If you’re part of a homeowner association in Eastern North Carolina or considering purchasing a home in an HOA community, 2026 brings some significant challenges you need to know about. While HOAs have always juggled various responsibilities, this year presents a perfect storm of issues that could impact your community’s budget and your wallet.
The biggest challenge? Skyrocketing insurance costs that are forcing HOAs across the region to make tough decisions about coverage, assessments, and community services.
The Insurance Crisis Hitting HOAs Hard
Let’s start with the elephant in the room: insurance premiums are climbing at an unprecedented rate. According to industry projections, homeowners insurance premiums are expected to rise by 8% in 2026 and another 8% in 2027. But here’s the kicker: these are just national averages. Many HOAs, particularly those in areas prone to natural disasters, are seeing increases of 30% to 500%.
For context, homeowners insurance now accounts for a record 9% of typical total monthly housing costs. That’s a significant jump from just a few years ago, and it’s putting serious pressure on HOA budgets across Eastern NC.
What’s Driving These Massive Increases?
- Climate-Related Risks: Hurricane seasons, flooding, and severe weather events have made insurers more cautious about coastal and inland communities alike, even if Eastern NC isn’t considered high risk.
- Reinsurance Costs: These are passed directly onto HOAs as insurance carriers try to offset their own higher premiums.
- Construction and Labor Costs: Inflation in building materials and skilled labor directly impacts replacement costs and premiums.
- Market Competition: Fewer options for HOAs mean higher prices and less flexibility in coverage.
What This Means for Eastern NC HOAs
- Higher Monthly Fees: HOAs may need to increase monthly assessments. Some communities are seeing insurance line items jump by 25-50%.
- Coverage Gaps: Shifting from “all-in” policies to “bare walls” coverage puts more pressure on individual HO-6 policies, which may not be enough.
- Deductible Increases: HOAs are accepting higher deductibles to keep premiums manageable.
- Stricter Underwriting: Insurers want documentation of maintenance, reserve funds, and risk mitigation.
Beyond Insurance: Other HOA Challenges for 2026
- Reserve Fund Pressures: More budget going to insurance means less for reserves and maintenance.
- Technology Demands: Modern communications and amenities require new investments.
- Regulatory Compliance: New rules around accessibility, environmental standards, and transparency add cost and hassle.
- Vendor Cost Increases: Landscaping, maintenance, and services? All pricier now.
Strategies for Eastern NC HOAs
- Review and Update Coverage Immediately: Don’t wait for renewal. Check your property valuations and limits.
- Explore Group Purchasing Power: Team up with other HOAs or management companies for better deals.
- Smart Budget Planning: Budget for at least a 15-20% increase. Set up an insurance reserve fund.
- Strengthen Risk Management: Maintenance, reserve studies, safety, and emergency preparedness help lower premiums.
- Work with HOA Specialists: Partner with professionals who know community association management for guidance.
For expert resources try www.hoaenc.com and this helpful FAQ.
Planning Ahead: What Homebuyers Should Know
- Ask the Right Questions: Request insurance policies, reserve studies, and budgets before buying.
- Review HO-6 Coverage: Be sure your personal condo/townhome policy actually covers loss assessments and gaps.
- Factor in Increases: HOA fees may jump 10-20% annually in response to insurance issues.
The Bottom Line
The insurance crisis facing HOAs in 2026 isn’t a temporary blip—it’s a shift in how communities must prepare and protect themselves. Stay engaged with your HOA board, know your coverage, and work with experts to safeguard your investment and community.
Contact HOA ENC if you want help evaluating communities or want to understand the long-term implications of HOA membership in Eastern NC’s changing market.
