The Future of AOAO Insurance

Many Associations have heard of or are currently facing the effects of what we refer to as the “hardening insurance market”.  The lines of insurance that are most affected are your standard property coverages such as fire, hurricane, flood and earthquake; Directors’ and Officers’ Liability; and Umbrella/Excess Liability.

What does this mean for your Association now and going forward?  How can your Association address the uncertainty?

What does the “hardening insurance market” mean?

A hardening insurance market can mean one or both of the following:

  1. Insurance carriers are limiting the amount of insurance that they are willing to provide (capacity) and changing underwriting guidelines on what they are willing to insure. They are asking more questions and are closely reviewing the accounts. Some insurance carriers may non-renew accounts that no longer fit in their appetite; or lower their capacity and will not offer the same limits.
  2. Insurance rates are starting to go up significantly. Insurance carriers want to be sure that they are collecting the appropriate premium for an Association’s exposures and loss history. Some increases are the result of the increased cost of reinsurance. Reinsurance is a form of insurance purchased by insurance companies to limit the amount of loss they could potentially incur.  If it is too large of a risk for an insurance carrier, they may non-renew your account instead of increasing your rates.

How to address?

While it is hard to say what to expect 5 or 10 years down the road, one thing for certain is that Associations need to be ready for any increases that may lie ahead. The best recommendation is to ensure your Association budgets for any unexpected changes and for any premium increases.

Ditch the mindset that your insurance will be renewing flat with no increases, or that your insurance pricing will go down anytime soon. While it may occur, it is very unlikely, unless there are special circumstances for your Property/Association.

Estimated increases depend on many factors, including but not limited to: carrier capacity/appetite, location, coverages, losses, and so on. While there is no one-size-fits-all, many Associations are already starting to budget for overall premium increases from 5-15% in anticipation of the changing insurance marketplace.

Unfortunately, the future of insurance is unpredictable as catastrophic losses could cause drastic effects on the insurance marketplace at any moment. One thing for sure is that Associations should be prepared, as we expect premiums to continue to rise.

Get In Touch

If you would like additional information including resources or have any questions, please contact Brandon Keenan at

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