Understanding the Surge in Condominium Insurance Premiums

 Posted on July 26, 2024 in Condominium & Homeowner Association Law

Condominium associations across the country are facing a financial strain due to a substantial increase in insurance premiums. A surge in natural disasters, increased litigation, rising construction costs, and inflation largely drive these hikes. This spike in premiums is a significant concern as it directly impacts the budgets of these associations and the dues paid by unit owners. Understanding the issue is important, as is learning more about how condominium associations can benefit from the assistance of a qualified attorney in Illinois.

Why the Increase in Insurance Premiums is a Big Deal

Here is why the increase in insurance premiums matters:

• Budgetary constraints – Condominium associations operate on finely tuned budgets that allocate funds for various things, such as maintenance, repairs, and reserve funds. A large unplanned increase in insurance premiums can disrupt these budgets, leading to potential shortfalls in other critical areas.

• Higher dues for unit owners – As premiums rise, associations often have no choice but to increase monthly dues for unit owners. This can lead to financial strain on families and potentially impact the marketability of condominium units.

• Risk of underinsurance – Some associations may opt for lower coverage limits to manage premium costs, which can be risky. Underinsured properties might face severe financial difficulties in the event of a major loss or disaster, leaving unit owners vulnerable.

How Condominium Association Attorneys Can Help

Lawyers can be helpful in many areas, such as:

• Policy evaluation and negotiation – Attorneys knowledgeable in condominium law can help associations thoroughly review their insurance policies and negotiate better terms or coverage with insurance providers. This includes ensuring the association is not paying for unnecessary coverage while still maintaining adequate protection.

• Legal compliance and guidance – Navigating the legal framework surrounding insurance requirements and changes in state laws can be daunting. Attorneys can ensure that the association remains compliant with all legal obligations, avoiding potential penalties and disputes.

• Enforcing new policies – Legal professionals provide crucial support when it comes to enforcing new insurance-related policies or increased dues. Attorneys can draft clear, legally sound amendments to the association’s bylaws and guide the board through the implementation process to prevent potential conflicts.

Foreclosure as an Alternative for Non-Payment

In instances where unit owners fail to pay increased dues or special assessments required to cover the higher insurance premiums, associations may have the legal right to foreclose on the delinquent units to recoup unpaid fees. While foreclosure is a last resort, it is sometimes necessary to ensure the financial health of the entire community.

Contact Our Arlington Heights, IL Condominium Association Lawyer

The surge in condominium insurance premiums is a significant issue with various implications. If your association is seeking assistance, the Cook County, IL condominium association attorneys at Dickler, Kahn, Slowikowski & Zavell, Ltd. can help. Contact 847-593-5595 for a confidential consultation.