Even considering obtaining an insurance policy is enough to give people a headache- let alone handling insurance for a multi-storey apartment block.

Strata Insurance is a necessity for Bodies Corporate as it helps cover the property and common contents of the scheme. All lot owners in a scheme typically divide the costs of Strata Insurance among themselves.

Body Corporate Insurance 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 ins and outs of strata insurance and how it might apply to you.

In Queensland, the Body Corporate and Community Management Act requires the Body Corporate to insure common property, Body Corporate assets, public risk and every building which contains an owner’s lot (i.e. an apartment or a unit).

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 have the following insurance:

• 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 (e.g. pool equipment)

In a standard format plan, the Body Corporate must have the following insurance:

• 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 (e.g. pool equipment)

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

What insurance is required for a Body Corporate?

The Body Corporate building insurance will cover the full replacement value of the building structure including improvements and fixtures. Under Queensland legislation, the Body Corporate building insurance must cover several essential aspects. These include:

What does the Body Corporate NOT provide cover for?

As an Owner, you must be aware of the items that the Owners Corporation doesn’t provide cover for. This is including but not limited to:

• 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 are renting out your property, consider landlord insurance, which should cover items that are part of the property’s features that are not 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 tenant 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.

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 provide Owners with information about its insurance policies and any valuations that have been completed.

In Queensland, it is a requirement 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. If you have any questions or concerns, please contact your SSKB Community Manager today.