Boston condo insurance premiums are soaring
Boston Condos for Sale and Apartments for Rent
Boston condo insurance premiums are soaring
Rising condominium homeowners insurance costs make owning a home more expensive. For condo owners home owner association dues are way up because of increased insurance costs.
For the typical homeowner with a mortgage homeowner’s insurance is required and is added to the monthly mortgage payments. Homeowner’s should expect increases in monthly mortgage payments due to higher insurance costs and of course property tax increases.
Rising homeowners’ insurance premiums are driven by increased claims costs from more frequent and intense natural disasters like wind and hailstorms, exacerbated by higher construction material and labor costs due to inflation and supply chain issues. These factors place financial strain on insurers, leading to higher premiums and even non-renewal of policies, particularly in high-risk areas. For Minnesotans, the situation is projected to worsen with a potential 15% increase in premiums in 2025 due to these weather-related trends and
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Boston condo insurance premiums are soaring
More than nine in ten community associations reported insurance premiums increasing at the last renewal, according to a survey last year from the Foundation for Community Association Research. A majority of those community associations paid for those increases by raising dues or imposing a special assessment. Others tapped operating funds or lines of credit.
As insurance premiums surge for condo owners, so do condo association fees. Dues rose 20 percent between 2022 and 2024, according to Rexera’s analysis of 1,800 associations. If homeowners fall behind on those dues, foreclosure is often an option for the associations.
The pain of the insurance premium jumps are being felt most acutely in states such as Florida and California, where homeowners are in an insurance bind regardless of property type. Those states are prone to natural disasters — fires, hurricanes, earthquakes — that are worsening due to climate change, and in Florida, a new state law requires older buildings to meet stronger safety standards.
There are approximately 10 million condo, co-op or townhome owners in the United States, according to the National Association of Home Builders. The median condo association fee, which goes towards insurance, property maintenance and amenities, is $480 a month, according to Attom.
Options to reduce insurance costs are largely limited. Among the possibilities are to not report small claims or adjust bylaws to overlap a master policy with individual owner policies, according to a condo association lawyer
Updated: Boston Real Estate Blog 2024
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