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HOA insurance in Texas: the statute you are probably thinking of does not apply
Texas imposes no statutory insurance requirement on a residential subdivision property owners association. Chapter 209 of the Texas Property Code, which governs those associations, contains no insurance provision at all. A subdivision HOA’s obligations come from its declaration, from lender requirements, and from other applicable law — not from Chapter 209. That is a different regime from a condominium association, which does face a statutory mandate under Section 82.111.
The practical consequence: two Texas associations a mile apart can face completely different insurance obligations, and the difference is not negotiable or discretionary. It is determined by which instrument created the association.
Key takeaways
- Chapter 209 is silent The Texas Residential Property Owners Protection Act governs subdivision associations and contains no insurance requirement. This is an inference from the absence of a provision; a specific association may face obligations from instruments this page cannot see.
- The declaration controls For a subdivision association, what must be carried, at what limit and on what valuation basis is set by the recorded declaration, and often by lender requirements layered on top.
- Condominiums are different If units are stacked and the association owns common elements under a condominium declaration, Section 82.111 applies and the analysis changes entirely.
- Four entities, four programs The association, the management company, the board and individual owners are separate legal entities. One policy does not automatically protect another.
- Lenders often set the real floor Where units or homes are financed through the secondary market, lender requirements can exceed anything the declaration says.
What is the difference between the monthly and look-back measurement methods?
Both answer the same question — which employees are full-time and therefore must be offered coverage — but they answer it on different timelines. The monthly measurement method looks at the month you are in. The look-back method looks at a period that has already closed and applies the result forward.
How does the monthly measurement method work?
The employer determines full-time status month by month, asking whether the employee had at least 130 hours of service in that calendar month. There is no advance election, no measurement period and no lock-in. The cost is volatility: an employee can move in and out of full-time status repeatedly, and each change carries an offer obligation with it.
How does the look-back measurement method work?
The employer determines an employee’s status for a future stability period based on hours of service during a preceding measurement period, with an optional administrative period between the two for enrollment processing. An employee who averaged full-time hours during the measurement period is treated as full-time for the whole stability period, regardless of hours actually worked then — and an employee who did not is treated as not full-time for that period.
| Subdivision property owners association | Condominium association | Why it matters | |
|---|---|---|---|
| Governing chapter | Property Code Chapter 209 | Property Code Chapter 82 (or Chapter 81 for pre-1994 regimes) | Determines whether a statutory mandate exists at all |
| Statutory insurance mandate | None | Yes — Sec. 82.111 | The single most consequential difference |
| Property insurance amount | Set by declaration and lender | At least 80 percent of replacement cost or actual cash value | A statutory floor exists only on the condominium side |
| Liability insurance | Set by declaration | Commercial general liability including medical payments, amount set by board but not less than the declaration specifies | Board discretion is bounded on the condominium side |
| Are units insured by the association | Generally no — owners insure their homes | For buildings with horizontal boundaries, yes, but not owner improvements and betterments | Drives who repairs what after a loss |
| Where to look first | The recorded declaration | Section 82.111, then the declaration | Different starting document entirely |
Scroll the table horizontally on narrow screens.
Who this applies to
Authoritative references
Statutes and regulations
- Texas Property Code Chapter 209, Texas Residential Property Owners Protection Act, Chapter 209 in its entirety — Texas Legislature · effective Current through the 89th 2nd Called Legislative Session, 2025Supports: That the chapter governing residential subdivision associations contains no insurance requirementVerified 27 July 2026
- Texas Property Code Chapter 82, Uniform Condominium Act, Sec. 82.111, Insurance — Texas Legislature · effective Current through the 89th 2nd Called Legislative Session, 2025Supports: The 80 percent property insurance requirement, the commercial general liability requirement, the horizontal boundaries rule and the improvements and betterments exclusionVerified 27 July 2026
- Texas Property Code Chapter 81, Condominium Act, Secs. 81.0011 and 81.205 — Texas Legislature · effective Current through the 89th 2nd Called Legislative Session, 2025Supports: That Chapter 81 applies only to regimes created before 1 January 1994 and that its insurance provision is permissiveVerified 27 July 2026
Reviewed 27 July 2026 by Deon R. Williams, M.Jurs, REBC, CLCS, AIC, AINS. Next review July 2027, or sooner if the Texas Legislature amends Chapter 82 or 209 or Fannie Mae revises B7-3-03. 4J Insurance is an insurance brokerage. Nothing here interprets a specific declaration, bylaws, covenants or management agreement, and nothing here is legal advice. Your policy wording, endorsements and governing documents control. Legal interpretation belongs to the association’s counsel.
What actually decides a subdivision association’s coverage
The absence of a statute is not the absence of an obligation
It is tempting to read Chapter 209’s silence as freedom. It is not. It simply moves the source of the obligation. For a subdivision association the binding instruments are the recorded declaration, any lender requirements applicable to homes in the community, and general law. The declaration is where the answer lives, and declarations vary enormously.
This also means no general article — including this one — can tell a Texas subdivision association what it must carry. What an article can do is tell you which document to open and what to look for in it.
Which organization purchases this insurance?
A community association, its property management company, its board of directors and its individual homeowners are separate legal entities with different responsibilities, different insurance obligations and different sources of liability.
- The association typically purchases property coverage for common areas it owns, general liability for those areas, directors and officers liability for board decisions, and often fidelity or crime protection for association funds.
- The management company insures its own operations — errors and omissions, its own general liability, workers’ compensation, cyber, employment practices and crime. None of these insure the association.
- Board members are generally protected through the association’s directors and officers program, not through the management company’s errors and omissions policy.
- Individual homeowners insure their own homes and personal liability. In a subdivision, the association generally does not insure the residences at all.
Contract language can change who responds first. A management agreement may require the manager to name the association as an additional insured, or the reverse, and may add indemnification, waiver of subrogation or primary and noncontributory wording. Those provisions matter — but only if the corresponding endorsement actually exists. A certificate of insurance does not create coverage, a management agreement does not replace insurance, and contract wording does not override policy wording.
Where the lender requirement bites
Where homes in the community are financed through the secondary market, the lender’s requirements can exceed the declaration. This is most visible on the condominium side, where Fannie Mae requires master property coverage at 100 percent of replacement cost and states that policies settling claims on an actual cash value basis are not acceptable. Whether and how equivalent requirements reach a given subdivision association depends on the loan products involved and on the association’s structure.
Related resources
Continue learning
- Condominium association insurance
- What Section 82.111 actually requires
- Master policy versus unit-owner responsibility
- Community associations overview
Use a tool
Property management glossary — Master policy, common elements, loss assessment and property coinsurance, defined.
Discuss the issue
Request a Coverage Audit — Send the declaration and the current policies. We report where they disagree, and refer legal interpretation to your counsel.
Questions boards and managers actually ask
Does Texas law require an HOA to carry insurance?
Not through Chapter 209, which governs residential subdivision property owners associations and contains no insurance requirement. Obligations for a subdivision association arise from its recorded declaration, from lender requirements and from other applicable law. Condominium associations are different and do face a statutory mandate under Section 82.111 of the Property Code.
Does the association’s insurance cover the management company?
Not automatically. The association and its management company are separate legal entities with separate programs. The management company carries its own errors and omissions, general liability, workers compensation and other coverage for its own operations. A management agreement may require one party to name the other as an additional insured, but that only takes effect if the corresponding endorsement is actually issued.
Do board members need their own insurance?
Board members are generally protected through the association’s directors and officers program rather than through a personal policy or through the management company’s errors and omissions coverage. What that program covers, and whether it responds to non-monetary claims or enforcement actions, varies considerably by form.
How do I know whether we are a subdivision association or a condominium?
The recorded declaration decides it, not the appearance of the buildings. Some Texas communities of detached or townhome-style residences were created as condominium regimes. If the declaration created a condominium, Chapter 82 applies and the insurance analysis is entirely different.
Our declaration is silent on a coverage. Does that mean we cannot buy it?
No. A declaration setting a floor does not prevent an association from carrying more, and boards commonly do. What a board cannot do is carry less than the declaration or, for a condominium, less than Section 82.111 requires.
Measurement is a decision you make before the plan year, not during it
The period dates have to be set and documented in advance. Reconstructing them afterwards rarely holds up.