The Rise of High Deductibles: What It Means for HOA Boards
By: Cory Neubauer, Nextier Insurance
Over the past several renewal cycles, one trend has become clear in the HOA insurance market: deductibles are rising dramatically.
Where $5,000 or $10,000 deductibles were once common, we are now routinely seeing $25,000, $50,000, and even $100,000 flat deductibles on master property policies. In some cases, per unit deductibles are also being introduced, significantly increasing an association’s out of pocket exposure after a loss.
For HOA boards, this represents a meaningful shift in financial risk.
Higher deductibles mean many losses, particularly water related claims, may never reach the insurance carrier. Instead, the association absorbs the cost directly. Even when a claim exceeds the deductible, the first layer of loss is borne by the community.
In practical terms, associations are retaining more risk than ever before. This is where maintenance becomes critically important.
Proactive maintenance can be the first line of defense against the types of losses that most commonly impact HOAs: roof failures, plumbing leaks, balcony deterioration, and water intrusion. The speed of response and the condition of infrastructure often determine whether a situation remains a minor repair or escalates into a significant financial event.
A delayed response to a plumbing leak can quickly result in multi-unit damage. Deferred roof maintenance can lead to recurring intrusion issues. Neglected waterproofing or balcony systems can create both property damage and liability exposure.
When deductibles are $50,000 or $100,000, these events are no longer just insurance claims. They are direct hits to the HOA's operating budgets or reserves.
There is also an underwriting component to consider. Carriers evaluate loss history carefully at renewal. Frequent losses, even those that fall within the deductible, can negatively impact terms, pricing, and overall market appetite. Communities that demonstrate organized, on-going monthly preventative maintenance programs and strong documentation are generally viewed more favorably.
Proactive maintenance is not simply about preserving property value. It is about reducing retained risk and protecting the financial stability of the association.
For boards, this means ensuring there are clear inspection schedules, documented repairs, leak response protocols, and ongoing evaluation of critical building systems. Strong collaboration between board members, management, and maintenance professionals can materially improve both operational outcomes and insurance positioning.
High deductibles are likely here for the foreseeable future. The communities that navigate this environment most successfully will be those that recognize maintenance as a core component of risk management, not just an operational expense.
In today’s market, insurance and maintenance are directly connected.
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Click here to learn more or contact Cory Neubauer directly at coryneubauer@nxtins.com.
