Master Policy vs Unit-Owner Responsibility in Texas Condominiums

Section 82.111(b) of the Texas Property Code states that where a building contains units having horizontal boundaries, the association’s required property insurance must include the units — but need not include improvements and betterments installed by unit owners. The association insures the unit as built. The owner insures what the owner added.

That is the statutory default. The declaration can extend the association’s obligation further, and the policy can be written more broadly than either. But when a loss occurs and nobody planned for it, this is the line that gets drawn.

Key takeaways

Horizontal boundaries triggers it The requirement to include units attaches where the building contains units having horizontal boundaries — stacked units sharing floors and ceilings.
The unit is included Where that applies, the association’s property insurance must include the units, not only the common elements.
Owner upgrades are excluded The statute expressly states the insurance need not include improvements and betterments installed by unit owners.
The declaration defines the boundary Statute says the units are included. What counts as the unit — where its boundary falls — is defined by the declaration, not by the statute.
Owners still need a policy Because of the improvements and betterments exclusion and the deductible question, a unit-owner policy is not redundant with the master policy.
Nothing prevents broader coverage Section 82.111(c) allows the declaration to require other insurance and allows the board to carry more.

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.

Where responsibility falls by default in a Texas condominium with stacked units
	Association master policy	Unit owner policy	What decides it
Common elements	Required by Sec. 82.111(a)(1)	No	Statute
The unit as originally built	Required by Sec. 82.111(b) where horizontal boundaries exist	No	Statute
Owner-installed improvements and betterments	Need not be included	Yes, in practice	Sec. 82.111(b), then the declaration
Owner personal property	No	Yes	Nature of the property
Owner personal liability	No	Yes	Nature of the exposure
Master policy deductible	Absorbed per the declaration	Loss assessment coverage may respond to an owner’s share	Declaration and the owner’s policy
Where the unit boundary falls	Not addressed by statute	Not addressed by statute	The declaration’s definition of unit
Loss of use during repair	Depends on the master policy	Depends on the owner’s policy	Policy wording on both sides

Scroll the table horizontally on narrow screens.

Authoritative references

Statutes and regulations

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 82, Uniform Condominium Act, Sec. 82.002, Applicability — Texas Legislature · effective Current through the 89th 2nd Called Legislative Session, 2025Supports: Which condominiums Chapter 82 governs, and which of its sections reach regimes declared before 1 January 1994Verified 27 July 2026

Explanatory guidance

Selling Guide B7-3-03, Master Property Insurance Requirements for Project Developments, B7-3-03 — Fannie Mae · effective 07 February 2024Supports: The 100 percent replacement cost requirement, the unacceptability of actual cash value settlement, and the 5 percent maximum deductibleVerified 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.

Where does the unit end?

Section 82.111(b) says the insurance must include the units. It does not say what a unit is. That definition lives in the recorded declaration, and declarations differ materially — some draw the boundary at the unfinished surface of perimeter walls, floors and ceilings, others include or exclude specific building components, and some address fixtures and finishes explicitly.

Two associations across the street from one another can therefore apply the same statute and reach different answers about who insures a kitchen cabinet. The declaration is not optional reading, and no article can substitute for it.

What counts as an improvement or betterment?

The statute excludes improvements and betterments installed by unit owners. In a building thirty years old with multiple ownership changes, establishing what was original and what was installed by a previous owner is a factual question that surfaces at exactly the wrong moment. Associations that maintain original specification documents are in a far stronger position after a loss than those that do not.

Which organization purchases this insurance?

Four entities, four programs. The association purchases the master property program covering common elements and, where horizontal boundaries exist, the units as built. Individual unit owners purchase coverage for their improvements and betterments, personal property, personal liability and loss assessment exposure — the last of which is what may respond to an owner’s share of a master policy deductible. The management company insures its own operations and insures neither the building nor the owners. Board members are protected through the association’s directors and officers program for decisions they make, including decisions about coverage.

A certificate of insurance does not create coverage, a management agreement does not replace insurance, and contract wording does not override policy wording. Where an owner and the association disagree about responsibility, the declaration and the two policies decide it — and interpretation of the declaration belongs to counsel.

Related resources

Continue learning

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 master policy. We map the unit boundary against what the policy actually covers, and identify the gap owners will otherwise find after a loss.

Does the association have to insure the inside of a unit?

Where the building contains units having horizontal boundaries, Section 82.111(b) requires the association’s property insurance to include the units. It expressly states the insurance need not include improvements and betterments installed by unit owners. Where the unit boundary falls is defined by the declaration, not by the statute.

What is an improvement or betterment?

Broadly, something a unit owner installed rather than something delivered with the original construction. The practical difficulty is evidentiary: in an older building with several past owners, establishing what was original can be genuinely difficult, which is why original specification documents are worth retaining.

Who pays the master policy deductible?

The statute permits commercially reasonable deductibles but does not allocate them. The declaration generally does. Where an owner is assessed for a share, loss assessment coverage on the owner’s policy may respond, subject to that policy’s limit and terms — and those limits are frequently much lower than the master deductible.

If the association insures the unit, why does an owner need a policy?

Because the statutory requirement stops at improvements and betterments, and because the owner still needs personal property, personal liability and loss assessment coverage. The two policies are complementary rather than duplicative.

Can the association choose to insure more than the statute requires?

Yes. Section 82.111(c) provides that the declaration may require the association to carry other insurance, and that the board may in any event carry any other insurance it considers appropriate to protect the condominium, the association or the unit owners.

One sentence in the Texas statute decides most post-loss disputes between a condominium and its owners