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Insurance

What are the body corporate’s insurance responsibilities?
All bodies corporate must insure the common property and body corporate assets for full replacement value. The format plan of subdivision (see maintenance – format plan of subdivision) defines the boundaries of common property and insurance responsibilities of the body corporate and the lot owners. More information on the insurance requirements for each type of plan is below.

At each annual general meeting, the body corporate is required to include a motion to confirm the insurance coverage. This motion must include the details of all insurances effected by the body corporate.

The body corporate must conduct an insurance valuation at least once every five years to ensure that the insurances are adequate. The body corporate can be liable for any shortfall if its insurances are inadequate.

Building format plan insurance requirements
In a building format plan, the body corporate must take out the following insurances:

  • Public liability – minimum $10 million cover (for common property and body corporate assets).
  • Full replacement value insurance for each building which contains one or more lots.
  • Full replacement value for common property and body corporate assets (e.g. pool and pool equipment)

In a building format plan, the premium for the insurance policy must be collected from owners in accordance with the interest schedule lot entitlements (shown in the community management statement). The body corporate may adjust fairly the contribution amount payable by a lot owner in response to an improvement or behaviour that increases the cost of insurance (e.g. a lot owner may be lawfully operating a welding business that causes the insurance premium to inflate).

Standard format plan insurance requirements
In a standard format plan, the body corporate must take out the following insurances:

  • Public liability – minimum $10 million cover (for common property and body corporate assets).
  • Full replacement value for common property and body corporate assets (e.g. pool and pool equipment)
  • Full replacement value insurance for only those buildings within each lot that share a common wall with a building in another lot (e.g. terrace style townhouses).

The body corporate may also establish a voluntary insurance scheme for insurance of those lots in the scheme that the body corporate would not ordinarily be required to insure (e.g. a standard format plan townhouse with no common walls).

In a standard format plan, the premium for the insurance policy must be collected from owners in an amount proportional to the replacement value of each lot that is either required to be insured, or insured as part of a voluntary insurance scheme. This proportion should be determined by a valuer.

The body corporate may adjust fairly the contribution amount payable by a lot owner in response to a behaviour that increases the cost of insurance (e.g. a lot owner may be lawfully operating a welding business that causes the insurance premium to inflate).

What is covered by body corporate insurance?
If the body corporate has a building insurance policy, this policy will typically cover the following:

Elevators Pergolas Doors Gates
Fences Toilets Escalators Out buildings
Built-in cupboards Satellite dishes External signs Windows
Insinkerators External awnings Walls Sinks
Swimming pools Closed in balconies Basins Underground services
Baths TV & other antennas Ovens/cooktops Shower screens
Fixed tiling Ducted air-conditioning (servicing more than 1 lot)
What is not covered by body corporate insurance?
If the body corporate has a building insurance policy, the following are typical policy exclusions:

Carpets / blinds / curtains Air conditioners that only service 1 lot Loss of rent: tenant default
Contents items (fridge, couch etc.) Dishwashers Carpet underlay
Domestic appliances Ceiling coverings Temporary walls
Temporary floors Floating floors Hot water system that only services 1 lot
Fixtures removable by a lessee at the expiration of the lease
How do I lodge a body corporate insurance claim?
Owners may lodge an insurance claim by completing and submitting the insurance claim form. If you are unsure whether a claim is possible under the body corporate insurance, or if you have any other queries relating to insurance at your scheme, contact your Community Relationship Manager by visiting our people.

Tips to speed up the claims process

  • Obtain quotes to fix any damage and provide these to Capitol.
  • Report crimes (including malicious damage) to Queensland Police Service immediately and obtain a crime number.
  • Take photos of any damage, as well as the surrounding area.
  • If a person is responsible for the damage, obtain their contact information and submit this with your claim form (if possible, take a photo of their licence or identification).
  • If a vehicle is involved, record the registration number, make, model, year, body shape and colour.
Who pays the insurance excess?
The responsibility for the insurance excess depends on the nature of the claim and the lots that are involved.

Some general rules

  • For claims where a person has caused damage (accidental or malicious) that person is generally responsible for the excess.
  • For claims where an external event has occurred (e.g. a hail storm) then the owner of the damaged property is generally responsible for the excess. Where more than one lot is damaged by the same event, then often the body corporate will pay the excess.
  • For claims where a building or maintenance failure has caused damage (e.g. blocked gutters or burst pipe) then the entity responsible for the maintenance of the cause is generally responsible for the excess. For example when a burst pipe inside an upstairs unit causes damage to the unit below, the owner of the upstairs unit should generally pay the excess, as it was their obligation to keep that pipe that burst in good condition, so they are responsible for the damage caused by a failure of that pipe.
Can the body corporate take out additional insurances?
The body corporate may take out insurances in addition to the minimum statutory requirements, such as office bearers’ liability insurance, catastrophe insurance, financial fidelity insurance etc.
Insurance for lot owners and tenants - contents & landlord
Capitol recommends that lot owners and tenants hold their own insurance policies, to provide cover where the body corporate policy does not.

  • Owner occupiers and tenants should have contents insurance for their own belongings
  • Investor owners should have landlord insurance, which provides cover for tenancy issues

CHU Underwriting Agencies is a leading insurer in the body corporate market, and they now offer contents and landlord insurance to Capitol clients. Your body corporate does not need to be insured with CHU for this policy to be available to you, however if the body corporate is insured with CHU and there is an approved claim on both the building policy and the contents or landlord policy, CHU will waive the excess on the contents or landlords policy.

To request a free quote, please click the link below:

Note: Capitol does not have any involvement with the quoting process or any claims that may arise. You must contact CHU directly.

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