HOA insurance in Texas splits into two layers: the association’s master policy covers the common areas and, for condominiums, the building structure itself, while you are responsible for insuring your personal belongings, most interior finishes, your personal liability, and your share of any special assessment the association issues after a loss. Where exactly that line falls depends on whether you live in a condo or a single-family subdivision, what the master policy’s governing documents say, and how the board has set its deductibles. Getting those details wrong is how owners end up writing five-figure checks after a hailstorm.
What the Association Is Required to Carry
Texas treats condominium associations and single-family HOAs very differently when it comes to insurance obligations.
Condominiums
The Uniform Condominium Act, codified at Chapter 82 of the Texas Property Code, requires every condo association to carry two policies starting no later than the first sale of a unit to someone other than the developer: property insurance on common elements for at least 80% of replacement cost or actual cash value, and commercial general liability insurance in at least the amount set by the declaration.1State of Texas. Texas Property Code 82.111 – Insurance Most well-run boards buy to full replacement cost because actual cash value factors in depreciation and almost always produces a shortfall after a major loss.
When buildings contain units with horizontal boundaries (typical of stacked condominiums), the master property policy must extend to cover the units themselves, though it does not have to cover improvements or upgrades made by individual owners.1State of Texas. Texas Property Code 82.111 – Insurance If coverage meeting these standards is not reasonably available, the association must notify every owner and lienholder in writing. The board also has discretion to set “commercially reasonable deductibles,” which turns out to matter a great deal for wind and hail claims.
Single-Family Subdivisions
Chapter 209, the Texas Residential Property Owners Protection Act, governs most single-family subdivision HOAs and does not prescribe specific policy types or minimum limits. It imposes a general fiduciary duty on the board to protect community assets. The specific coverage requirements come from the declaration of covenants, not the statute. If your HOA is a single-family subdivision, that declaration is the document you need to read.
In practice, these associations carry commercial general liability for shared amenities like pools, playgrounds, clubhouses, and walking trails, plus property coverage on any structures the HOA owns. Your home itself is not insured by the HOA.
Bare Walls vs. All-In: Where the Master Policy Stops
For condo owners, the single most important question is which master policy model your association uses. The answer dictates how much interior coverage you need to buy yourself.
Under a bare walls policy, the association insures only the building’s structural skeleton: roof, exterior walls, framing, insulation, wiring, and piping up to and including the drywall. Everything inside the unit (cabinets, flooring, countertops, plumbing fixtures, appliances) is your responsibility. It is the less expensive model for the association and shifts substantial risk to owners.
An all-in policy covers everything the bare walls model covers plus the original interior fixtures installed during construction: built-in cabinetry, flooring, bathroom fixtures, and similar components that were part of the unit as first built. It still generally excludes upgrades or renovations by later owners. If you replaced the builder-grade countertops with granite, that upgrade is on you regardless of the model.
Your governing documents specify which model applies. If you cannot find it in the declaration, ask the property manager for the master policy’s declarations page. The difference can mean tens of thousands of dollars in personal coverage you either do or do not need.
The Texas Wind and Hail Deductible Problem
This is where owners get caught off guard. Texas is one of the most hail-prone and hurricane-exposed states in the country, and insurers price that risk into master policies through percentage-based deductibles rather than flat dollar amounts. A wind and hail deductible of 2% to 5% of the total insured value sounds small until you run the numbers. For an association insured at $20 million, a 5% deductible means the first $1 million of storm damage comes out of the association’s pocket before the insurer pays a dollar.
Section 82.111 lets boards set “commercially reasonable deductibles,” and percentage-based wind and hail deductibles have become standard in the current Texas market.1State of Texas. Texas Property Code 82.111 – Insurance When damage falls below that threshold, the association pays for the repairs itself. Texas law gives condo associations the power to levy special assessments against unit owners and secure those assessments with a lien on the unit.2State of Texas. Texas Property Code Section 82.113 – Associations Lien for Assessments So after a major storm, you can receive a special assessment bill for several thousand dollars or more to cover the association’s deductible, and the HOA has legal tools to collect it.
This is exactly what loss assessment coverage on your personal policy exists to address, and it is the single most underappreciated coverage gap in Texas community associations.
Flood Is Not Included
Standard property insurance (both master policies and personal homeowners policies) excludes flood damage. Given how much of Texas sits in designated flood zones, this matters. Any property in a Special Flood Hazard Area with federally backed financing must carry flood insurance under the Flood Disaster Protection Act of 1973.3FEMA.gov. Mandatory Purchase For condo associations, the National Flood Insurance Program offers the Residential Condominium Building Association Policy, which covers building damage up to $250,000 per unit.4FEMA. Residential Condominium Building Association Policy The association can also buy contents coverage for commonly owned property in shared areas.5FEMA FloodSmart. Flood Insurance for Condominium Associations
Even outside designated flood zones, Texas weather tends to ignore the maps. A personal flood policy through the NFIP or a private carrier covers damage to your unit’s interior and personal property, which is excluded from both the master policy and your standard HO-6 or HO-3.
Your Personal Policy: HO-6 or HO-3
No matter how comprehensive the association’s program is, it does not cover your personal belongings, your interior improvements in most cases, or your personal liability. That is your job.
Condo owners need an HO-6. It covers personal property (furniture, electronics, clothing) plus any interior components not insured by the master policy. If your association uses the bare walls model, the HO-6 has to cover everything inside the drywall: flooring, cabinets, countertops, fixtures. If the association carries all-in coverage, your HO-6 still needs to cover any upgrades or renovations beyond the original construction. An HO-6 also provides personal liability for incidents inside your unit and additional living expenses if a covered loss displaces you.
Homeowners in single-family HOA communities typically carry an HO-3, which provides broader coverage for the entire dwelling and personal property. The association’s master policy in these communities usually covers only common areas and shared amenities, so your HO-3 is the primary protection for everything about your individual home.
Loss Assessment Coverage
Loss assessment coverage is an optional add-on to your HO-6 or HO-3 that pays your share when the association levies a special assessment to cover an insurance deductible or a loss exceeding the master policy’s limits. The Texas Office of Public Insurance Counsel specifically recommends HOA members consider buying it, noting that without it, you pay the assessment entirely out of pocket.6Office of Public Insurance Counsel. Consider Buying HOA Loss Assessment Coverage
A practical example. A hailstorm causes $800,000 in roof damage across your 100-unit condominium. The master policy has a 5% wind and hail deductible on $20 million of coverage, meaning the first $1 million is the association’s responsibility. The damage falls entirely within the deductible, so the insurer pays nothing. The board levies a special assessment of $8,000 per unit. If you carry loss assessment coverage with a sufficient limit, your personal insurer reimburses the $8,000. If you do not, you write the check.
Standard loss assessment limits are low, often starting at $1,000. Given the size of percentage-based deductibles in Texas, ask your insurer about higher limits. The added premium is usually small relative to the exposure. Loss assessment coverage typically excludes assessments related to flood or earthquake damage, since those perils require separate policies.
Filing a Claim After Damage
When damage affects common elements or the building structure, the association files the claim, not individual owners. Section 82.111 requires that claims for losses covered by the master property policy be submitted by and adjusted with the association.1State of Texas. Texas Property Code 82.111 – Insurance Your first step is notifying the board or property manager as soon as you discover damage, with photographs, video, and written descriptions of what happened and when. The association then contacts its insurer and coordinates the adjuster’s inspection.
For damage to your unit’s interior or personal property, you file directly with your personal insurer. After a major storm, expect to file both: a notice to the association for building-level damage and a separate claim on your HO-6 or HO-3 for interior losses.
Texas does not leave claimants waiting indefinitely. Under the Insurance Code, the insurer has 15 days from receiving a claim to acknowledge receipt and begin investigating. After receiving all requested documentation, it has 15 business days to accept or reject the claim in writing, with a possible 45-day extension if it notifies the claimant of the reasons.7State of Texas. Texas Insurance Code Section 542.056 – Notice of Acceptance or Rejection of Claim Once the insurer agrees to pay, the check must go out within five business days.8Texas Department of Insurance. How Do I File a Homeowners Insurance Claim An insurer that misses these deadlines faces an 18% annual interest penalty on the claim amount plus the policyholder’s attorney’s fees. That penalty has teeth, and it is worth mentioning to an adjuster who seems to be dragging things out.
If the insurer agrees a loss is covered but disputes the amount, most policies include an appraisal clause. Each side picks an independent appraiser; if they cannot agree, a neutral umpire joins and agreement between any two of the three produces a binding figure. Appraisal resolves valuation disputes only. Coverage disputes have to go through negotiation, mediation, or litigation.