Homeowners Associations (HOAs) are facing increasing difficulties securing master insurance policies as insurers raise premiums or exit the market due to rising losses from extreme weather and aging properties. These higher costs are passed down to homeowners, making condos and shared properties more expensive to maintain. Additionally, insurance rate hikes are occurring nationwide. This trend is not limited to disaster-prone areas, as insurers are also pulling back in regions like Minnesota and Colorado due to hail damage risks.
Source: https://finance.yahoo.com/news/insurers-are-dropping-hoas-threatening-the-condo-market-124429337.html
The prospect of HOAs having difficulty securing insurance in areas where insurance companies are unlikely to turn a profit is interesting. The job of an HOA is to keep and raise home values. This will be made difficult if people are not willing to purchase homes with HOAs if expenses are increased as they are passed down to potential homeowners from HOAs because of insurance companies. This drop in demand will cause the price of homes with HOAs to drop. It may ultimately be good for the housing market if homes become more affordable.
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