Why Did Condo Insurance Go Up in 2025?

If you’re a condo owner, you may have noticed a sharp increase in your insurance premiums in 2025. Many people are asking, “Why did condo insurance go up in 2025?” The reality is that multiple factors—ranging from rising construction costs to climate-related disasters—have contributed to this trend.

In this article, we’ll explore the key reasons behind the surge in condo insurance costs, what homeowners can do to lower their premiums, and how Toby Hansen Agency can help you find the best coverage at the lowest price.

1. Climate Change and Extreme Weather Events

One of the biggest reasons condo insurance rates have skyrocketed in 2025 is the increasing frequency of extreme weather events.

How Climate Change Impacts Condo Insurance:

• More severe hurricanes, wildfires, and storms → Increased damage to condo buildings.
• Rising sea levels → Greater flood risks for waterfront properties.
• More claims from condo owners and associations → Insurers raise premiums to offset costs.

Even if your condo isn’t in a high-risk area, you may still see premium hikes, as insurance companies spread the financial burden across all policyholders.

2. Rising Construction and Repair Costs

Another major driver of higher condo insurance rates is the cost of materials and labor.

Why Construction Costs Are Higher in 2025:

• Material shortages: Supply chain disruptions continue to impact prices for lumber, steel, and concrete.
• Labor shortages: Skilled tradespeople are in high demand, making repairs and rebuilding more expensive.
• New building codes: Stricter regulations require better materials and safer structures, increasing costs.

Since insurers must account for the higher cost of rebuilding after damage, they raise premiums accordingly.

3. Inflation and Economic Factors

Inflation has impacted nearly every sector of the economy, including insurance.

How Inflation Affects Condo Insurance:

• Higher replacement costs for furniture, appliances, and flooring.
• Increased claims processing costs for insurance providers.
• Rising legal fees due to more frequent lawsuits against condo associations.

With all these factors combined, insurance companies are passing higher costs onto policyholders.

4. Increased Condo Association Claims

Condo associations manage shared areas such as lobbies, elevators, pools, and roofs. In recent years, more associations have filed insurance claims, which increases costs for individual unit owners.

Common Reasons for Increased Claims:

• Water damage from burst pipes, leaking roofs, or sprinkler malfunctions.
• Structural issues requiring expensive repairs.
• Liability lawsuits from injuries in common areas.

As these claims become more frequent and expensive, insurers increase rates for everyone in the condo community.

5. Insurance Companies Reducing Coverage or Leaving Certain Markets

In 2025, some insurance providers have stopped offering coverage in high-risk states, especially in areas prone to hurricanes and wildfires.

What This Means for Condo Owners:

• Fewer insurance options → Less competition, leading to higher prices.
• More strict coverage requirements → Higher deductibles and more exclusions.
• Specialized condo insurance policies → More expensive policies to cover gaps in protection.

If you live in a high-risk area, you may have fewer choices and need to pay extra for comprehensive coverage.

6. Increased Risk of Lawsuits Against Condo Associations

Legal disputes between condo boards and residents have been rising. More lawsuits mean higher liability insurance costs, which ultimately get passed down to condo owners.

Common Lawsuits Affecting Condo Insurance Costs:

• Disputes over assessments and fees.
• Negligence claims for poor maintenance.
• Personal injury lawsuits from slips and falls.

Even if you’re not directly involved in a lawsuit, the rising cost of liability insurance impacts all condo owners in a community.

How to Lower Your Condo Insurance Costs in 2025

While rising insurance costs are frustrating, there are ways to reduce your premiums.

1. Compare Insurance Providers

Not all insurers raise premiums at the same rate. Toby Hansen Agency compares nearly 100 carriers to find the best deal for your condo insurance.

2. Increase Your Deductible

Raising your deductible can lower your monthly premiums. Just make sure you have savings to cover the deductible if needed.

3. Improve Condo Security and Maintenance

Installing security cameras, fire alarms, and water leak sensors can reduce risk and qualify you for discounts. Condo associations should also stay on top of maintenance to prevent costly claims.

4. Bundle Insurance Policies

If you have auto or life insurance, bundling them with your condo insurance can lead to savings.

5. Ask About Available Discounts

Many insurers offer discounts for:

• Being claim-free for a certain number of years.
• Having a newer or recently renovated condo.
• Being a senior or part of certain professional organizations.

6. Work with an Independent Insurance Agency

Rather than relying on a single insurer, work with an independent agency like Toby Hansen Agency to compare multiple policies and find the best rate.

Protect Your Condo Without Overpaying

If you’re wondering why condo insurance went up in 2025, the answer lies in a combination of economic, environmental, and regulatory factors. While you can’t control rising costs, you can take steps to reduce your premiums and find a better policy.

At Toby Hansen Agency, we work with nearly 100 carriers to help condo owners find the best coverage at the lowest possible price. Fill out our free quote request form below to see how much you can save today!