Why Condo and HOA Insurance Got So Expensive, and Why Your 2026 Renewal May Not Reflect a Softer Market

How big the increases have been

• More than nine in ten community associations reported a premium increase at their last renewal in a survey by the Foundation for Community Association Research.
• An analysis of 1,800 associations in 44 states by Rexera found condo dues rose about 20% between 2022 and 2024, with insurance a major driver.
• Florida is the extreme case. State regulator data reported by InsuranceNewsNet showed the average commercial condo association policy more than doubling between June 2022 and mid-2024, from about $72,600 to about $147,400.

Most associations that raised dues or imposed special assessments in those years did it because of insurance.

What actually drove the increases

1. Catastrophe losses stayed high year after year

Global insured natural catastrophe losses topped $100 billion for the sixth year in a row in 2025, according to Willis. The Los Angeles wildfires alone accounted for roughly $40 billion of insured losses, the largest wildfire insured loss on record. Severe convective storms (hail, wind and tornadoes) added about $50 billion. These aren't only coastal problems. Hail and wind affect associations across the middle of the country.

2. Reinsurance got expensive, then started getting cheaper

Insurers buy insurance of their own, called reinsurance. When reinsurance prices jumped after 2022, carriers passed the cost through to policyholders, especially for property in catastrophe-exposed areas. That trend has reversed. U.S. property catastrophe reinsurance rates fell about 12% at the January 2026 renewals by Guy Carpenter's measure, and fell further at midyear.

3. Buildings cost more to rebuild

Labor and material costs rose quickly in the early 2020s. Insurers price on what it would cost to rebuild, so higher replacement costs mean higher insured values and higher premiums, even when nothing about the building changed. Many associations were also underinsured, and carriers corrected that at renewal by raising building values, sometimes by large amounts in a single year.

4. Water damage became the leading cause of loss

In multi-unit buildings, water has overtaken fire as the leading cause of loss. One failed supply line or water heater can damage several units below it, displace residents and create several claims at once. Frequent water claims drive both premiums and deductibles up, which is why so many associations now carry a separate, higher water damage deductible.

5. Older buildings and deferred maintenance drew more scrutiny

After the 2021 Champlain Towers South collapse in Surfside, Florida, carriers, lenders and legislators all looked harder at aging buildings, structural inspections and reserves. Buildings with older roofs, original plumbing or electrical systems, or underfunded reserves became harder to place.

6. Fewer carriers wanted the business

Some carriers reduced how much habitational property they would write, or left certain states. Fewer markets competing for a building usually means higher prices and stricter terms.

Why 2026 is different

The broader market has turned:

• U.S. commercial property insurance rates fell about 14.5%, according to WTW's fall 2026 Insurance Marketplace Realities report.
• Insured catastrophe losses in the first half of 2026 were the lowest for any first half since 2020.
• Reinsurance capital reached a record level at the end of 2025, and carriers are competing for business again.

Not every association benefits equally, though. USI Insurance Services reported that in the second half of 2025, non-catastrophe property with a clean loss history and a favorable risk profile renewed anywhere from a 10% decrease to flat. Property with an unfavorable loss history or risk profile renewed anywhere from a 15% decrease to a 5% increase. Underwriters are rewarding the buildings they understand and trust.

Why your renewal might not reflect the softer market

If your association is still seeing increases, it's usually one or more of these:

• The submission didn't make the building look like a good risk. Missing or outdated information about roofs, plumbing, electrical systems, water mitigation or maintenance leads underwriters to assume the worst.
• The building values went up again. A valuation adjustment can raise the premium even when the rate goes down.
• Losses. A water claim or two in the last few years can outweigh the market trend.
• Only the incumbent carrier was asked. In a softening market, a renewal that isn't tested against other carriers often leaves savings on the table.
• Terms changed quietly. Higher deductibles, new exclusions or sublimits can show up as a "flat" premium that is actually worth less coverage.

What boards and managers can control

You can't control the weather or reinsurance pricing. You can control:

• When the renewal starts. Starting about 120 days out gives the broker time to approach other carriers before the incumbent's terms arrive.
• The quality of the building data. A complete, current statement of values, with roof ages, system updates, protective devices and maintenance history, gives underwriters a reason to price your building well.
• Water losses. Leak detection, automatic shutoff valves, supply line replacement programs and clear unit owner maintenance rules all reduce the most common claim.
• Insured value. Get a professional replacement cost valuation regularly, so you're neither underinsured nor paying for more value than you need.
• How the board compares options. Compare coverage, deductibles and exclusions side by side, not just the premium.

Frequently asked questions

Is our premium going up because of claims at other buildings?

Partly. Insurers price for broad trends like catastrophe losses and rebuilding costs, regardless of an individual association's claims. Your own losses, building characteristics and data quality then move your price up or down from there.

Should we raise our deductible to lower the premium?

It can lower the premium, but it moves risk onto the association or unit owners. Check what your governing documents allow, whether your reserves can absorb the deductible, and lender limits on deductibles. Then decide with the trade-off in dollars in front of the board.

Why did our premium go up when the market is supposedly softening?

The market average is falling, but individual pricing depends on how underwriters view your building, your loss history and your insured value. A detailed review of what changed (rate, value, deductibles, terms) usually explains it.

Will premiums keep falling?

No one can promise that. A single major hurricane or a large loss year can tighten the market quickly. The safest approach is to keep your building data current, so you're well positioned in either direction.

Sources

• Foundation for Community Association Research survey, as reported by The Real Deal (June 2024)
• Rexera analysis, as reported by Program Business
• Florida Office of Insurance Regulation data, as reported by InsuranceNewsNet
• WTW, Insurance Marketplace Realities, as reported by Beinsure (fall 2026)
• Willis catastrophe loss data, as reported by Reinsurance News (October 2026)
• Guy Carpenter rate index, as reported by Insurance Business
• USI Insurance Services, 2026 Commercial Property & Casualty Market Outlook, as reported by Program Business
• Insurance Business, Water damage overtakes fire as leading peril in multi-unit buildings