For Colorado condo owners, relief may finally be on the horizon. House Bill 24-1108, introduced in the Colorado legislature, aims to tackle the skyrocketing insurance premiums that have driven up HOA dues, forced special assessments, and left many condo units languishing on the market. While the timeline for the study proposed in the bill may not offer immediate solutions, it represents a critical first step toward stabilizing housing costs and making condo ownership viable again.
The Problem: Why Are HOA Insurance Premiums So High?
Colorado’s HOAs are grappling with skyrocketing insurance premiums, largely driven by the increasing frequency and severity of hailstorms. The Front Range, including El Paso County, has earned the nickname “Hail Alley” due to its status as one of the most hail-prone areas in the United States. These storms bring significant damage to roofs, siding, and windows, resulting in higher claims for insurers and pushing premiums higher.
Contributing factors include:
- Frequent Hail Claims: Repeated claims for hail damage have strained the insurance market, making Colorado properties more expensive to insure.
- Rising Repair Costs: Inflation, labor shortages, and supply chain disruptions have driven up the cost of materials and repairs, compounding the problem.
- Deferred Maintenance: Many older condo communities have aging roofs and other infrastructure issues that increase their vulnerability to hail damage, making them riskier to insure.
To offset these challenges, HOAs are often forced to accept policies with higher deductibles. While this may reduce premiums slightly, it shifts more financial risk to homeowners and increases HOA dues and special assessments.
The Impact: Slower Sales and Financial Strain
These rising costs have taken a toll on the real estate market, particularly for condos. In El Paso County, where the fastest home sales were recorded in 2021, single-family homes now take three times as long to sell as they did then. Condos, however, are taking five times as long.
The reasons are clear:
- High HOA Dues: Rising insurance premiums have forced HOAs to increase monthly dues, making condos less affordable for potential buyers.
- High Deductibles: HOAs with massive deductibles—sometimes in the millions—make buyers wary of taking on the financial risk.
- Special Assessments: Buyers are further deterred by special assessments, which signal that an HOA may be financially strained.
These factors have left many condo units sitting on the market, eroding property values and creating financial strain for sellers.
A Strategic Recommendation: Renting as a Temporary Solution
For many of our clients, the best recommendation right now is to rent their condos while the legislature works toward a solution. Renting allows owners to offset rising costs and gives HOAs time to improve their reserves. Strengthened reserves can stabilize dues and make the property more attractive to buyers in the future.
This strategy ensures that condo owners aren’t forced to sell at a loss and allows them to maintain flexibility while navigating a challenging market.
House Bill 24-1108: A Crucial First Step
The proposed legislation directs the Commissioner of Insurance to study the property and casualty insurance market for HOAs and recommend solutions. Key areas the study will address include:
- Identifying factors driving premium increases, with a focus on hail claims and their disproportionate impact on Colorado.
- Evaluating insurer practices and levels of competition in the market.
- Recommending strategies to reduce premiums and make deductibles more reasonable.
While the findings won’t be available until January 2026, the study represents a critical step in creating long-term solutions that could stabilize HOA costs, improve condo marketability, and provide much-needed relief for homeowners.
Our Commitment: Honest Advice, Always
At The Johnson Team, we pride ourselves on providing honest, client-focused advice. We don’t chase sales—instead, we focus on finding the best solutions for each client’s unique situation. Whether that means exploring rental options, preparing your condo for sale, or waiting for better market conditions, we’re here to help you make the right decision.
If you’re a condo owner feeling the financial strain of rising HOA dues, special assessments, or slow sales, reach out to us. We’ll provide you with a clear and strategic plan to navigate these challenges.
Conclusion: A Path Forward for Colorado Condo Owners
House Bill 24-1108 is a promising step toward addressing the insurance crisis facing Colorado’s HOAs. While the timeline for solutions may feel long, the bill represents meaningful progress in tackling the root causes of rising costs. In the meantime, strategies like renting out units can provide owners with financial flexibility and relief while stabilizing HOA reserves.
Colorado condo owners deserve stability and solutions, and we’re here to help provide both. If you have questions about your property, don’t hesitate to contact us. Together, we’ll find the best path forward for your unique situation.
