Body Corporate Insurance in Queensland can be complicated, leaving many Owners unclear about what the Body Corporate’s responsibility is, what is covered by the Body Corporate and what must be covered by individual Owners. In this article we will guide you through the different types of insurance and how they might apply to you.  

How does Body Corporate Insurance work? 

Every owner contributes to Strata insurance through their levies. In accordance with the Body Corporate and Community Management Act 1997, the Body Corporate is responsible to hold cover for common property, the Body Corporate assets, Public Risk, and every building that contains a lot. Depending on the type of property you own, this may cover the full replacement value of the: 

• Building 
• Assets 
• Public liability over the common property, such as the pool and lifts.  

How is the Insurance of a Body Corporate determined? 

In Queensland, the insurance a Body Corporate must have is determined by the type of survey plan the scheme is registered under. The most common survey plans are building format and standard format.  

In a building format plan, the Body Corporate must take out the following insurances: 

• Public liability for common property and body corporate assets, at a minimum of $10 million cover 
• Full replacement value insurance for each building containing one or more lots 
• Full replacement value for common property and body corporate assets, for example, pool and pool equipment 

In a standard format plan, the Body Corporate must take out the following insurances: 

• Public liability for common property and body corporate assets, at a minimum of $10 million cover 
• Full replacement value insurance only for those buildings within each lot that share a common wall with a building in another lot 
• Full replacement value for common property and body corporate assets, for example pool and pool equipment 

The key to remember is every scheme is different and can have different requirements to even similar looking properties. 

What is generally covered by the Body Corporate building insurance in your Lot? 

The following items are usually covered by the Body Corporate building insurance in your lot. 

 What does the Body Corporate NOT provide cover for? 

As an Owner, it is important to be aware of the items that the Body Corporate doesn’t provide cover for, including: 

• Single air conditioners 
• Curtains, blinds 
• Dishwashers, washing machines 
• Carpet and in some policies, floating floor 
• Removable fixtures
• Single unit hot water systems 
• Loss of rent by tenant default 
• Other insurance such as Landlord Insurance and Personal content 

What insurance do Owners need to have for their Lot/s? 

Every resident should have a form of contents insurance to cover inside their property, and this may need to cover contents, carpets, curtains, and certain fixtures such as split system air conditioners and liability cover for third party injury within their unit. Again, a review of your strata policy will assist you in determining your best option.  

If you’re renting out your property, consider landlord insurance, which should cover items that are part of the property’s features that aren’t covered by strata insurance – these may be items such as an oven, light fittings, carpets and curtains.  

Some insurance policies will also protect your property from accidental and deliberate damage or theft of your property by tenants as well as loss of income should a renter default on their payment.  

If your property is part of a letting pool, talk to your insurance broker about short stay landlord insurance and whether this policy provides the right type of coverage for you. 

At SSKB, our Community Managers work closely with Collective Insurance Brokers (CIB) so we can help you to determine exactly what coverage you require.  

What is renter’s or tenant’s insurance, and why do I need it? 

Whether it is fire, theft or storm related, protecting personal possessions is the primary aim of renter’s or tenant insurance.  

There are low-cost contents insurance policies on the market to cover tenants for the basics, and it is worth reviewing your policy before its renewal each year to ensure that the level of coverage is still appropriate.  

Depending on your insurer, renter’s contents insurance can also cover accidental damage, coverage of property when you’re moving between premises and even cover goods in storage.  

The Insurance Council of Australia has these great tips to make sure you’ve got all the bases (and property) covered.  

• Check the defined events in your Policy Disclosure Statement (PDS) to make sure they cover you for the risks you face.  
• Insurers may treat professionally managed properties differently to if you manage the property yourself.  
• Holiday properties may require a short-stay landlord policy.  
• You can reduce your premium by taking out a higher excess.  
• Check your policy to see if it covers contents inside the property that you allow your tenants to use.  
• Strata insurance policies will not cover you for the risks associated with leasing your unit or apartment.  
• An insurance broker can help find a policy that’s most appropriate to your needs.  

Who is responsible for paying the insurance excess? 

That will depend on the Lots involved and the nature of the claim: 

• Where a person has either accidentally or maliciously caused damage, that person is generally responsible for paying the excess. 
• When an external event has occurred (for example, a hailstorm), the owner of the damaged property is usually responsible for paying the excess. This differs when more than one lot is damaged by the event, in which case the body corporate will often pay the excess. 
• When a building or maintenance failure has caused damage, the person responsible for the maintenance of the cause is usually responsible for the excess. 

How do I find out about my Body Corporate insurance policy? 

At an Annual General Meeting (AGM), each year the Body Corporate must give Owners information about its insurance policies and any valuations that have been done. 

In Queensland, it is a requirement that that a Body Corporate provide general insurance cover for common property, the Body Corporate assets and for those schemes that fall under a Building Format Plan, the building/s must be insured to their full replacement value.  

Ultimately the best course of action is to understand what your body corporate insurance and personal insurance covers and seek appropriate independent insurance advice.  It is important to seek appropriate independent insurance advice. If you have any questions or concerns, please contact your SSKB Owners Corporation Manager today.