How do we get an insurance appraisal of our HOA buildings, and how often do we need one?

By OurHOA · General information · Revised October 27, 2026

How an HOA or condo board orders a replacement cost insurance appraisal, what Florida, Texas and Colorado require, and how to use it to set the policy limit.

Part of the HOA board handbook: vendors, projects and upkeep.

The short answer

An insurance appraisal estimates what it would cost to rebuild the buildings and structures the association insures, at today's labor and material prices. It is the number your property limit should rest on. It is not the county's tax value and not the market value of the units, and it leaves out the land. If the association insures buildings, such as condo buildings, townhome rows under a master policy, or a clubhouse and pool house, the board should know where its limit came from. Many boards inherited a figure from the developer and have raised it a few percent a year since. Construction costs have not moved that neatly, so the limit drifts away from reality and nobody notices until a fire. Florida condominiums have a hard schedule: section 718.111(11)(a)2 of the Florida Statutes says replacement cost must be determined at least once every 3 years, by an independent insurance appraisal or an update of a previous one. Elsewhere, the statute sets a coverage level and leaves the method to the board. Rules vary by state and by your declaration, and this guide is general education, not legal or insurance advice.

What Florida, Texas and Colorado require

Florida. For condominiums, 718.111(11)(a) requires adequate property insurance, and subparagraph 2 lets the association base the amount on replacement cost from an independent appraisal or an update, redone at least every 3 years. Subparagraph 4 lets the association consider its deductibles when it sets the amount, and 718.111(11)(c)3 has the board set deductibles at a board meeting held under 718.112(2)(e), based on available funds and assessment authority. Keep the appraisal with the policies, which 718.111(12)(a)8 makes official records. Texas. For condominiums under the Uniform Condominium Act, Property Code section 82.111(a)(1) requires property insurance on the insurable common elements of at least 80 percent of replacement cost or actual cash value, measured at the policy's effective date and at each renewal. If a building has stacked units, 82.111(b) says the policy must include the units but need not cover improvements and betterments owners installed. Chapter 209 sets no coverage level for single-family HOAs, so look to the declaration. Colorado. Section 38-33.3-313(1)(a) of the Colorado Revised Statutes requires property insurance on the common elements of not less than full insurable replacement cost, less deductibles, at purchase and at each renewal. It excludes land, excavations and foundations. In a building with stacked units, 313(2) adds the units but not finished interior surfaces. If your community predates the act's 1992 effective date, ask counsel which parts apply. Lenders add their own rule. Fannie Mae's Selling Guide B7-3-03, dated August 5, 2026, requires a project's master policy to equal at least 100 percent of estimated replacement cost, and it accepts a project's insurance risk appraisal or the insurer's estimate as proof. Fall short and buyers using those loans may have trouble closing.

Decide what the association insures before you order

An appraiser can only value what you tell them to value, so settle the scope first. Read the declaration's insurance article and maintenance chart, then list every structure the association must insure. In a townhome community that may be every building, or none, depending on how the declaration splits it. In a condo, the statute matters too. Florida section 718.111(11)(f) keeps floor, wall and ceiling coverings, appliances, water heaters and similar unit items off the association's policy, and Colorado and Texas draw their own lines for stacked units. Then add the things boards forget: the clubhouse, pool house and pool shell, cabanas, carports, gatehouses, entry monuments, perimeter walls, fences, mailbox kiosks and maintenance sheds. Some may be scheduled separately on the policy, and some may not be worth insuring at all. That is a call to make with your agent. Write the list down. It becomes the appraisal scope and, later, the property schedule your agent sends to carriers.

Hire the appraiser

Ask your insurance agent and the reserve study provider who does association appraisals in your area, then ask two or three firms for a proposal. Look for a firm that values multifamily and community association buildings, not one that mostly appraises homes for mortgage loans. That is a different job. Ask each firm whether it inspects in person or works from plans and photos, how it prices construction, and whether it will break out a value for every building and structure on your list. Ask whether it shows the foundation and below-grade work separately, since a Colorado-style policy excludes them. Ask what a desk update costs in the years between full appraisals, and how long the report takes. A request you can adapt: 'The association requests a proposal for a replacement cost insurance appraisal of the structures listed on the attached schedule. Please value each structure separately, show the value with and without foundations and below-grade work, state the construction class and square footage you used, and include photographs. Please also quote a desk update in each of the following two years and give a delivery date.' A reserve study is not a substitute. It prices components the association will replace over 30 years, such as roofs and paving, and not the cost to rebuild a whole building after a loss. Use the same site visit for both if one firm does both, but get two separate reports.

What to hand over and what should come back

Give the appraiser what you have: the recorded plat and condo map, building plans if the developer left any, the current policy's property schedule, the reserve study, and a list of major work since construction, such as new roofs, siding, windows or a sprinkler retrofit. Note anything built to an older code, because rebuilding it to current code may cost more. The report should list each structure with its address or building number, square footage, number of stories, construction type, the replacement cost and the insurable value after exclusions. It should state the date of the valuation and the cost data it relied on. If a number looks off, ask. A clubhouse valued at the same cost per square foot as a parking carport is a sign someone used a default.

Use the number at renewal

Send the report to your agent with the property schedule before the renewal goes to market, not after quotes arrive. The insurer will run its own replacement cost estimate. Compare the two building by building, and ask about any gap of more than a few percent. Read the policy's coinsurance clause, if it has one. Many commercial property policies require you to carry a set share of value, often 80, 90 or 100 percent, and cut claim payments if you carry less. Under the usual formula, if a building's replacement cost is $4,000,000 and the clause is 80 percent, you must carry $3,200,000. Carry $2,400,000 and a $500,000 loss pays only 75 percent, about $375,000, before the deductible. An agreed value endorsement suspends that clause for the policy term, and carriers usually want a current valuation before they grant one. Ask your agent which your policy has. Record the decision. A motion you can adapt: 'Moved to accept the replacement cost appraisal dated [date], to instruct the association's agent to set the property limit for [policy] at $[amount] at the [date] renewal, and to schedule the next update for [year].' Our guide on reading an HOA insurance renewal quote covers the rest of the renewal comparison.

A sample timeline

Count backward from the renewal date. 150 days before renewal: pull the declaration's insurance article, build the structure list, and request proposals. 120 days before: hire the firm and send documents. Schedule the site visit with whoever holds keys to the clubhouse, mechanical rooms and roofs. 90 days before: receive the draft report, check it against the structure list, and send questions. 75 days before: final report to the agent with the property schedule. 30 to 45 days before: compare quotes and vote on limits and deductibles at a noticed meeting. After renewal: file the report with the policy and calendar the next desk update and the next full appraisal. Florida condos must redo replacement cost at least every 3 years. Outside Florida, a full appraisal followed by yearly desk updates, and a new site visit after any major renovation, is a sensible pattern. A short owner notice: 'The board has received an updated replacement cost appraisal of the buildings the association insures. The report values the buildings at $[amount], up from $[old amount] in [year]. The new figure will be used to set the property limit at the [month] renewal. A copy is available to owners on request.'

Mistakes boards make

Using the county appraisal district or property appraiser value. That figure is set for taxes, often discounts older buildings, and includes land. It is the wrong number for insurance. If the tax value is what bothers you, our guide on protesting the appraisal of HOA common area property is the one to read. Rolling last year's limit forward by a flat percentage for a decade. Order a real valuation. Accepting the insurer's estimate without checking it. It may be fine. It may also be built on square footage nobody verified. Appraising structures the association does not insure, or missing ones it does. Fix the scope before you order. Cutting the limit to lower the premium. In Texas and Colorado, the statute sets the floor where it applies. Below it, the board may also be giving the carrier a coinsurance penalty to apply after a loss. Losing the report. A new board three years from now needs to know where the limit came from, and in Florida that report is part of keeping the association in compliance.

Sources

These guides are general education for HOA boards and residents, not legal, tax, or financial advice. Rules vary by state and by your community's governing documents - check with a professional for your situation.

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