How Insurtech Is Changing Homeowner and Condo Association Insurance

Catastrophic weather and the increasing cost of construction materials led to an 8.4% increase in homeowners' insurance rates between the third quarters of 2020 and 2021¹ — and that, in turn, is resulting in spikes for homeowner association policy premiums.

In addition, changing weather patterns are resulting in hurricane seasons that are more active than ever.² Coupled with inflation and ongoing, high-profile litigation stemming from the 2021 Surfside condominium collapse, finding affordable coverage can be difficult for even the most stable HOA and condo association.

Can insurance technology make a difference?

What insurtech does

Insurance technology, or insurtech, can help HOAs and condo associations find affordable property, general liability, crime and fire policies. Insurtech can mine municipal records and automated building systems to match an HOA with insurance policies tailored to the association’s needs. Insurtech can also improve underwriting accuracy, helping homeowners and condo associations keep a lid on costs.

There are other benefits to insurtech:

• Reduced application time. Using insurtech, an underwriter can pull data about an HOA from multiple sources, reducing application times and eliminating the potential for double entry. Insurance tech can execute policies faster and shorten endorsement processing to 48 hours, cutting costs and potentially lowering premiums for the association.

• Real-time coverage decisions. Insurtech can provide a real-time answer on an application’s acceptance or rejection, giving instant decisions on coverage. For example, once approved, an HOA or condo association can immediately receive a quote and be issued a policy through a binding agreement with their broker.

• Improved accuracy. Insurance technology can access information about property from sources not available otherwise, including drones, satellite images, computer vision, applied AI and other smart devices. This removes the burden on an association to estimate square footage and building system replacement dates.

Insurtech also frees an HOA or condo association from the hassle of providing detailed information about other association-owned or maintained structures on the premises. Insurtech also accounts for the property’s geography and weather, as well as earthquake, flood and wildfire risk.

• Identify discounts. The same data insurtech leverages in underwriting helps calculate premiums — and identifies ways for associations to save money. For example, a carrier using insurtech can reduce premiums for HOAs that employ property managers, which can improve a property’s risk profile and lower premiums.

• Combined, comprehensive coverage. Insurtech can generate a package for an HOA or condo association that includes all necessary coverage. That includes overall liability coverage for the association, its board members, officers and property managers.

In addition, the insurtech-generated packages include structures such as fences, hot tubs, pools and trees on association property and insurance for off-site board meeting venues. Associations can add additional coverage for employee benefits liability, garage-keepers legal liability, hired and non-owned autos, theft and forgeries and social engineering fraud.

Contact HUB International to find out how insurtech can tailor coverage and lower premiums for your homeowners or condo association.

¹ New York Times, “Extreme Weather and Rising Insurance Rates Squeeze Retirees,” February 4. 2022
² NPR, “The 2022 Atlantic hurricane season will be more active than usual, researchers say,” April 7, 2022.