Association master policy
Generally addresses common elements, building property within its defined responsibility, and association liability. Its scope, limits, exclusions, and deductible affect every unit owner.
Two policies, one property
Condo coverage is divided between the association and the unit owner
A condo owner does not insure the entire building like a single-family homeowner. The association’s master policy protects association-level property and liability interests; the owner’s HO-6 protects the owner’s unit-level property and personal exposures.
Unit owner’s HO-6
Can cover building items assigned to the owner, personal property, loss of use, personal liability, medical payments to others, and eligible loss assessments.
The central underwriting question
Where does the association’s insured responsibility end and the owner’s begin? The answer comes from the declaration, bylaws or other dedicatory instruments, the master policy, and the HO-6—not from the words “condo” or “walls-in” alone.
Unit-owner policy
HO-6 coverage map
The coverage letters are policy-section labels. The amount needed under each section depends on what the owner is responsible for and what the master policy leaves uninsured.
Building property
Interior building items and improvements that are the unit owner’s insurance responsibility, subject to the HO-6 form and master-policy boundary.
Personal property
Furniture, clothing, electronics, and other covered belongings, including eligible property away from the residence.
Loss of use
Additional living expense and other covered benefits when a covered loss makes the unit unfit to live in.
Personal liability
Defense and covered damages when an insured is legally liable for bodily injury or property damage to others.
Medical payments to others
Limited no-fault medical payments for eligible injuries to other people, subject to policy terms.
Loss assessment
The owner’s covered share of certain association assessments, up to the applicable limit and any separate deductible-related sublimit.
Master-policy coordination
“Bare walls,” “single entity,” and “all-in” describe different boundaries
These terms are useful shorthand, but they are not perfectly standardized. The association documents and actual policy wording control. Agents should never set Coverage A from the label alone.
| Common description | Master policy may include | HO-6 responsibility commonly includes |
|---|---|---|
| Bare walls / studs-out | Building shell, structural elements, and common areas, with limited or no coverage for unit interiors. | Broad interior responsibility that can include drywall, flooring, cabinets, built-ins, fixtures, and owner improvements, plus personal property and personal liability. |
| Single entity / original specifications | Building and original interior fixtures or finishes as initially constructed. | Owner upgrades and alterations beyond original specifications, plus personal property, liability, loss of use, and assessment exposure. |
| All-in / all-inclusive | Building, unit interior items, and potentially improvements, depending on the wording. | At minimum, personal property, personal liability, loss of use, and loss assessment. Coverage A may still be needed for items, upgrades, deductibles, or causes the master policy does not cover. |
Texas statutory baseline
Texas Property Code §82.111 requires a condominium association, to the extent coverage is reasonably available, to maintain property insurance on insurable common elements and commercial general liability insurance. For a building with units having horizontal boundaries described in the declaration, the association’s property insurance must include the units but need not include improvements and betterments installed by unit owners.
The statute also permits additional insurance requirements in the declaration and does not prevent a unit owner or mortgage holder from requiring or obtaining additional coverage. That is why the Texas statute, association documents, master policy, lender requirements, and HO-6 must be read together.
“Inside the studs” is a prompt, not a conclusion
Under a broadly bare-walls arrangement, the owner may indeed need to insure nearly everything inside the unfinished unit boundary. But the actual definition of the unit—and the association’s repair and insurance obligations—can differ. Confirm before quoting.
Building-property limit
Improvements and betterments create quiet gaps
Upgrades installed by a unit owner may fall outside the master policy even when the association describes its coverage as “all-in.” Hardwood replacing basic carpet, upgraded cabinets, custom built-ins, premium countertops, relocated walls, and renovated bathrooms can materially increase the owner’s building-property exposure.
Establish the original specification
Identify the finishes and fixtures originally delivered with the unit.
Inventory all alterations and upgrades
Include prior owners’ improvements when they transfer with the unit—not only work completed by the current owner.
Price reconstruction, not resale value
Estimate labor and material costs to rebuild covered interior property after a loss, including demolition and access costs where applicable.
Match the HO-6 limit to the uncovered responsibility
Confirm whether replacement-cost conditions, special deductibles, ordinance or law, and water limitations affect the recommendation.
Association shortfalls
Loss assessment coverage is narrow—and often under-limited
Loss assessment coverage can pay the unit owner’s share of certain assessments levied against unit owners because of covered property damage to association property or a covered association liability claim. Coverage applies only up to the HO-6 limit and subject to the cause-of-loss, timing, policy-period, and assessment provisions in the form.
Covered common-area loss
A covered fire or storm causes damage that exceeds available association insurance, and the covered shortfall is assessed to owners.
Association liability
A covered liability judgment exceeds the association’s available liability insurance and an eligible share is assessed to owners.
Master-policy deductible
A large property deductible is allocated to owners. Coverage may apply, but many forms impose special conditions or a smaller deductible-assessment sublimit.
Not every assessment is an insured loss
| Assessment reason | Typical HO-6 response | Why |
|---|---|---|
| Covered property or liability loss | Potentially covered | The assessment must arise from a cause and type of loss the loss-assessment provision covers. |
| Association master-policy deductible | Potentially covered, often limited | The form may cap deductible assessments separately or require that the underlying loss be covered. |
| Routine maintenance or capital project | Not covered | Planned upkeep, roof replacement from age, and ordinary repairs are not accidental covered losses. |
| Reserve shortfall or operating deficit | Not covered | Loss assessment is not a guarantee of the association’s finances. |
| Flood, wear and tear, or another excluded cause | Generally not covered | An assessment does not convert an excluded cause into a covered one. |
Texas deductible allocation
Texas Property Code §82.111 provides that the association’s dedicatory instruments determine payment of the master-policy deductible and pre-insurance costs when a covered repair exceeds the deductible. If those documents are silent, the board may allocate the costs by recorded resolution; otherwise they are a common expense. If damage is caused wholly or partly by a unit owner or that owner’s guest or invitee, the association may assess the deductible and uninsured excess against that owner and unit.
Compare two numbers
Obtain the association’s property deductibles—including percentage, named-storm, wind, hail, and water deductibles—and compare the owner’s possible allocation with both the total loss-assessment limit and any deductible-assessment sublimit.
Frequent coordination problem
Water moving between units does not have one automatic payer
When water escapes from one unit into another, the claim may involve the affected owner’s HO-6, the originating owner’s liability coverage, the association’s master policy, or more than one policy. Responsibility and coverage turn on the source and timing of the water, whether the event was sudden or gradual, who had a duty to maintain or repair the failed item, whether anyone was negligent, the unit boundary, and each policy’s exclusions and deductibles.
| Question | Why it matters |
|---|---|
| Where did the water originate? | Identifies the failed system or source and the parties whose policies may be involved. |
| Was the release sudden or repeated? | Sudden accidental discharge may be treated differently from seepage, deterioration, maintenance, or mold. |
| Who owned or maintained the failed component? | The declaration may assign pipes, appliances, common systems, or limited common elements differently. |
| Was anyone legally negligent? | Liability coverage depends on legal responsibility, not merely on which unit the water came from. |
| What property was damaged? | Master building property, owner building property, personal belongings, and additional living expense can fall under different coverage sections. |
Example: upstairs supply line
A supply line in an upstairs unit breaks and damages the ceiling, flooring, and furniture below. The downstairs owner may first claim under their own HO-6 for covered property. The master policy may address insured building property. If the upstairs owner was negligent, liability and subrogation questions may follow—but origin alone does not prove negligence.
Quote from evidence
Documents to review before setting limits
Coverage gaps usually begin with an assumption about what the association insures. Ask for current documents; do not rely solely on a sales listing, property manager’s summary, or last year’s certificate.
Association documents
- Recorded declaration and amendments
- Bylaws and insurance provisions
- Rules or resolutions allocating deductibles
- Unit and common-element definitions
- Repair and maintenance obligations
Insurance and financial documents
- Current master-policy declarations
- Property valuation and limits
- All master-policy deductibles
- Key exclusions and endorsements
- Loss history and pending assessments
- Reserve study or recent financial statements when available
A certificate is not the policy. It can confirm that insurance exists on a stated date, but it may not show the unit boundary, full exclusions, valuation method, deductible allocation, or all endorsement terms needed to build the HO-6 correctly.
Agent workflow
Questions to resolve with the condo owner
How does the declaration define the unit, common elements, and limited common elements?
What building property does the master policy insure inside the unit, and on what valuation basis?
Which original finishes and later improvements must the owner insure?
What are the master-policy deductibles, and how may they be allocated to this owner?
Does the HO-6 loss-assessment provision cover master deductibles, and is there a separate sublimit?
Are wind, hail, named storm, flood, sewer backup, seepage, or mold restricted by either policy?
Are Coverage A, personal-property, loss-of-use, and liability limits adequate for the owner’s actual exposure?
Does the mortgage lender require specific building-property coverage, deductibles, endorsements, or evidence?
Document the recommendation. Keep the association materials reviewed, assumptions used to calculate Coverage A, master deductibles compared with loss-assessment coverage, endorsements offered, exclusions discussed, and any coverage the client declined.
Primary references and further reading
Sources
Texas Property Code, Chapter 82 — Uniform Condominium ActOfficial Texas statute governing association insurance, deductibles, assessments, repair obligations, and unit-owner insurance rights.
Texas Property Code §82.111 — InsuranceReadable section view of the current association-insurance and deductible-allocation provisions; confirm against the official Texas statute.
Texas Department of Insurance — Home insurance guideTexas guidance on condominium coverage, property valuation, liability, additional living expense, exclusions, and claims.
State Farm — Condo insurance basicsHO-6 coverage, master-policy categories, interior property, loss of use, liability, and loss assessment.
CondoWorkbook — Master policy versus HO-6Practical document-review and coverage-boundary considerations.
Merlin Law Group — HO-6 and loss assessmentCoverage scenarios involving common-area losses, association liability, master deductibles, and assessment limitations.
Coverage descriptions are general. The association’s declaration, dedicatory instruments, master policy, HO-6 form, endorsements, and current Texas law control. Obtain the actual documents before making a coverage representation.