Did you know that the cost of homeowners’ insurance on a median Minnesota home has increased by $1,200 since 2019?
For many families who are facing this new reality, it’s an incredibly painful hit to their budgets.
And for condominium and townhome owners, there’s an added layer of complexity that most people don’t see coming.
The frequency of severe weather events combined with rising labor and supply costs is fundamentally reshaping the insurance market.
Because of this significant shift, the need to understand their personal HO6 policies and loss assessment coverage is more critical than ever.
The Hidden Risk: Skyrocketing Deductibles
This hidden risk became the focus of a new Minnesota legislative task force, created to examine homeowners and commercial property insurance.
Jake Christenson, CEO/Founder of RowCal and a Board Member of Minnesota Community Association Advocacy (MCAA), recently testified before the group, shedding light on a growing crisis in condo and townhome communities.
Jake described a startling reality: master policy deductibles, especially for wind and hail, have ballooned to five percent or more of building values. This is a massive shift from the flat deductibles (e.g., $10,000) common just five years ago.
In many communities, that translates to hundreds of thousands of dollars in potential assessments shared across homeowners. Most residents believe their HO6 policy will cover these costs, but roughly 20% of owners are underinsured or carry caps that leave them exposed.
The result? Unexpected invoices blindside families, boards scramble for funds, and community trust is shaken.
Jake presented a solution to the task force, stating that homeowners must have clear, consistent standards and assurances regarding their loss assessment coverage.
They need straightforward explanations from carriers and agents. They need confidence that their HO6 policy aligns with the master policy deductible reality of today, not what it looked like a decade ago.
The problem isn’t just financial, it’s relational.
When assessments hit without warning, frustration spreads.
Media coverage often paints associations as predatory, while unpaid board members and management teams are dragged into disputes they didn’t create. The real issue is a system that shifted risk onto homeowners without adequate transparency.
When owners cannot pay these assessments, associations must delay crucial repairs, secure expensive bank loans, and tap into reserves meant for long-term capital planning.
A Path Forward
Thankfully, the task force is exploring solutions.
Options include minimum coverage standards, required transparency in policy language, and incentives for better risk management, all aimed at protecting homeowners and reducing community-level financial strain.
Programs like Minnesota’s Strengthen Homes initiative, which promotes fortified roofing and other proactive measures, may also help stabilize insurance markets over time.
For HOAs, boards, and management companies, the lesson is clear: proactive communication and education are critical.
✨ Homeowners need to know what their policies cover, what they don’t, and how to prepare for worst-case scenarios before a storm hits.
Insurance provides peace of mind, community stability, and essential financial protection.
Minnesota homeowners deserve transparency along with it. Associations deserve clarity. And everyone deserves a system that doesn’t surprise them in the aftermath of a storm.
Are your Board members feeling the stress of this crisis? Our experience can help. Reach out to us today to see how we work to build confidence and financial protection into communities. Contact us today.