By Prerna Kapoor, CLHMS | REAL Brokerage | April 26, 2026
Quick answer: HOA insurance premiums in Colorado have doubled or tripled in recent years due to wildfire risk, hail damage, and rising reconstruction costs. This is driving up monthly condo dues by hundreds of dollars and making some units harder to sell or finance. Here’s what you need to know before buying or if you already own.
If you’ve been looking at condos or townhomes in Colorado lately, you may have noticed something strange: the prices seem reasonable, but the monthly HOA dues have jumped significantly compared to a year or two ago. In some communities, dues have gone up $200-$400 per month with almost no notice.
The reason? Insurance. And it’s not a small problem – HOA attorney Molly Foley-Healy has called it “the biggest crisis to hit HOAs” in the last 17 years in Colorado.
What’s Happening to HOA Insurance in Colorado
Insurance companies are pulling back from the HOA market in Colorado, and the ones that remain are charging dramatically more. According to a 9News investigation, some HOA communities have seen premium increases ranging from $300,000 to nearly $1 million added to their annual policies.
When an HOA’s master insurance policy goes up that much, there’s only one place the money can come from: the owners. That’s why monthly dues in many Colorado condo communities have spiked 30-60% in just the last two years.
The math is straightforward but painful. If an HOA of 100 units sees its insurance policy jump by $500,000, that’s an additional $5,000 per unit per year, or roughly $417 per month added to every owner’s dues. For a buyer calculating their mortgage payment, that’s the equivalent of about $70,000 in additional home price at current interest rates.
Why This Is Happening Now
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Three factors are converging at the same time:
Climate risk reassessment. Insurance carriers are using updated climate models that factor in wildfire, hail, and flood risk more aggressively than ever before. Colorado experienced the Marshall Fire in 2021 (over $2 billion in damage) and multiple severe hailstorms in recent years. Insurers that lost money on these events are either exiting the market or repricing dramatically.
Rising reconstruction costs. The cost to rebuild a multi-unit structure has climbed 25-40% since 2020, driven by materials inflation and labor shortages. When insurance companies calculate replacement cost coverage, the numbers they’re arriving at are far higher than even a few years ago.
Fewer carriers competing. Several major insurance companies have stopped writing HOA policies in Colorado altogether. When there are fewer companies bidding on a policy, the remaining carriers have less pressure to keep prices competitive. Some HOAs are finding only one or two companies willing to quote them at all.
The Hidden Deductible Problem
There’s another issue that most condo owners don’t know about until it’s too late. As premiums have risen, so have deductibles. Some HOA master policies now carry deductibles of $50,000 to $250,000 per incident. When a hailstorm damages the building, the HOA has to cover that deductible, which typically gets passed through to owners as a special assessment.
Even worse, a KRDO investigation found that many individual condo insurance policies (HO-6 policies) contain a “special limit” clause that caps payouts related to HOA deductible assessments at just $2,000, even if the owner purchased much higher overall coverage. This means an owner could face a $10,000+ special assessment and find their personal insurance only covers $2,000 of it.
If you own a condo in Colorado, check your HO-6 policy right now for the “loss assessment” coverage limit. Many agents recommend at least $50,000 in loss assessment coverage, though this varies by your specific community’s deductible.
What This Means If You’re Buying a Condo
If you’re considering a condo or townhome purchase, here’s what to do:
Request the HOA’s current insurance declarations page. This shows the master policy’s premium, deductible, and coverage limits. Compare this year’s premium to last year’s. If it went up significantly, it might go up again.
Ask about the reserve study. A well-run HOA will have a recent reserve study showing how well-funded their reserves are. If reserves are below 50%, the community may face special assessments in addition to rising dues.
Factor the true monthly cost. Don’t just look at the current HOA dues. Ask the board if any increases are planned or under discussion. A $350/month HOA fee today could be $500/month next year if the insurance renewal comes in high.
Check the HOA’s financial statements for the last 3 years. Look for patterns: are dues going up steadily? Have there been special assessments? Is the board drawing down reserves to avoid raising dues (which just delays the inevitable)?
Lender requirements matter. FHA and some conventional lenders have specific requirements for HOA insurance and reserves. If the HOA doesn’t meet these thresholds, you may not be able to get certain types of financing, which limits your buyer pool when you eventually sell.
What Owners Can Do Right Now
If you already own a condo in Colorado, you’re not powerless:
Attend board meetings. Insurance decisions affect every owner. Push for transparency about what the board is doing to manage costs, shop for alternative carriers, and explore mitigation measures that could lower premiums.
Increase your HO-6 loss assessment coverage. Call your insurance agent and ask about boosting this specific coverage. It’s usually inexpensive to add, and it could save you thousands if a large deductible gets assessed.
Support mitigation projects. Some insurers offer discounts for communities that invest in hail-resistant roofing, fire mitigation, or updated building systems. These upfront costs can pay for themselves through lower premiums over time.
Watch for legislative action. Colorado lawmakers have proposed studying the HOA insurance market to find solutions. The Colorado Division of Insurance also has a toolkit for HOAs and homeowners dealing with insurance challenges.
Is This Affecting Property Values?
Yes, and it’s showing up clearly in the data. According to the Colorado Association of Realtors, condos and townhomes are experiencing longer days on market and softer price appreciation compared to single-family homes. The attached housing segment is described as being “hampered by skyrocketing homeowner association dues and insurance premiums,” with rising carrying costs leading to softer demand.
That said, this could create buying opportunities for informed purchasers. If you understand the insurance situation, budget for it accurately, and negotiate accordingly, you may be able to purchase a condo at a better price than you would have a year ago.
The Bigger Picture
This isn’t just a condo problem. Insurance costs are rising across all property types in Colorado. But condos feel it most acutely because the costs are centralized through the HOA and visible in monthly dues. Single-family homeowners are seeing their premiums rise too – they just experience it individually rather than collectively.
If you’re weighing the pros and cons of condo versus single-family in Colorado right now, the insurance picture is an important factor that wasn’t nearly as significant even two years ago. I’m happy to walk through the numbers on specific properties you’re looking at so you can make a fully informed decision.
Prerna Kapoor | REALTOR® | Luxury Home Specialist
REAL Brokerage | 720-949-5450 | info@prernakapoor.com
CLHMS • RENE • PSA • ABR | International Sterling Society Award Winner
Prerna specializes in residential real estate across Parker, Aurora, Lone Tree, Castle Pines, Highlands Ranch, Cherry Creek, Greenwood Village, and Centennial. She speaks English, Japanese, and Hindi.
