2026-09-10 · Kansas · Compliance

Kansas associations spent two years raising wind and hail deductibles to keep master-policy premiums payable. As of July 1, the deductible that makes the premium affordable can be the deductible that makes the units unfinanceable. Fannie Mae's revised property insurance requirements took effect on that date under Lender Letter LL-2026-03.¹

The three requirements

The master policy must equal at least 100 percent of the estimated replacement cost value. The maximum acceptable property insurance deductible is $50,000 per unit. And where the master policy uses per-unit deductibles, individual unit owners must carry HO-6 coverage.²

The inflation guard coverage requirement was retired at the same time, which is the one item moving in the association's favour.

Why this hits Kansas harder than most states

Because of what Kansas insurers actually pay out. The Kansas Insurance Department recorded 82,498 storm-damage claims in 2025 totalling $879,074,368.54, up 99 percent from $442 million two years earlier — on roughly half as many claims. Sedgwick County alone exceeded $328 million; Johnson County, where Kansas community associations are most concentrated, recorded $90,999,529.91.³

A severity market of that shape is precisely the market in which carriers push percentage deductibles onto wind and hail, and in which associations accept them because the alternative is an unaffordable premium or no quote at all.

The arithmetic that matters

A percentage deductible is calculated on insured value, not on the claim. A community insured for $20 million with a 3 percent wind and hail deductible carries a $600,000 deductible per occurrence. Whether that breaches the $50,000 per-unit standard depends entirely on how the policy allocates it — per unit, per building, or per occurrence across the whole schedule — and that is a policy-wording question, not a percentage question.

1. Fannie Mae Lender Letter LL-2026-03 (March 18, 2026) — condo project eligibility and insurance policy changes ↩
2. Fannie Mae's New 2026 Condominium Lending Guidelines — Michigan Community Association Law Blog, May 11, 2026 ↩
3. Kansas storm claims: $128M hit to Kansas City metro in 2025 — KCTV5, March 5, 2026 ↩
4. K.S.A. 58-4609, Board of directors — Kansas Office of Revisor of Statutes ↩
5. 2026 Fannie Mae and Freddie Mac condo rule changes: key dates ↩