Would you rather pay $100 more a year, or risk a $15,000 special assessment?

That question sits at the center of one of the hardest calls an HOA board makes: how much should an association spend on insurance today to guard against a loss that may never happen.

In an episode of The Uncommon Area recorded live in Dallas, Texas, host Matthew Holbrook sits down with Chelsea Stormes of Alliant Insurance Services and Matt Davidson, chief operating officer of Action Property Management, to talk through the evolving insurance landscape for homeowners and condominium associations.

The conversation centers on Texas, where severe weather and a shifting insurance market have created real challenges, but most of what Chelsea and Matt cover applies to boards everywhere: how to determine the right amount of coverage, what happens when a carrier changes the terms of a policy, and how to weigh insurance costs against every other community priority.

The conversation also covers:

• The difference between a condominium association's master policy and an individual owner's policy, and why that gap can surprise owners after a loss
• How Texas associations navigate hurricanes, tornadoes, hail, flooding, and freezes, and what Winter Storm Uri changed about the market
• The $15,000 gamble: how boards weigh a higher premium against a catastrophic special assessment when setting umbrella liability limits
• What happens when an association isn't at fault, and why an insurer can still choose to settle a claim
• How an unfilled board seat can become its own liability concern
• Admitted versus non-admitted carriers, and why the cheapest option isn't always the safest one
• What an insurance marketing summary is, and why boards should ask for one at renewal
• Why a pattern of smaller claims can worry an insurer more than a single large one

Chelsea and Matthew walk through a real board discussion where maintaining umbrella coverage meant raising assessments, set against the alternative: spreading a catastrophic claim across every owner instead. Neither number is a universal benchmark, but the trade-off is the one every board eventually faces.

Key Takeaways

Coverage gaps hide in the details. A condominium's master policy may only restore units to original construction specifications, leaving owner-made improvements exposed.

Texas is a multi-peril market. Wind, hail, flood, and freeze each carry their own deductible structure, and an association's true cost only becomes clear after a loss.

Higher limits cost more today to avoid paying more tomorrow. Reducing umbrella coverage can lower premiums now while raising exposure to a special assessment later.

Insurers can control the outcome of a claim. Even when an association's liability is disputed, a carrier may settle rather than risk a jury trial.

Governance is part of risk management. An unfilled board seat, left unaddressed, can become relevant in a dispute.

Frequency can matter more than severity. A pattern of smaller, related claims can signal an unresolved maintenance issue to an insurer, affecting renewal pricing and availability.

Questions boards should ask their broker

• Have any coverage limits, deductibles, or exclusions changed?
• Are our property values and community amenities accurately reflected in our policies?
• Do we have appropriate liability and umbrella coverage?
• Which insurance markets were approached, and why were particular carriers recommended?
• Are there outstanding maintenance or risk-management issues affecting our options?
• What should homeowners understand about the limits of the association's coverage?

About Chelsea and Matt

Chelsea Stormes works with Alliant Insurance Services' community association insurance team, advising HOA and condominium boards on property, liability, and umbrella coverage.

Matt Davidson is the chief operating officer of Action Property Management, overseeing operations across the company's communities in California, Texas, Florida, and Tennessee.

This episode is for general informational purposes and does not constitute legal or insurance advice. Coverage and legal obligations depend on the specific policy, governing documents, and applicable law.