I attended the Community Associations Institute (CAI) Annual Conference this week wearing two hats. One was as a lawyer who has spent a career representing policyholders. The other was as the president of my condominium association. That second hat made the risk management meeting and discussion hit a little closer to home.
The discussion was candid. Insurance brokers, carrier representatives, risk managers, community association managers, and others openly discussed what many condominium boards are now learning the hard way. The old insurance underwriting world is gone. The days when a condominium association could submit an application, provide loss runs, answer a few routine questions, and wait for renewal terms are fading fast.
Today’s condominium underwriting is becoming a data hunt. Artificial intelligence is now part of underwriting. Programs are being designed to pull as much information as possible about condominium properties from public and semi-public sources. Building department records. Permit histories. Roof data. Fire protection information. Flood information. Aerial imagery. Claims history. Construction data. Occupancy information. Protection systems. Exposure data. The underwriter’s file is no longer just what the board, manager, or broker sends in. It may include what the carrier’s technology can find without asking.
Association boards and managers often treat insurance renewal as a broker’s annual chore. Gather the loss runs. Update the values. Fill out the application. That approach is outdated.
Underwriters want more complete, current, and credible information. Loss runs still matter, but they are only one part of the story. Underwriters increasingly want to know the age and condition of the roof, plumbing, electrical systems, HVAC systems, life safety systems, sprinklers, alarms, and other infrastructure. They want to know whether aging systems have been replaced or merely patched. They want to know whether a condominium association has a plan or is just hoping nothing breaks before the next annual meeting.
A condominium building is not simply a collection of units stacked vertically. It is a living physical asset. Pipes corrode. Electrical systems age. Roofs deteriorate. Concrete spalls. Waterproofing fails. Elevators need modernization. Fire systems require maintenance. Deferred maintenance may save money for one board’s budget cycle, but it can become an underwriting red flag for the next one.
This is where insurance, risk management, and board governance collide. A board that refuses to confront aging infrastructure may think it is avoiding a political fight with owners. In reality, it may be creating a much larger financial problem. If underwriters view the property as poorly maintained, outdated, or lacking credible information, the association may face higher premiums, larger deductibles, reduced limits, exclusions, or fewer carriers willing to quote at all.
CAI has warned that community associations, especially condominiums and housing cooperatives, are facing rising premiums, cancellations, higher deductibles, and diminishing coverage options. The insurance marketplace is asking harder questions. The most important question for boards is no longer, “What did our loss runs show?” The better question is, “What story does our property tell an underwriter?”
If the story is that the board has current reserve studies, credible maintenance records, documented repairs, recent inspections, permit histories, roof reports, plumbing updates, electrical upgrades, fire system testing, and a plan for capital improvements, that is a better story. It does not guarantee cheap insurance. But it gives the insurance broker something to sell other than hope. If the story is that nobody knows the age of the pipes, the electrical panels are original, the roof records are missing, the board has postponed repairs for years, and the application contains vague answers, obtaining affordable insurance will be a problem.
The rise of artificial intelligence in underwriting makes this even more important. AI is a tool that can rapidly collect, compare, and flag property information. If an association says one thing on an application and public records suggest another, there may be questions. If building permits show incomplete work, repeated water damage repairs, roof issues, or outdated systems, those facts may become part of the underwriting analysis. If aerial imagery suggests roof deterioration or surrounding exposure concerns, that matters. If flood data, wildfire maps, crime data, construction information, or other external sources indicate elevated risk, those factors will influence pricing and availability.
A condominium association should not wait until sixty days before renewal to begin thinking about insurance. That is like waiting until the boat is taking on water before looking for the bilge pump. Boards should treat insurance renewal as a year-round governance function. Managers should maintain organized records. Brokers should be brought into the discussion early. Engineers, contractors, reserve specialists, and risk managers should be part of the story before the application goes to market.
My takeaway lesson from the CAI discussion is that underwriting has become more investigative. Boards must become more proactive.
I have said for years that insurance is a promise. For condominium associations, the insurance marketplace is telling associations that if you want the promise at a reasonable price, you must be prepared to prove the risk. This means documenting maintenance, updating old systems, keeping accurate records, correcting hazards, confronting building conditions, and funding reserves.
For those interested in this topic, I suggest reading “How the Community Association Insurance Renewal Process Has Changed — and What Managers Need to Know.”
Thought For The Day
“An ounce of prevention is worth a pound of cure.”
Benjamin Franklin