Texas statute reference · Tex. Prop. Code § 82.111
§ 82.111 - Condominium Insurance
Section 82.111 sets the insurance floor for Texas condominiums under TUCA: at least 80% property coverage on the common elements, commercial general liability, and a structured process for handling proceeds, deductibles, and the decision whether to rebuild after a loss.
Statute text reproduced from the Texas Property Code; editorial summaries by the Common Elements editorial team. Not legal advice; not a substitute for Texas counsel.
Current as of 2026-05-29.
What boards need to know
The mandate has two pillars. Section 82.111(a) requires property insurance on the insurable common elements at no less than 80% of replacement cost or actual cash value, plus commercial general liability coverage, both “to the extent reasonably available” and starting no later than the first non-declarant conveyance. If a building has units with horizontal boundaries, § 82.111(b) extends the property coverage to the units, excluding owner improvements and betterments.
Proceeds run through the association, not individual owners. Under § 82.111(e) and (f), covered-loss claims are submitted and adjusted by the association, proceeds go to a designated insurance trustee or the association, and they are applied first to repair or restoration; owners and lienholders share only in any surplus.
Deductibles have a default waterfall. Section 82.111(j)-(l) assign the deductible based on whether the repair cost is below or above the deductible, what the dedicatory instruments say, and whether an owner's act or omission caused the damage. Where the documents are silent, the board resolves it by resolution, and absent a resolution the cost is a common expense.
Rebuilding is presumed. Section 82.111(i) requires prompt repair unless the condominium is terminated, repair would be illegal, or at least 80% of unit owners vote not to rebuild, and it specifies how proceeds are distributed if the condominium is not fully restored.
Key requirements
Required coverage
Tex. Prop. Code § 82.111(a)- Property insurance on insurable common elements
- At least 80% of replacement cost or actual cash value
- Commercial general liability, including medical payments
- Both 'to the extent reasonably available'
Units with horizontal boundaries
Tex. Prop. Code § 82.111(b)- Property coverage must include the units, if reasonably available
- Need not include owner improvements and betterments
Proceeds handling
Tex. Prop. Code § 82.111(e), (f)- Claims submitted and adjusted by the association
- Proceeds payable to an insurance trustee or the association
- Held in trust; applied first to repair or restoration
- Owners and lienholders share only in any surplus
Deductibles and rebuilding
Tex. Prop. Code § 82.111(i), (j), (k), (l)- Repair below deductible: party responsible absent insurance pays
- Repair above deductible: documents, then board resolution, then common expense
- Owner-caused damage may be assessed to the owner
- Prompt repair unless 80% vote not to rebuild
Key statutory text
The core mandate, reproduced verbatim from the Texas Property Code. Full text at statutes.capitol.texas.gov.
§ 82.111(a) - required coverage
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 payments 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.
Common questions about § 82.111
- What insurance must a Texas condominium association carry under § 82.111?
- Section 82.111(a) requires the association, beginning no later than the first conveyance of a unit to a non-declarant and to the extent reasonably available, to maintain property insurance on the insurable common elements against all risks of direct physical loss commonly insured against, in an amount of at least 80% of replacement cost or actual cash value, and commercial general liability insurance (including medical payments) in an amount set by the board but not less than any amount the declaration specifies.
- Does the association's policy have to cover the units?
- It depends on the building's boundaries. Section 82.111(b) provides that if a building contains units with horizontal boundaries described in the declaration, the property insurance under (a)(1) must, to the extent reasonably available, include the units, but need not include improvements and betterments installed by unit owners.
- How are insurance proceeds handled after a loss in a Texas condo?
- Section 82.111(e) provides that a claim for a loss covered by the association's property policy must be submitted by and adjusted with the association, and the proceeds are payable to an insurance trustee the association designates (if the board considers a trustee necessary or desirable) or otherwise to the association, not to an individual owner or lienholder. Under § 82.111(f), proceeds are held in trust and disbursed first for repair or restoration; owners and lienholders receive payment only from any surplus after the property is fully repaired or the condominium is terminated.
- Who pays the deductible after a covered loss in a Texas condo?
- Section 82.111(j) provides that if the cost to repair is less than the deductible, the party responsible for the repair absent insurance pays the cost. Under § 82.111(k), if the repair cost exceeds the deductible, the dedicatory instruments determine who pays the deductible and pre-proceeds costs; if they are silent, the board determines it by resolution, and if the board does not adopt a resolution, the cost is a common expense. Section 82.111(l) lets the association assess the deductible and excess costs against an owner whose act or omission caused the damage.
- Can a Texas condominium decide not to rebuild after a loss?
- Section 82.111(i) requires the association to promptly repair or replace damaged insured property unless the condominium is terminated, repair would be illegal under a health or safety law, or at least 80% of the unit owners vote not to rebuild. Every unit owner may vote regardless of whether their unit was damaged, and the vote may be cast electronically, by written ballot, in person, or by proxy. The subsection sets out how proceeds are distributed if the condominium is not fully rebuilt.
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This is not legal advice. Consult Texas condominium counsel for your specific situation.