Over the past several years, property insurance carriers have been quietly adding new policy conditions that significantly impact how and when property claims must be reported. These provisions often address wind and hail damage, two of the most frequent causes of property losses for community associations.
For HOA boards and property managers, understanding these requirements is more important than ever. Failure to report a claim within the timeframe required by the policy could lead to reduced claim payments or even a complete denial of coverage.
Why Insurers Are Adding Loss Reporting Requirements
Historically, it was common for hail damage claims to be filed months or even years after the storm occurred. Often, roofing contractors or consultants would identify potential hail damage long after the event and encourage associations to file claims.
From an insurer’s perspective, delayed claims create several challenges:
- It becomes difficult to determine when the damage actually occurred.
- Weather events may overlap, making causation unclear.
- Roofs may experience additional deterioration over time.
- Inspections become less reliable as evidence fades.
- Property policies generally respond on an occurrence basis, meaning the insurer providing coverage at the time the damage occurred is responsible for paying the claim. When communities change insurance carriers over time, determining which insurer was insuring the property when the damage occurred can become challenging.
To address this, many carriers are adding “loss reporting conditions” that require claims to be submitted within a specific period after the date of loss.
What These New Policy Conditions Look Like
While the exact wording varies between carriers, the intent is the same: claims must be reported quickly. These conditions are typically found within policy endorsements or within the “Duties in the Event of Loss” section of the policy. Because policy language varies significantly between carriers, boards and managers should review these provisions carefully at each renewal.
Some examples include:
30-Day Reporting Requirement
Failure to report a claim as soon as possible (but no later than 30 days after the date of loss) may result in a reduction in the adjusted claim payment or possibly denial of claim.
180-Day Hail Reporting Requirement
Some policies specifically state that hail-related losses must be reported within 180 days of the event.
Broad Property Loss Reporting Requirements
Other policies apply the condition to all property claims, not just wind or hail.
In practical terms, this means a storm that damages the roof in May may no longer be eligible for coverage if it is first reported the following year—even if the damage is legitimate.
Why This Matters for HOA Boards and Property Managers
Community associations are responsible for maintaining and protecting shared property, which often includes roofs, siding, and other exterior building components. Because of this, storm events should trigger a proactive inspection process.
Waiting months to evaluate potential damage can now create serious insurance problems.
Without timely reporting:
- The carrier may reduce the claim payment
- The carrier may deny the claim entirely
- The association may be responsible for 100% of the repair cost
A Recent Colorado Supreme Court Decision Adds Important Context
In March 2024, the Colorado Supreme Court issued a significant ruling affecting late notice of property insurance claims in Gregory v. Safeco Insurance Company of America and Runkel v. Owners Insurance Company.
The Court held that Colorado’s “notice-prejudice rule” now applies to first-party homeowners’ property insurance policies. Previously, this rule had primarily been applied to liability policies.
Under the notice-prejudice rule:
- An insurer cannot automatically deny coverage simply because a claim was reported late.
- Instead, the insurer must show that it was actually prejudiced by the delay in order to deny the claim.
In the case before the Court, two homeowners filed hail claims that were denied because they were submitted after the policies’ one-year reporting deadlines. Lower courts initially sided with the insurers, but the Colorado Supreme Court reversed those decisions.
The Court concluded that because property policies are occurrence-based policies, coverage is triggered by the event itself (such as a hailstorm), not by the timing of the claim. As a result, a strict date-certain reporting requirement alone cannot eliminate coverage unless the insurer can demonstrate that the delayed reporting materially harmed its ability to investigate or evaluate the claim.
To evaluate late notice disputes going forward, Colorado courts will apply a two-step test:
- Determine whether the insured’s notice was late or unreasonable
- If it was late, determine whether the insurer was prejudiced by the delay
The decision was not unanimous. A dissenting opinion argued that strict notice requirements are important for insurers to properly price risk and warned the ruling could disrupt the insurance marketplace.
What This Means for HOAs
While the Colorado Supreme Court ruling may offer some protection for policyholders, it does not eliminate the importance of prompt claim reporting.
Even under the notice-prejudice rule:
- Claims reported late can still be denied if the insurer demonstrates prejudice.
- Disputes over late reporting can lead to litigation, delays, and uncertainty.
- Many commercial property policies, particularly those written for community associations, include specific policy language requiring prompt reporting of losses.
In other words, the safest course of action remains the same: identify and report potential losses as quickly as possible.
Best Practices After a Storm Event
To protect the association and ensure compliance with policy conditions, boards and managers should adopt a consistent process after major weather events.
- Document the Event
Keep a record of significant storms affecting the community, including dates and weather reports when possible.
- Conduct Prompt Property Inspections
Arrange for a qualified professional to inspect roofs and exterior building components shortly after major wind or hail events.
- Take Photos and Maintain Records
Documentation of the property condition immediately after a storm can be extremely valuable if a claim becomes necessary.
Communities should consider having roofs and exterior surfaces photographed or inspected before storm season. Establishing a documented baseline condition can help demonstrate that damage occurred during a specific storm event.
- Consult Your Insurance Broker Early
If there is any question about potential damage, it is often better to discuss the situation with your insurance advisor sooner rather than later.
- Report Potential Claims Promptly
Even if the full extent of damage is not yet known, timely reporting can help preserve coverage under the policy.
The Bottom Line
The property insurance market continues to evolve, particularly in hail-prone regions like Colorado. Many insurers are tightening loss reporting requirements, and community associations are expected to respond quickly after storm events.
Although recent court decisions may provide some legal safeguards, prompt inspections and timely claim reporting remain the best way for HOAs to protect their coverage and financial stability.
Understanding your policy’s loss reporting conditions—and having a clear process in place after major weather events—can make the difference between a covered claim and an uncovered loss.
If your association would like assistance reviewing these policy provisions or establishing a post-storm inspection process, our team is always happy to help.
Brad Henderson is the Executive Vice President and Partner at Network Insurance Services and leads their Community Association Division. He is a second-generation insurance professional. He began his insurance journey at 18 years old, obtaining his insurance licenses in 2008 just a month after becoming eligible under Colorado state law, before attending and graduating from the University of Northern Colorado. His passion for problem-solving and building relationships led him to his niche focus in Community Association Insurance, where he enjoys a consultative approach to partnering with property managers and board members in navigating the complexities of commercial insurance. Reach out to Brad and our team today to learn more about what makes Network Insurance Colorado's First Choice in HOA Insurance, or visit us at www.insureHOA.com.
