workers’ compensation: If staff are employed, a separate workers’ comp policy may be necessary.
• Umbrella or excess liability: Without this coverage, liability claims that exceed existing policy limits may not be covered.

What Associations Can Do Now

Rising premiums and reduced options make proactive risk management essential. Associations should start by working with an independent advocate who understands the HOA market and represents their interests. Reviewing current policies for exclusions and opportunities to improve terms is equally important.

Community associations should take the following steps to navigate increasing insurance costs:

• Conduct a professional risk assessment: Partner with a local broker to identify vulnerabilities proactively.
• Maintain thorough documentation: Strong records, such as maintenance logs and board meeting minutes, enhance underwriting credibility.
• Explore integrated coverage solutions: Consolidating multiple policies can lead to more favorable rates and simplified management.

The Sahouri Solution: Advocacy for Communities

Sahouri delivers a consulting-driven insurance experience that puts your board’s needs first. Our Advocacy Team integrates risk, health, and benefits strategies into a single plan, helping your community association reduce costs, enhance insurability, and align coverage with evolving structural and liability needs.

Optimize your insurance structure. Leverage technology-driven solutions. Strengthen financial security for your association. Contact a Sahouri Advocate today to evaluate your coverage and explore best practices in risk management for community associations.