GRF insurance package came in $1.8 million under budget

FROM THE GRF

Commercial HOA insurance rates in California were not expected to be lower in 2026, according to major insurance carriers like Mercury Insurance. But in Leisure World, the communitywide insurance renewal costs for 2026 are $1.8 million under budget projections, thanks to proactive Golden Rain Foundation (GRF) staff negotiations with the insurance broker. Together they devised a more refined way of forecasting costs, plus there were fewer GRF insurance claims in 2024-25 and fewer natural disasters in the U.S., all attributable to the favorable outcome.

The GRF renewed the insurance package for the whole of Leisure World for the 2025/2026 insurance term late last year. Given two years of unprecedented increases that drove GRF and Mutual assessments higher, GRF was steeled for another big hike.

But proactive risk management on the part of the GRF created better terms, partly attributed to wellmanaged communities that prioritize safety measures. For example, Leisure World’s claim history has improved over the past few years.

After the 2023-2024 renewal that was collectively $1.8 million over budget, GRF instituted a forecasting process with the insurance broker to try and provide a more accurate cost prediction for the next renewal. Unfortunately, the final renewal price isn’t known until after the GRF and Mutual budgets are finalized; this is in large part what led to under-budgeting in the 2023-2024 cycles.

This new forecasting process worked in its first year for 20242025, as the combined policy costs came in approximately $800,000 under budget. For the 2025-2026 renewal, the final cost came in at approximately $1.8 million under budget.

What went right for this renewal?

GRF’s claim history has been improving over the last few years, and cases are resolving, which eliminates uncertainty for insurers on their exposure here. Additionally, Leisure World’s claim pace has slowed from earlier in the decade, so there are fewer open cases than there were in years past.

The 2025 hurricane season in the United States had fewer storms than usual, which offset insurance losses suffered in the Los Angeles County wildfires that same year. As a result, the expected negative impact on property insurance rates didn’t materialize.

GRF’s renewal term—from Dec. 1-Nov. 30—nearly coincides with the end of many insurance carriers’ fiscal year. As the carriers’ year-ends approached, many of them reached out to GRF’s broker late to try and book additional business to meet sales targets. GRF worked with its broker to receive late bids and decrease costs even further.

What to do with the savings generated by this year’s renewal against the more conservative budget figures will be up to each individual Mutual board and the GRF Board to determine.

While there are signs that the insurance market may be softening, the next renewal could see another spike depending on what happens throughout the year in the global insurance market. With a large water rate increase looming, Mutuals may find that the renewal savings generated this year may help offset that known upcoming expense.

DID YOU KNOW? Leisure World has an on-call bus system that can take riders anywhere in the community. Call 562-472-1367 to request a ride.

Insurance renewal costs remained low thanks to fewer claims in Leisure World and fewer natural disasters in the U.S. overall.