Insurance Awareness Day 2025: 7 Ways HOAs Can Strengthen Coverage and Save Money
Insurance Awareness Day is on June 28, which makes thisthe perfect time for homeowners associations to review their insurance policies and procedures. This year, the insurance industry is experiencing a hard market, resulting in increased premiums, stricter underwriting standards, and a reduction in insurance carrier availability. To keep their communities protected while effectively managing costs, HOAs must remain proactive. Here are seven essential tips every HOA board should implement to strengthen coverage and save.
1. Verify Homeowner Policies
One of the biggest insurance mistakes that community associations make is assuming that all homeowners have the right insurance policies in place. Boards should routinely verify proof of coverage and educate residents about the risks of underinsurance. By encouraging — or even requiring — proper insurance coverage, your HOA helps limit its risk of uncovered losses, which can result in special assessments that affect the entire community.
2. Plan for Premium Increases
Insurance costs for HOAs have increased significantly in recent years, and that trend is expected to continue for the foreseeable future. Factors, including an increase in natural disasters, higher construction costs, and stricter underwriting, have driven up premiums by as much as 20-30% annually. Budgeting for these potential increases is critical to avoid shortfalls and special assessments. Make sure your HOA board reviews your insurance policy annually and works with your HOA management companyto predict premium increases and shop around for alternatives. Budgeting for these increases proactively will help your community stay financially stable without having to spring last-minute assessments on homeowners.
3. Prioritize Preventive Maintenance
The condition of your HOA’s common areas and critical infrastructure directly influences insurance costs. Neglecting these systems can lead to higher premiums or nonrenewal. Routine maintenance is essential. Maintenance of infrastructure (roofs, plumbing, and electrical systems) reduce your community’s risk of damage and show insurers that you are committed to loss control, which can result in more favorable insurance rates.
4. Promptly Address Insurance Inspections
Insurance carriers may request on-site inspections before issuing or renewing a policy. This is to help the company identify any potential hazards and ensure that your HOA is effectively minimizing any safety risks. Ignoring or delaying these inspection requests can lead to less favorable insurance terms or jeopardize your coverage altogether. Demonstrate your HOA’s commitment to safety and proactive care by responding to these requests quickly and keeping any inspection documentation organized for easy future reference.
5. Act on Insurance Recommendations Quickly
After an inspection, your insurer will typically provide loss control recommendations, such as repairing walkways, updating fire safety systems, or installing handrails. To show your insurance company that you are committed to mitigating risk, make sure that you comply with these requests as quickly as possible. Failing to implement their recommendations promptly can result in policy exclusions or nonrenewal, limiting your choices for coverage in an already tight insurance market.
6. Make Timely Payments
One of the simplest ways to protect your coverage is by making prompt and accurate payments. Late or missed payments can lead to policy cancellation, leaving your community at risk. Establish a reliable workflow to ensure that all invoices are received, approved, and paid on time. Many HOAs opt for automatic payments or rely on their HOA management company for this responsibility to ensure peace of mind.
7. Raise Deductibles Strategically
One of the most effective ways HOAs can save money on insurance in the long run is by choosing a higher deductible. Increasing your deductible reduces your annual premium right away and makes it less likely that you’ll submit small claims, which can help minimize premium increases in the future. However, with a higher deductible, it’s important to ensure that your HOA has enough money set aside in reserves to pay for any unexpected damages. Work with your community management company to figure out what deductible amount makes the most sense for your community, so you save money without taking on too much risk.
If you’re overwhelmed by the intricacies of HOA insurance coverage, a professional community management firm like The Management Trust can help. At The Management Trust, we have a dedicated internal insurance department staffed by experienced and licensed insurance professionals. This specialized team supports HOA boards by reviewing your coverage to ensure compliance, exploring alternative carriers and coverage strategies for potential savings, and advocating on your behalf to secure the best possible services and coverage terms available. If you want support in navigating your HOA’s insurance needs or general community management needs, contact The Management Trusttoday and learn more about our full range of property services.
