Homeowner Association fees are skyrocketing much to the dismay of residents, but the overall cost may not reflect the whole story.
$400. $800. $1,000. These are numbers you can easily find tied to homeowners association fees. And they are giving potential home and condo owners sticker shock.
The reason fees are increasing is due to insurance claims, says Mark Foster, co-owner of the HOA Leadership Network.
Most HOA's provide a master insurance policy against natural disasters. In Minnesota, it isn't hurricanes, floods, or really even tornadoes that are the main issue.
"Between 2020 and 2025, Minnesota alone was ranked seventh among 50 states for major hail events," Foster says. "So with hail comes damage, right? And with damage comes insurance claims. So, all of that has really boosted insurance company's premiums."
And with hail damage comes insurance claims. And with insurance claims come increased costs.
"Unfortunately what has happened over the past five years is, rather than having a really good deal in an HOA for insurance, we've seen that number start to normalize," Foster explains. "That is to say that it's getting closer and closer to the same amount of money that you might be spending across the street in a non-HOA."
Foster says the average monthly assessment being charged now is around $460 per month.
"If you lived in a non-HOA but you wanted your lawn mowed for you and you wanted your driveway cleared of snow in the wintertime, if you wanted to have a decent price on your sanitation pickup, internet, flower maintenance, and that type of thing, you would be paying for all of those things out of pocket," adds Foster.
Recent research found that average premiums for home insurance climbed an inflation-adjusted 28% between 2017 and 2024 to an annual cost of $2,750. Their research found reasons for the increases: Roughly a third came from higher construction costs, and another 20% came from greater disaster risks. But it also noted the higher costs for financial instruments such as reinsurance, which insurers purchase to protect them from catastrophic financial losses.
