‘Is this even legal?'… ‘Yep': Tenant's HOA fees jump from $700 to an outrages $1,600 per month, so do you blame insurance companies or the HOA?

Author image for Elna McHilderson
Elna McHilderson • Managing Editor
Oct 27, 2023 12:00 AM EDT

The housing market is insane right now, that's pretty common knowledge at this point. But have you dived into the property insurance crisis? (Feels like everything is in crisis mode these days…) Turns out it's not just the price to purchase a house that has been disgustingly inflated, but also the price to keep and maintain your home. I mean, with the price of gas and eggs these days, are you even surprised that something as money hungry as insurance companies have raised their prices?

One tenant came to Reddit to seek helpful advice on what to do with a price hike in his HOA dues? It went from an already expensive $700 to an outrages $1,600 per month. Apparently, the HOA did not give anybody a heads up, they just told them it had to be done. They elaborated and said that they lost their original insurance plan and had to piece together a more expensive one from multiple providers. Sounds shady, yet also believable. What do you think? Reddit seems to be split on who to blame—is this the fault of the HOA board or the insurance company? Read below and decide for yourself. 

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  • 01
    Couch - DOG
    via pxhere
  • 02
    Font - Posted by u/illTROOP 14 hours ago Outrageous HOA fee increase. PLEASE HELP!
    via u/illTROOP
  • 03
    Font - So for starters, when my I bought my condo in 2017, the HOA fees were already ridiculous. In 2017 they were $700 per month. It is a '70s built complex, with 150-ish units. I chose this location at time of purchase due to several reasons that
    via u/illTROOP
  • 04
    Font - made the HOA fees "tolerable". Like garage, view, etc. Fast forward to last year, we got a special assessment for siding repairs etc. Couple months after that we received and
    via u/illTROOP
  • 05
    Font - "emergency special assessment" for and additional $800+ dollars per month! This brought my HOA fees to over $1600 per month! Apparently, the fire insurance for the complex, Farmers Insurance, decided they were not going to
    via u/illTROOP
  • 06
    Font - renew our policy. Apparently, The HOA could not seem to make a deal with an insurance company at all that would cover the amount we needed. So they had to piece together several policies from several companies in order
    via u/illTROOP
  • 07
    Font - to cover the complex. Is an increase like this even legal? There has to be some way to make the insurance cost less than what it does. It has been over a year with ZERO update on the fire insurance situation from
    via u/illTROOP
  • 08
    Font - board members on any progress for a sustainable solution. I am hoping someone out there has dealt with a problem like this, and ended up with a favorable outcome.
    via u/illTROOP
  • 09
    Font - FrankParkerNSA. 14 hr. ago I don't think folks truly understand how expensive insurance policies are for condo and townhome associations - I know I didn't until I served on a BOD over a decade ago.
    via u/FrankParkerNSA
  • 10
    Font - The problem is catastrophic coverage - imagine a Cat 5 hurricane or an F5 tornado hitting the development. For 75 units in 2008, it was estimated that we needed nearly 1.2M in coverage just to have the debris hauled away. Then replacement coverages for all the buildings, and home values
    via u/FrankParkerNSA
  • 11
    Font - are now double what they were. I can't imagine how many reserve funds are way behind with the rampant inflation the past few years, especially when TIPS are the only allowed investment medium with old funds locked into <2% interest rates, making old bonds worthless
    via u/FrankParkerNSA
  • 12
    Font - Be glad the, BOD is trying to address this rather than sweeping it under the rug. Underfunded associations decrease property values faster than anything else.
    via u/FrankParkerNSA
  • 13
    Font - Rocketeering 11 hr. ago ● Why would insurance be so high for a group of housing vs regular? If I'm reading right for the OP then the insurance went up by $700 per unit? If I own a house not a part of that or any HOA near by, would the insurance be going up that much as well?
    via u/Rocketeering
  • 14
    Font - skiingredneck. 10 hr. ago The blast radius of your kitchen fire is one house. The blast radius of a kitchen fire in a building of condos... Times n kitchens of probability....
    via u/skiingredneck
  • 15
    Font - OneLessDay517.5 hr. ago This! My building (townhome, 5 homes per building) was struck by lightning a few years ago. Caused a fire in my adjoining neighbors kitchen that, but for the quick response of our fire department, could easily have spread to my unit or consumed the whole building.
    via u/OneLessDay517
  • 16
    Font - So in the worst case scenario, instead of rebuilding one home, insurance would have been rebuilding 5, from the same event.
    via u/OneLessDay517
  • 17
    Font - Tim_the_geek 1 hr. ago ● In my condo, unit owners are responsible for damage to their unit, even if caused by another. Perhaps this rule is to avoid redundant coverage and increased premiums.
    via u/Tim_the_geek
  • 18
    Font - Manic Mini 5 min. ago That's how m HOA was. We were responsible for covering everything inside and the HOA covered the exterior.
    via u/Manic_Mini
  • 19
    Font - lochlomondhaddock 1 hr. ago Yep. I know someone in a row house and one person was re-doing their roof. Burnt down the whole block. Or at least caused the upper levels and whatever was in their attics to burn. I think the lower levels were ok. But not great to not have a roof.
    via u/lochlomondhaddock
  • 20
    Font - I am definitely in the anti- hoa group but my elderly friends have a place and it is almost like assisted living they take care of the lawn and all of that. Owning a single family home is stressful and requires a lot of work too.
    via u/lochlomondhaddock
  • 21
    Font - So I appreciate that. But ouch having it jump that much, especially when you are retired and living on a fixed income, this is obviously reducing your ability to live longer and taking money away from your kids. That would stress me out.
    via u/lochlomondhaddock
  • 22
    Font - Raterus 9 hr. ago ● Sounded like they lost their insurance, and probably had to buy one twice as expensive to maintain coverage while they sorted the disagreement out.
    via u/Raterus_
  • 23
    Font - hummelm10 - 3 hr. ago My building funds things like this and capital improvements with assessments. It's pretty standard. That said, there should have been announced end date for the assessment. We don't keep them in perpetuity, that's just a fee raise.
    via u/hummelm10
  • 24
    Font - We had the same issue with insurance in the last year where it turned out we weren't fully covered so we had to increase our plan. It sucked and is why we raised our maintenance fees.
    via u/hummelm10
  • 25
    Font - Lonestar041 5 hr. ago HOA Board Member And add to that the rigged market where insurances just rack up prices. Our liability insurance for the common property went up from like $1300 to over $4000 this year. There is no explanation for that. We never had a claim. Other carriers are the same.
    via u/Lonestar041
  • 26
    Font - You can't tell me that would work in a market without prices being coordinated between them. And you can't tell me that liability claims tripled. Their balance sheets don't support that claim.
    via u/Lonestar041

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