Ask Regina

Q. We have a mortgagee insisting they be shown on the condominium association master
policy, when they are only the mortgagee for an individual unit owner, should they be added?

A. The Texas Uniform Condominium Act in Section 82.111 (e) requires insurance proceeds to be paid to the association or its designated insurance trustee. The standard mortreginagage clause on the condominium association coverage form – as amended by the mandatory Texas Changes form (CP 01 47) – precludes the mortgage holder from receiving any portion of an insurance payment in the event of a loss.

The only right a mortgage holder gains by being named on the association master policy is the right to receive advance notice if the policy is canceled or if the insurance company decides not to renew the policy. If the mortgagee must have some evidence of the condominium property insurance for its file, the agent can provide an ACORD Certificate of Property Insurance (Form 24) upon request.

For more information see the IIAT Best Practices for Insuring Condominiums in Texas


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