ARVADA, Colo. — To say Rosalie Hayes was stunned when she opened the letter describing a dues increase at her Arvada condo complex this year would be an understatement.
“When I opened this letter, it was just like you could have knocked me over with a feather,” she said. “It was a shock.”
The letter explained her monthly condo dues would increase from $346 to $620, an increase of nearly $300.
The main culprit for the increase, according to the letter from the Sequoia Condominium Association, was that the homeowners association’s insurance premium had more than doubled from the previous year, adding $140,000 to the association’s yearly insurance bill.
“There’s a lot of people here… they’re younger and older and I don’t know how a lot of people are going to do it,” Hayes said.
But the situation at her condo community is playing out in similar communities across the state, as insurance companies move away from the HOA business in Colorado, citing increased loss from hail and wildfire, other liabilities and a lack of profitability for HOA policies in general.
“In the last 17 years in Colorado, I can say without hesitation, this is the biggest crisis to hit HOAs,” said Molly Foley-Healy, an attorney who represents HOA boards.
Foley-Healy said many of her clients are seeing premium rate hikes adding anywhere from $300,000 to close to $1 million to some policies, especially in more wildfire-prone mountain communities. And those sudden premium increases are leading boards to turn to their only sources of income for help – monthly dues and special assessments.
“Obviously nobody plans for that,” she said. “And people don't budget for it. And it's becoming a major crisis.”
“The owners are frustrated and angry, understandably so. But they're blaming the boards and the management companies who have zero control over that.”
In Wheat Ridge, Becky Blackett serves as the president of the 30-unit Brookside Townhomes Association, where she owns several units. She said her association found out right before Thanksgiving that their insurance premium was increasing from $20,000 the year before to $65,000 for 2024, a 220% increase.
“I'm just not sure what to do because we have to have an insurance policy,” Blackett said.
Many forces driving up premiums
Blackett said governing documents for her community’s association cap dues increase at 5% per year. So her association has to raise dues and levy a special assessment later this year to pay for the increased premium.
The Brookside Association also learned they could buy a more inexpensive policy if work was done at each unit to mitigate aluminum wiring. Owners of the 30 units are rushing to get that work done at a cost of up to $5,000 per unit.
Carole Walker, executive director of the Rocky Mountain Insurance Information Association, said unaddressed maintenance can also drive up HOA insurance premiums. She said some HOA boards defer crucial maintenance to lessen the impact of monthly dues.
“I recently saw a headline that said ‘If your HOA dues aren’t going up, you need to ask why'" Walker said. “Because you need to make sure that you're making good fiscal financial decisions to maintain these buildings for the safety and viability of the building. That is something, unfortunately, their insurance company looks at and cares about when they're making the decision to insure you.”
Walker said increases in HOA premiums are happening nationwide.
“But in Colorado, there's additional pressure from hail, wildfire risk, you add to that liability risk,” she said.
Some insurers have left the market in Colorado over those concerns.
“Anytime you have fewer insurance companies, there's less competition, that also is going to drive prices and availability,” Walker said.
Not to mention, she said HOA insurance policies haven’t been profitable for insurance providers.
“Unfortunately, we have seen if you look over the last decade, that there hasn't been an underwriting profit in any single year over the past decade,” she said. “And we've seen that multi-peril commercial, which is HOA insurance, at a 23% loss.”
Walker said changes to laws allowing homeowners to sue over construction defects are also driving up rates. Reinsurance rates are also a concern for insurance companies, she said.
How to solve the problem
“We're working with state legislators on really what are the problems so we can identify the right solution,” Walker said.
State lawmakers have proposed a bill that would implore the state’s insurance commissioner to study the problem. The bill, which passed out of a state house committee this week, would require a report from the commissioner on January 1, 2026.
“It's a real problem and I don't know how to solve it,” Foley-Healy, who testified in favor of the bill during that committee hearing Wednesday, said.
She was critical of the timeline of the bill and said the report should be finished sooner so solutions happen faster for the people struggling to pay the bills for the massive increases.
“For affordable housing, it's a tragedy,” she said. “You can build affordable units. But if you can’t insure them for a reasonable amount of money, the people who need those units can't live in them.”
Hayes said she isn’t sure yet what she’ll have to cut to cover the $300 per month increase in her monthly dues. She may have to skip a visit or two to see her granddaughter in Salida.
And if the increases continue, she may have to reconsider even more.
“I’m not sure whether I can afford to stay in Colorado, that’s what it comes down to,” Hayes said. “Colorado is pricing a lot of people out.”
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