Insurance skyrockets for condos and HOAs, previous disasters and climate change to blame - WKRC TV Cincinnati

Insurance skyrockets for condos and HOAs, previous disasters and climate change to blame

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FLORENCE, Ky. (WKRC) - Retired teacher Karen Conn and her retired dentist husband Randy bought a condo in the 96-unit complex Morgan’s Trace about seven years ago.

She's a member of the home owners association (HOA) board there and was stunned to find out the complex was losing its insurance late last year. The board scrambled to find another insurer, but could only get one that charged double what they were paying and it was for less coverage.

"We have contacted so many companies, so many different combinations and we're told the same thing - we're pulling away from insuring condos. Your condo is too old and we cannot insure you," Conn told Local 12. "I want a conversation started around in Kentucky especially, but around the country about condo owners. We're not the only ones going through this."

The board is covering the extra costs with cash reserves for 2024, but will probably need to raise HOA fees significantly next year. Conn says 75% of the residents are retired and on fixed incomes, including herself.

“Scared,” said Conn. “My husband has Lewy body dementia. Just had a hospital bed today. My neighbor across the road was just taken to the hospital in an ambulance. We're a close-knit community.”

Those living at Morgan’s Trace aren't alone. Insurance industry experts said this is a growing trend nationally for condo owners and those in HOAs for condo complexes. Insurance companies have been pulling coverages after huge losses down south.

Mark Friedlander is a spokesman for the Insurance Information Institute, a nonprofit agency funded by insurance companies.

Local 12 asked him:

"Are insurance companies dropping out of the condo market nationally because of what happened in Florida?"

“It's a national issue now and we're certainly seeing a tightening of the master condo association policy market across the country. It's becoming more difficult for associations to find affordable coverage,” said Friedlander.

Indeed, Friedlander said some rates nationally have gone up 100 to 500% for condos and HOAs following the 2021 collapse of a condo tower in Surfside, Florida. He also said that other severe storms caused by climate change such as tornados in the Midwest are also driving costs up and leading insurance companies to bail out on older condos.

Now, many here like Conn are wondering what's going to happen if costs keep going up.

"My husband is in the later stages of dementia. And what do I do on teacher's retirement with $2,000 or $,2,100 a month," said Conn.

The Morgan’s Trace HOA Board is filing a complaint with the Kentucky Department of Insurance, saying the original company shouldn't have been allowed to drop coverage because their buildings were 30 years old.

Representatives of that agency declined interviews, but said there is such a law.

Local 12 is still waiting for a response from the original company that dropped the policy.

Friedlander said if you find yourself in a similar situation consider higher deductibles. And like most things, don't be afraid to shop for better insurance deals.