Condo association insurance renewal is one of the most consequential decisions a board makes each year. For many boards, it’s also one of the most rushed. A premium gets approved, a policy gets signed, and everyone moves on.
But a blind renewal can be costly, and in a market where insurance premiums have been rising 10 to 20% year-over-year industrywide, with high-risk buildings seeing increases of 30% or more, the stakes of an uninformed renewal are higher than ever.
The most important shift a board can make is committing to what might be called honest shopping: going to market every year, comparing the renewal proposal against every available alternative, and being able to confirm with confidence that whatever decision is made, whether that means switching carriers or staying put, is the right one.
The value isn’t always a lower premium. Sometimes it’s the peace of mind that comes from knowing you didn’t just accept what landed in your inbox.
This checklist is designed to help Chicago condo board members approach insurance renewal with structure, context, and confidence.
Why the Current Insurance Market Demands More Attention
The broader property insurance market has been under significant pressure. National natural disaster activity has driven up costs for carriers across all property types, and condo associations are absorbing those increases alongside everyone else.
In that environment, achieving a modest increase at renewal is often a win. For boards managing condo association insurance, achieving a reduction requires proactive work that includes:
- Completed capital projects
- Strong claim histories
- A thorough, well-organized procurement process
Consider how this might look in practice:
A 62-unit Chicago condo association was with a higher-cost carrier. After a thorough market comparison, the association switched to a more competitive carrier that specializes in condo insurance — resulting in savings of nearly $11,000 on their premium while maintaining quality coverage. Those funds were redirected toward reserves and capital projects. This is an example from a Hales-managed association.
In another example that can be a common scenario at times, a different association managed by Hales received a non-renewal notice due to an aging roof. Rather than scrambling to find emergency coverage at inflated rates, the board completed the carrier-required roof restoration. The non-renewal notice was rescinded, the existing policy remained in place, and the improved building condition positioned the association for more competitive rates at the next renewal.
These outcomes don’t happen by accident. They happen when boards treat renewal as a process rather than a formality.
What Condo Association Insurance Is Required Under Illinois Law
Before reviewing existing policies, it helps to understand what is legally required. Section 12 of the Illinois Condominium Property Act establishes the baseline insurance requirements for all condominium associations in the state.
Illinois law requires condo associations to carry the following coverage types:
Property Insurance: Must cover common elements and the units, including limited common elements, at full replacement cost. Coverage must be sufficient to rebuild in compliance with current building codes.
General Liability Insurance: Minimum of $1,000,000 per occurrence, covering bodily injury or property damage in common areas.
Directors and Officers (D&O) Insurance: Required at a level deemed reasonable by the board, covering past, present, and future board members acting in their official capacity.
Fidelity Bond: Required for associations with six or more units. Must cover anyone who controls or disburses association funds, with a minimum equal to the maximum funds on hand at any given time.
Some associations may also need workers’ compensation coverage, depending on whether they employ staff directly. Governing documents may require additional coverage beyond these statutory minimums.
For a detailed breakdown of each required policy type and what they cover, Cacciatore Insurance’s guide to Illinois-mandated condo association insurance is a thorough resource.
The Condo Association Insurance Audit Checklist
Use the following checklist to guide the board’s review before the next renewal date.
1. Start the Process at Least 60 Days Out
Insurance renewal is not a one-week process. Gathering loss history, submitting building information to brokers, fielding follow-up questions from carriers, and compiling quotes for board review typically takes 45 to 60 days when done properly. Boards that wait until a few weeks before the renewal date limit their options.
Starting early also gives time to address any open loss control recommendations before the renewal is submitted. Carriers that see outstanding items may quote less favorably or decline to quote at all.
2. Confirm All Required Coverage Types Are Active
Start by verifying that the association has all legally required policies in place. Review the current certificates of insurance and confirm each of the following is active:
- Property insurance (common elements and unit bare walls, floors, and ceilings)
- General liability insurance (at least $1,000,000 per occurrence)
- Directors and Officers liability insurance
- Fidelity bond or crime coverage
- Workers’ compensation (if applicable)
If any required policy is missing or lapsed, that should be addressed before the renewal is finalized.
3. Review Coverage Limits Against Current Replacement Cost
Buildings change. Property values shift. A coverage limit set several years ago may no longer reflect the cost to rebuild the building today. Construction costs have risen substantially, and associations that haven’t updated their property limits in recent years may be significantly underinsured.
The board should confirm that the property insurance limit reflects the current full replacement cost of the building, not its market value or original purchase price. If a recent formal appraisal or updated replacement cost estimate has not been completed, this is a good time to request one from the insurer or an independent appraiser.
4. Verify the Policy Type: Bare Walls, Single Entity, or All-In
Illinois condo association property insurance policies typically fall into one of three categories:
- Bare walls: Covers structural framework only, not fixtures or finishes within units.
- Single entity: Extends to original fixtures and built-ins as installed at the time of construction.
- All-in: Covers original fixtures plus improvements and betterments made by unit owners.
The board should confirm which policy type the association holds and communicate that clearly to unit owners. This directly affects what individual unit owners need to carry in their own HO-6 policies.
For a deeper look at understanding how the master policy and individual unit owner coverage interact, boards can explore additional guidance on policy coordination.
5. Review the Fidelity Bond Coverage Amount
The fidelity bond should cover the maximum amount of funds the association could have on hand or under management at any one time, including both operating funds and reserves.
Associations that have significantly increased their reserves since the bond was last updated should verify that the current bond amount still meets that threshold. This is a commonly overlooked step that becomes very relevant if fraud or embezzlement occurs.
6. Confirm Additional Insureds Are Listed Correctly
The property insurance policy should list the board, the association, the management agent, and their employees as insured parties. If the association works with a property management company, that company should be reflected on the policy as well.
Review the policy to confirm that all required parties are correctly named. Outdated or incorrect listings can create complications when a claim is filed.
7. Check Vendor and Contractor Insurance Requirements
Condo association insurance does not cover work performed by third-party contractors. Any vendor or contractor working on the property should carry their own general liability and workers’ compensation insurance, with the association named as an additional insured.
Before renewal, confirm that the association has a consistent process for contractors to provide certificates of insurance before any work begins.
8. Cross-Check the Association’s Governing Documents
The association’s declaration and bylaws may require coverage types or limits beyond the state minimums. These requirements should be reviewed annually to confirm that current policies remain in compliance.
If the governing documents have not been updated recently, it may also be worth consulting with the association’s legal counsel to identify whether any amendments are needed. As noted by KSN Law’s overview of Illinois condo insurance requirements, amendments to the Illinois Condominium Property Act have clarified several key coverage obligations, and associations should confirm their policies reflect current statutory language.
9. Go to Market, Even If You Expect to Renew
This is the step most boards skip, and it’s often the most valuable one.
In roughly 95 percent of cases, the existing insurer will provide a renewal proposal. The real question is how competitive that renewal is compared to what’s available in the broader market. Working with an independent broker, rather than a captive agent tied to a single carrier, gives the association access to multiple markets and allows for genuine comparison shopping. Independent brokers who specialize in condo association insurance are also better positioned to confirm that quotes meet Illinois condominium law requirements and are appropriate for the building’s size and profile.
One important nuance: once a broker submits a quote to a specific carrier on behalf of the association, that carrier is locked; no other broker can submit to the same carrier for that account. For this reason, working with a single well-chosen independent broker typically yields better results than approaching multiple brokers simultaneously.
In roughly half of cases, the existing carrier remains the most competitive option. That’s not a failed process; that’s a confirmed decision.
Boards that can say “we went to market and our current coverage is still the right choice” are in a fundamentally different position than boards that simply renewed without looking.
10. Review Loss Control Recommendations Before Renewal
Insurance carriers issue site-specific safety improvement requirements, known as loss control recommendations, as a condition of maintaining coverage. These are not suggestions; failing to address them can result in less favorable quotes at renewal or, in more serious cases, a non-renewal notice.
Proactively completing these items before going to market strengthens the association’s position with existing and prospective carriers alike. A building that has recently completed a roof replacement, major electrical work, or other capital improvements is a meaningfully different risk profile than one that has deferred those projects, and carriers price accordingly.
There is an added governance benefit here as well. Having loss control recommendations documented in writing from a carrier can be a useful tool for boards that need to build internal consensus around capital improvement decisions.
11. Communicate Coverage Details to Unit Owners
One of the board’s responsibilities is to help unit owners understand where the association’s master policy ends and their own HO-6 coverage begins. After each renewal, a brief summary of the policy type and key coverage limits should be shared with residents.
This helps prevent misunderstandings when damage occurs and provides owners with the information they need to ensure their personal policies fill any gaps.
How Association Management Can Support the Insurance Review Process
Navigating the details of condo association insurance is a significant responsibility for volunteer board members. Between gathering building information, coordinating with brokers, tracking loss control recommendations, and preparing summaries for board review, the process requires substantial time and specialized knowledge:
- Filling out forms
- Tracking down documentation such as warranty start dates for recent capital projects
- Managing back-and-forth with carriers over the course of weeks
A professional association management company can carry most of that load:
- Managing the procurement timeline
- Coordinating with brokers and the existing carrier
- Consolidating quotes into a clear summary for the board
- Flagging issues that require attention
The result is a board that is informed and equipped to make a confident decision, without spending hours on paperwork and follow-up.
Hales Property Management works with condo associations across Chicago to support this process year-round. Because renewal dates vary across buildings, insurance procurement is an ongoing, active part of how the team operates, not a once-a-year scramble.
This systematic approach delivered $254,104 in total premium savings across Hales-managed associations in 2025, with individual associations seeing reductions ranging from thousands to tens of thousands of dollars depending on building size, coverage needs, and market conditions.
Making Insurance Review a Board Priority
A thorough insurance review does not need to be complicated, but it does need to happen consistently and start well before the renewal date. Using a structured checklist each year helps the board confirm that coverage remains adequate, that all required policies are in place, and that the association is positioned to handle the unexpected.
More than that, going to market every year, even when you expect to renew, gives the board something a blind renewal never can: confidence that the decision being made is genuinely the right one.
Understanding condo association insurance requirements and maintaining adequate coverage is a core governance responsibility. When boards approach renewal as an active procurement process rather than an administrative formality, they protect both the association’s financial position and their fiduciary duty to unit owners.
Condo associations in Chicago looking for support with association management, financial oversight, and compliance should request a proposal from Hales Property Management to learn more about available services.
Note: This article is for informational purposes only and does not constitute legal or insurance advice. Condo board members should consult with a licensed insurance professional and legal counsel for guidance specific to their association’s needs and governing documents.
