What Condo & Townhome Owners Need to Know Right Now – L&T Newsletter May 2026 Edition

Owning a condo or townhome comes with shared responsibilities through your Homeowners Association (HOA). While HOAs often provide coverage through a master policy, what they cover—and what they don’t—can vary significantly from one community to another.

Some associations may cover exterior structures and certain types of damage, while others may shift more responsibility to the unit owner, including interior elements or even portions of the structure. The only way to truly understand your responsibilities is by reviewing your HOA’s bylaws and insurance documents.

It’s also common—and often required—for HOAs to be listed on your personal insurance policy. This helps keep coverage connected and provides the association with confirmation that you carry the appropriate protection. In some cases, HOAs may require specific coverage limits as part of their guidelines.

Taking time to review these details can help you avoid surprises later. Consider:

• Does your HOA cover exterior damage and maintenance?
• Are interior features (like built-in cabinets, flooring, or fixtures) your responsibility?
• Have there been updates to the HOA’s rules or coverage over time?

If you’re purchasing, reviewing these documents carefully is an important step in the process. If you’ve lived in your home for years, it may be worth requesting a current copy from your HOA to confirm nothing has changed. While associations often communicate updates, it’s always a good idea to stay informed and advocate for yourself.

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Condo insurance is designed to work alongside your HOA’s master policy, but there are areas of protection that many owners may not be aware of until they experience a loss.

Some coverages that are often worth reviewing include:

Loss Assessment / Extended Protection – Helps cover situations where the HOA passes along costs, such as a large deductible, damage below their deductible, or shared expenses from a major loss or lawsuit.

Water Backup Coverage – Important for units with basements or lower levels

Building Property Protection – Your structural responsibility for the unit

Personal Property Coverage – Think of turning your home upside down—everything that falls out is what you would need to replace, and the amount should reflect today’s replacement cost

A helpful way to think about building coverage is this: if the entire building or townhome row experienced a major loss, what portion would you be responsible for rebuilding? That should guide how much protection you carry, especially if you’ve made interior upgrades over time.

Some carriers may also offer options like claim forgiveness, which can sometimes be added at a relatively low cost. This type of feature may help prevent a rate increase after a claim. It’s worth asking if this is an option available to you.

One additional consideration: many owners find that bundling their auto insurance with their condo or home policy can help reduce their overall premium. This will also help lower your monthly mortgage payment if you are escrowing your insurance.

To review your coverage or ask any questions, please email us at info@ltagencygroup.com to arrange a meeting.

There are important changes happening that affect condo and townhome owners, especially if you’re planning to buy, sell, or refinance in the future.

Going forward, lenders are taking a much closer look not just at buyers, but at the HOA itself. This means your association’s financial health, insurance coverage, and overall condition may directly impact whether a loan is approved.

In simple terms, beginning in August 2026, lenders are expected to review:

• The HOA’s financial statements and reserve funds
• Whether the association is adequately saving for future repairs
• The HOA’s insurance coverage
• The condition of common areas and shared spaces
• Any delayed projects, special assessments, or concerns around how funds are being collected and managed

What does this mean for you?

• A buyer may be financially approved, but still denied due to the HOA
• Sales may take longer due to additional review requirements
• Property values may be impacted if financing becomes more difficult within the HOA
• Even well-prepared sellers may face challenges if the HOA’s financial or overall condition raises concerns during the buyer’s loan review

For sellers, it’s helpful to gather HOA documents early, including financials, reserve studies, and insurance information. For current owners, staying informed and encouraging strong HOA management helps protect your home’s value over time.

If an HOA needs to strengthen its reserves, this may also lead to increased HOA dues, as those funds come from homeowners within the community. In addition, certain lenders are expected to begin requiring HOAs to maintain closer to 15% reserve funding levels (up from the more common 10%) starting in January 2027, which may further impact monthly dues and overall HOA financial expectations. 

Taking time now to understand your HOA’s financial position—and how it may affect your home’s value and flexibility in the future-can help you make more informed decisions.

Special thanks to Mike Glick, local real estate advisor, for bringing awareness to these updates. Sources (clickable links): Fannie Mae, Scotsman Guide

Questions about how these HOA updates could affect your condo or townhome? Click below 👇

We believe great service starts with real people who care about helping you feel confident in your protection. This month, we’re highlighting Tipi Konczak, a valued member of our Customer Experience team who supports customers with policy questions, account updates, and day-to-day service needs.

What customers are saying:

"Tipi is who I depend on at the L&T Allstate Agency in Vernon Hills, since becoming a client two years ago. She always takes the time to answer my question(s) and to do the necessary research, and always with great following-up, if needed. May I add, that she could not be any nicer. Tipi is an outstanding reflection on the L&T Allstate Agency! Thanks Tipi." - Recent 5-Star Google Review

A quick hello from Tipi:

“I try to help every customer the same way I would want someone to help me if it were my own policy. Whether it’s answering questions, helping with changes, or even something simple like sending ID cards, I just enjoy helping people and making things easier however I can!”

Click here if you need me! 👇

Your experience matters to us. If you have a moment, we invite you to share feedback through our Customer Satisfaction Survey below—your responses help us understand what’s working well and where we can continue improving how we serve you. If you’d also like to share your experience publicly, a Google Review (👈 click) helps others feel confident choosing an agency that values education, clarity, and long-term protection. We truly appreciate you taking the time, whether privately or publicly.

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Prepared by Megan Dinklenburg to bring helpful, real-life insights to our L&T community. Questions or ideas? Please reach out anytime: meganwodek@allstate.com