Condominium associations in Texas should look to the Texas Property Code §82.111 to ensure that they are in compliance with the condominium insurance requirements in the state.
The section states:
a. Beginning not later than the time of the first conveyance of a unit to a person other than a declarant, the association shall maintain, to the extent reasonably available:
1. Property insurance on the insurable common elements insuring against all risks of direct physical loss commonly insured against, including fire and extended coverage, in a total amount of at least 80 percent of the replacement cost or actual cash value of the insured property as of the effective date and at each renewal date of the policy; and
2. Commercial general liability insurance, including medical payment insurance, in an amount determined by the board but not less than any amount specified by the declaration covering all occurrences commonly insured against for death, bodily injury, and property damage arising out of or in connection with the use, ownership, or maintenance of the common elements.
b. If a building contains units having horizontal boundaries described in the declaration, the insurance maintained under Subsection (a)(1), to the extent reasonably available, must include the units, but need not include improvements and betterments installed by unit owners.
g. An insurance policy issued to the association does not prevent a unit owner from obtaining insurance for the owner’s own benefit.
While Texas requires associations to maintain insurance covering the units as well as the common areas, as noted in the section above, it is important for unit owners to notice that coverage for improvements and betterments is not required. Unit owners should consider purchasing additional insurance to cover any improvements and their personal property, since individual insurance is not prohibited by the Texas code.