Colorado homeowners are facing one of the most significant insurance cost pressures in the country. According to the FOX21 News article, “Colorado facing sharpest home insurance increase in the U.S.,” citing LendingTree’s 2026 State of Home Insurance Report, Colorado home insurance rates increased 100.8% from 2020 to 2025, more than doubling over that period. The report also found that Colorado ranked number one for home insurance rate increases in 2025, with premiums rising another 18.3% in one year.
Source: FOX21 News, “Colorado facing sharpest home insurance increase in the U.S.”
https://www.fox21news.com/news/state/colorado-facing-sharpest-home-insurance-increase-in-the-us/
For homeowners associations, this is not just an individual homeowner issue. Rising insurance costs can directly affect HOA budgets, reserve planning, assessment levels, deductible exposure, and the board’s ability to protect the association’s common property.
Board health question: Is your HOA treating insurance as a routine renewal item, or as a major financial and risk management priority?
Why Insurance Costs Are Rising So Quickly in Colorado
Colorado’s insurance market is being affected by several overlapping pressures. Severe hail, wildfire exposure, wind, storm damage, rising repair costs, higher labor costs, and more expensive construction materials are all contributing to increased premiums.
For HOAs, these pressures can be even more significant because associations may insure roofs, building exteriors, clubhouses, common area structures, amenities, fencing, signage, mechanical systems, and other shared property depending on the governing documents and property type.
Condominium and townhome communities may feel this pressure especially strongly because the association’s master policy may cover large portions of the building structure. When a carrier sees higher risk, higher replacement costs, and more frequent claims, the association’s renewal can increase dramatically.
How This Impacts HOA Master Insurance Policies
Most Colorado HOAs carry some form of property, general liability, directors and officers, crime or fidelity, and other coverage depending on the community. For condominium and townhome associations, the property policy is often one of the largest line items in the annual budget.
When premiums rise, the impact can show up in several ways:
Higher Annual Premiums
The most visible impact is the premium itself. If an association’s insurance premium increases significantly, the board must decide how to absorb that cost. In many communities, there is no realistic way to reduce other operating expenses enough to fully offset a major insurance increase.
That means the cost may need to be passed through the budget in the form of higher assessments.
Reduced Coverage Options
Some associations may find that carriers are offering fewer options than in prior years. In higher-risk areas, particularly those with wildfire, hail, or severe storm exposure, boards may face more limited carrier availability or less favorable policy terms.
Reduced coverage options can create difficult decisions. A lower premium may come with exclusions, coverage limitations, higher deductibles, or less favorable claim terms. Boards should be careful not to evaluate insurance based only on price.
Higher Deductibles
In Colorado, wind and hail deductibles have become a major concern for many associations. Instead of a flat deductible, some policies may use percentage-based deductibles. For example, a wind or hail deductible may be calculated as a percentage of the insured property value.
For an HOA with significant building coverage, that deductible can be substantial. A deductible that once felt manageable may now represent a major financial exposure to the association.
Greater Out-of-Pocket Risk After a Claim
Higher deductibles can shift more financial responsibility back to the association and, ultimately, to the homeowners. If a major hailstorm damages roofs or siding, the association may need to cover a much larger deductible before insurance proceeds apply.
That cost may need to come from operating funds, reserves, a special assessment, or a combination of funding sources. Boards should understand how their governing documents address insurance deductibles, owner responsibility, limited common elements, and damage allocation.
Increased Assessments May Be Necessary
No board wants to raise assessments. However, insurance increases are not discretionary in the same way that some other budget items may be. If the association is required to maintain insurance under its governing documents, lender requirements, or applicable law, the board must budget responsibly for that obligation.
When premiums rise sharply, assessments may need to increase to cover:
The Higher Insurance Premium
The annual premium must be included in the operating budget. If the premium increases by tens of thousands of dollars, the budget must account for that increase.
Higher Deductible Exposure
Boards should consider whether the association has enough available cash to handle a deductible after a major claim. If not, the community may be exposed to a future special assessment or emergency funding need.
Reserve and Maintenance Pressures
Insurance increases can also affect reserve planning. If operating funds are being stretched by insurance costs, boards may be tempted to reduce reserve contributions. That may create longer-term risk, especially in Colorado where roofs, siding, asphalt, fencing, and exterior components are already exposed to weather extremes and shorter construction seasons.
Reducing reserve contributions to absorb insurance increases may solve a short-term budget problem, but it can create larger financial challenges later.
Coverage Issues Boards Should Review Carefully
Insurance renewals should not be handled as a simple annual transaction. Boards should work with qualified insurance professionals to understand what is changing and how those changes affect the association.
Key questions include:
What Does the Master Policy Actually Cover?
Coverage responsibilities vary by community. Some associations insure common areas only. Others insure building exteriors, roofs, structural components, or portions of attached housing. Boards should compare the insurance policy with the governing documents to understand where association responsibility ends and owner responsibility begins.
Are There New Exclusions or Limitations?
A renewal may look acceptable at first glance, but important exclusions or limitations can materially change the association’s risk. Boards should ask about wind, hail, wildfire, water damage, ordinance or law coverage, building code upgrades, and replacement cost limitations.
How Has the Deductible Changed?
Boards should understand each deductible, including whether it is a flat dollar amount or a percentage-based deductible. Special attention should be paid to wind and hail deductibles because those risks are especially relevant in Colorado.
Does the Association Have Enough Cash to Cover a Claim?
A policy is only part of the risk management plan. If the association cannot reasonably fund its deductible after a major loss, the board should discuss whether budget changes, reserve planning, or deductible funding strategies are needed.
Are Owners Properly Insured?
Homeowners may need to review their individual policies as well. In condominium and townhome communities, owners should ask their personal insurance agents whether they have appropriate loss assessment coverage, deductible assessment coverage, betterments and improvements coverage, and personal property coverage.
The HOA should not advise owners on personal insurance coverage, but it can encourage owners to speak with their own licensed insurance professionals.
Colorado’s New Mitigation Efforts May Help, But Boards Still Need to Plan
The article also notes that Colorado has taken steps to address insurance pressure through SB26-155, which creates the Strengthen Colorado Homes Enterprise within the Division of Insurance. The program is intended to support roof fortification against hailstorms and study options for reducing insurance costs associated with wildfire risks.
This is an important development, especially because hail is a major driver of Colorado insurance claims. However, HOAs should not assume that state-level mitigation programs will immediately solve the budget impact of rising premiums.
Boards still need to plan for current renewal realities, deductible exposure, reserve needs, and long-term maintenance responsibilities.
Operational Steps for HOA Boards
1. Start the Insurance Renewal Process Early
Insurance should not be reviewed a few days before renewal. Boards should begin discussions early with the association’s insurance agent or broker so there is time to evaluate options, compare coverage, and understand changes.
2. Review the Budget Impact Before Final Approval
If the renewal premium increases significantly, boards should update the operating budget before approving assessments. Waiting too long can lead to underfunding and unexpected financial pressure.
3. Understand Deductible Responsibility
Boards should review the governing documents and consult qualified legal counsel when needed to understand how deductibles may be allocated after a claim. This is especially important in communities with attached housing, limited common elements, or complex maintenance responsibilities.
4. Communicate Clearly With Homeowners
Insurance increases can be frustrating for homeowners, especially when they also face rising costs on their personal policies. Clear communication helps homeowners understand that the association is responding to market conditions, not simply increasing assessments without reason.
Good communication should explain what changed, why it matters, how the board evaluated options, and how the increased cost affects the budget.
5. Coordinate Insurance With Reserve Planning
Insurance, reserves, and maintenance planning are connected. A community that maintains roofs, siding, drainage, defensible space, and other exterior components may be better positioned from a risk management standpoint. Boards should discuss whether maintenance planning and reserve funding support the association’s long-term insurability.
Strategic Considerations for Colorado HOAs
Insurance increases should prompt boards to think beyond the next renewal. Colorado communities may need to evaluate long-term risk reduction strategies such as roof material standards, defensible space planning, drainage improvements, exterior maintenance cycles, tree management, and construction quality standards for repair and replacement projects.
Boards should also understand the role of the business judgment rule. In general, boards are better positioned when they make informed decisions, review relevant information, rely on qualified professionals, document their process, and act in the best interests of the association.
Insurance decisions should be made with input from licensed insurance professionals, legal counsel where appropriate, reserve specialists, contractors, and other qualified advisors.
Colorado HOA Relevance
Colorado’s climate creates unique insurance challenges for HOAs. Hail, wildfire risk, wind, freeze-thaw cycles, and rapid weather changes can all affect roofs, siding, asphalt, landscaping, drainage, and common area assets.
Because Colorado also has a shorter construction and repair season, delayed maintenance can become more expensive and more difficult to schedule. Associations that plan early, fund reserves responsibly, and communicate clearly with homeowners will be better prepared to manage rising insurance costs.
Closing Thought
Insurance is no longer a routine budget line item for many Colorado HOAs. It is now one of the most important financial and operational issues facing boards.
Rising premiums, increased deductibles, and tighter coverage options require careful planning, transparent communication, and informed decision-making. Boards that address these issues early can better protect their communities, reduce financial surprises, and help homeowners understand the real cost of maintaining and insuring shared property.
At Colorado Community Management, we help boards navigate complex budget, insurance, maintenance, and governance challenges with clarity and practical support.
Elevated Management – Earned Trust.