It's possible that insurance rates will stabilize in a few years, so hanging on could be an option. Can she afford to carry a negative cash flow? If so, she could reduce the rent and ride it out. Otherwise, she could dump it, and write off the loss if possible.
She may also have not paid much attention to the Financials when she bought the place, so there's a lesson there.
Unless the condo's out of her area, she should at least start attending HOA Board meetings, better still, she should join the board.*
Another possibility might be moving into it herself, or doing what
@SwordGuy has done and rent below market to give someone a leg up in life.
*Real life, real time example: We bought an older condo with underfunded reserves for our son a couple of years ago. At our price point, it was the best option. We deliberately stayed on title so that one of us could be on the HOA Board. We did this because our son works insane hours. (He's also on the spectrum and far too shy to do it himself.) Currently, it's DH's turn, and he's enjoying it very much.
In CA, all stairs and balconies must be tested, and deficiencies corrected. The property manager feared they would all have to be replaced, which would result in huge assessments and dues major hikes. Instead, DH managed the process. Turns out only seven need to be replaced, not 24. DH figured out they didn't need to be done all at once. He also met with contractors on site to made sure their estimates were accurate to avoid cost overruns. As a result, the HOA will be able to cash flow the project with only a modest dues increase.
Moral of the story: never, ever buy a condo unless you're willing to be on the Board, and scour the reports before buying, even if you have to hire a CPA or RE attorney out of pocket.
Good luck to your friend, and thanks for helping them out,
@2Birds1Stone. You're a mensch.
