Community Association Insurance in Texas

Texas at a glance

Condo statute

Tex. Prop. Code ch. 82, Uniform Condominium Act

Requires property insurance to the extent reasonably available, at replacement cost.

HOA statute

Tex. Prop. Code ch. 209, Residential Property Owners Protection Act

Focuses on assessment/foreclosure procedure rather than insurance mandates.

Dominant stock

Large master-planned communities with layered master/sub-association structures

Coverage coordination across layers is a recurring underwriting issue.

Cat exposure

Gulf Coast hurricane wind, North/Central Texas hail, statewide freeze risk

February 2021 freeze caused widespread common-area plumbing losses.

Uniform Condominium Act insurance requirements

Property Code chapter 82 requires condominium associations to maintain property insurance on the common elements and, in many cases, the units themselves, to the extent reasonably available, at replacement cost, and it sets default rules for how insurance proceeds are applied to repair or reconstruction after a casualty unless the declaration provides otherwise. The 'reasonably available' qualifier matters in Texas given how much replacement-cost values have risen in coastal and hail-prone markets, since an association's inability to obtain full-limit coverage in a hard market does not necessarily mean the board is out of compliance, but boards should document their placement efforts and confirm current compliance expectations with association counsel.

Chapter 209 Residential Property Owners Protection Act

Chapter 209 governs most Texas HOAs and focuses heavily on assessment collection, foreclosure procedures, notice requirements, and dispute resolution rather than prescribing specific insurance coverage levels, leaving the insurance-adequacy decision largely to the declaration and the board. Texas's large master-planned communities — often spanning thousands of homes with multiple sub-associations, amenity centers, and sometimes a master association layered above individual HOAs — need coordinated coverage across every layer, since a gap between a master association's liability coverage and a sub-association's coverage can leave a shared amenity like a clubhouse or pool underinsured.

Master-planned communities and layered association structures

Texas is home to some of the largest master-planned communities in the country, with structures that often include a master association responsible for amenities and major common infrastructure alongside multiple sub-HOAs responsible for individual sections, and each layer typically carries its own insurance program. Boards and management companies overseeing these structures should confirm liability and property coverage line up correctly across layers — particularly for shared amenities like pools, clubhouses, and private roads — since ambiguity about which association's policy responds first is a common source of disputed claims in large Texas developments.

Hurricane and coastal wind exposure along the Gulf

Texas Gulf Coast communities from Galveston to Corpus Christi and the Rio Grande Valley face significant hurricane and named-storm wind exposure, which typically shows up as separate percentage-based wind/hail deductibles on association master policies rather than the flat-dollar deductibles more common inland. Coastal associations should coordinate their wind-deductible disclosures with unit owners' HO-6 loss-assessment coverage, since a large percentage deductible applied against a high-value building can generate a loss assessment well beyond what an individual owner's HO-6 policy is sized to absorb.

Hail, freeze, and statewide severe-weather variability

Beyond hurricane exposure, Texas associations face some of the highest hail-claim frequency in the country across North and Central Texas, along with periodic severe winter-freeze events — most notably the February 2021 statewide freeze — that caused widespread plumbing failures in common-area buildings and clubhouses across the state. Reserve schedules for Texas associations should account for both accelerated roof wear from hail and the possibility of a severe freeze event causing simultaneous plumbing losses across many units, a loss pattern that behaves differently from the isolated plumbing failures more common in milder climates.

Who we write this for in Texas

Community association FAQs for Texas