Condo Master Policy in Texas

What is a condo master policy?

Condominium associations in Texas are generally responsible for their common areas, including for insuring the common areas. A condo master policy may provide extensive liability and property protection for the common areas of condo complexes.

A condo master policy provides specialized commercial insurance for a condominium complex’s common areas. Normally protection against property damage, property loss and accidents is included.

What Texas condominium associations need condo association insurance?

Most condominium associations in Texas should carry condo association insurance. Failing to properly insure could result in large losses, which would have to be passed onto individual condo owners.

Some condominium associations may be obligated to purchase at least certain insurance coverages. Lenders frequently require that any financed buildings are insured against property loss. The bylaws of associations might also require property and/or liability coverage.

If condo associations need specific coverages and/or limits, an insurance agent who specializes in these policies can help ensure all lender and bylaw requirements are met when purchasing a policy.

What sorts of common areas can condo association insurance protect?

Most condo association policies can be adapted to cover many different areas that an association may be responsible for. Depending on specific terms and conditions, policies might offer coverage for:

What are bare walls-in, single entity, and all-in condo association insurance policies?

Although it isn’t the main focus of condo association insurance, some policies also offer extensive coverage for in-unit features. Policies can be categorized into three groups based on how much they cover within individual condo units:

• Bare Walls-In Policies: Tend to cover only the most basic components of units, such as their walls, plumbing and electrical
• Single Entity Policies: Tend to cover basic components and standard features, such as cupboards, counters, fireplaces (if standard) and flooring
• Modified Single Entity Policies: Tend to cover basic components, standard features and optional features, such as granite countertops and all hardwood flooring

Modified single entity policies are also called all-in policies, on account of how much they cover.

Which category condo associations should look at depends on the preferences of their individual owners. Some associations may have owners who’d prefer to keep premiums low with a bare walls-in policy. Other associations may have owners who want robust protection that includes upgraded features in their units, and still, other unit owners might prefer a compromise between minimal and extensive protection.

A knowledgeable insurance agent can help association boards think through which type of policy would serve their condo owners the best, and then the agent can help boards compare different policy options from within the chosen category.

How much are premiums for condo master policies?

Premiums for condo master policies are based on a lot of factors, and thus can vary dramatically. The size of a condominium complex, its age and construction of it, the number of individual condo units, and the common features of a property are merely some factors that can influence the cost. 

An independent insurance agent can help associations compare rates of policies that meet their coverage requirements.