Why it matches what the state already documented

The Colorado Division of Insurance's own market study, delivered under HB24-1108 and released in January 2026, reported stakeholders describing HOA deductibles that have “climbed to unprecedented levels, sometimes reaching 10%,” and warned in the same document that “Board members, often volunteers with full-time careers, lack the time and expertise to navigate complex insurance decisions and frequently rely on agents whose advice may be incomplete or inaccurate.” It noted that boards misunderstand coverage, “leading to covenant violations and coverage gaps.”

The reported facts show every link in that chain: a deductible far above what the governing documents contemplated, a special assessment owners could not absorb, and liens reaching individual units.

The checklist, and it applies to every Colorado association

1. Read the declaration's deductible provision before you bind or renew — not after a loss. Many Colorado declarations cap the association's deductible by formula: a percentage of insured value, a dollar figure, or the lesser of the two. That number is a term of the community's own contract with its members.

2. If the only available quote exceeds the declaration's cap, treat it as a governing-documents conflict to resolve before binding. Not a detail to reconcile later. The options, each a question for counsel, are an amendment, a documented board finding, or a deductible buy-back layer.

3. The buy-back layer now has settled standing with lenders. Freddie Mac Bulletin 2026-C, issued March 18, 2026, provides expressly that “PUDs, ground lease communities, condominium HOAs and Cooperative Corporations may purchase a deductible buy-back insurance policy to meet our deductible requirements, provided the policy meets all other applicable property insurance requirements in Guide Chapter 4703.” For a Colorado community facing a large hail deductible, that is a named, lender-compliant route.

4. Model the per-owner number and publish it before the storm. Divide the deductible by the number of units and tell owners that figure at the annual meeting, in writing. A $3.2 million deductible in a community of 150 homes is a $21,000 exposure per home whether or not anyone has said so out loud.

5. Tell owners what loss-assessment coverage on their own policy would cover, and what limit would be needed against the association's actual deductible. This is now doubly important: both Fannie Mae and Freddie Mac require, for applications received on or after July 1, 2026, that where a master policy carries a per-unit deductible the borrower hold an HO-6 with a limit at least equal to that deductible — and both cap the per-unit master-policy deductible at $50,000. An owner whose HO-6 limit falls short will fail lender review on resale or refinance.

6. On any large repair contract, document the bids and any affiliation between the management company and a bidder. Whatever the outcome in Colorado Springs, an unaffiliated-bid record costs nothing to keep and answers the question before it is asked.

The lien exposure is the part boards underestimate

The detail that makes this story unusual is not the deductible. It is that the liens were filed against individual properties, not the association.

An owner who paid their share of a special assessment can still find a notice recorded against their home arising from work the association contracted for. That is a different exposure from an assessment lien, and it is not one an owner can cure by paying the association.

For a board, the practical consequence is that the mechanics of paying a contractor — lien waivers on each draw, confirmation of subcontractor payment, and a final release — are not administrative housekeeping on a project of this size. They are the mechanism that keeps liens off members' homes.

The wider setting

Colorado condominium association insurance premiums roughly doubled between June 2022 and June 2023 on reported figures, and the state's own study put HOA written premium up 115% between 2020 and 2024 with average premium per $1,000 of insured value up 44%. Reported cases include the Wildflower townhome community going from $65,000 a year in June 2022 to $437,000 in June 2023, and a Castle Rock community's premium rising 600% from $197,000 to $1.36 million, nearly tripling monthly dues from $300 to $820. HOA attorney Molly Foley-Healy told state legislators the increases represent the biggest crisis she has seen in associations in seventeen years of practice.

Governor Jared Polis has set a goal of cutting average Colorado homeowners insurance costs by about $800 annually by the end of 2027. SB26-155, signed June 4, 2026, creates a hail-roof grant enterprise inside the Division of Insurance funded from January 1, 2027. Whether association-owned roofs qualify for those grants is not answered by the act.

None of which helps a community that has already taken the deductible. The reserve and deductible decision is made at renewal, and it is made by the board.