Insurance | Queensland Community Living Handbook

Insurance

The Body Corporate is required to provide insurance cover for:

the common property
its assets
buildings in the complex
public risk
other regulated insurance such as WorkCover.

The Body Corporate is required to provide insurance cover for:

What is NOT Covered

Body Corporate Insurance does not cover materials which are owner responsibility:

Carpets
Carpet underlay
Floating floors
Fixtures removable by a lease at the expiration of the lease
Temporary floors
Ceiling coverings
Temporary wall

And, it does not include a temporary wall, floor or ceiling covers or fixtures which a lessee or tenant can remove at the end of a tenancy.
Also excluded:

air conditioning units which service an owners lot
curtains or blinds and other internal window coverings
mobile dishwashers
clothes dryers
other electrical or gas appliances not wired or plumbed in.

Contents

What is NOT Covered
Owners Contents Insurance
Compulsory Insurance
Events to be insured
Disclosure at AGM
Owners share of premiums

Owners Contents Insurance

Owners need to take out their own Insurance to cover such gaps and if a unit is rented then Landlords Insurance is available that covers contents and tenant malpractice as well as other items.

Compulsory Insurance

The BCCM Act and Regulations require specific insurance action to be taken depending on whether the Body Corporate property is Building Format Plan being the Format Plan for high rise buildings or the Standard Format Plan for stand alone townhouse complexes.

Building Format Plan

In a Building Format Plan the Body Corporate must insure:

1. to the full replacement value

the common property
the Body Corporate assets,
each building containing a lot
improvements and permanent fixtures which form part of the building,

and

2. public risk over the common property for at least $10,000,000 for a single event or for a single period of insurance and it must cover:

death
illness
bodily injury
damage to property

and the Body Corporate must also take and maintain any other insurance which is required by any other Act such as Work Cover.

Standard Format Plan

In a Building Format Plan the Body Corporate must insure:

1. to the full replacement value

the common property
the Body Corporate assets,
improvements and permanent fixtures which form part of the building,

and

2. public risk over the common property for at least $10,000,000 for a single event or for a single period of insurance and it must cover:

death
illness
bodily injury
damage to property

The Body Corporate must also take and maintain any other insurance which is required by any other Act such as Work Cover and the Body Corporate may establish a voluntary insurance scheme for stand-alone buildings which have no common wall with another lot or building with participation to be optional for each lot owner.

Other insurance

The Body Corporate should also consider taking other insurance which is appropriate for the scheme such as:

Office Bearers Liability cover for Body Corporate Committee members
Fidelity Guarantee against theft or misuse of funds and property
Machinery Breakdown
Voluntary Workers cover for anyone doing voluntary work for the Body Corporate
Building Catastrophe for events such as bush fires.

Events to be insured

The body corporate must insure for the following events:

earthquake
fire
lightning
storm & tempest
water damage
glass breakage
damage from impact
malicious acts and rioting
any other incidental costs such as removing debris
fees of architects and other professional advisers
and must provide for the building(s) to be reinstated to an “as new” condition.

Disclosure at AGM

The paperwork for the Annual General Meeting must include details of each insurance policy in force when the meeting notice is given – stating:

the name of the insurer
premium payable
any claims excess
the amount and type of cover

and

any benefit paid or payable to anyone associated with the scheme by the insurer, in return for taking the insurance

Shortfall in Payout

When a claim is made the Body Corporate is liable for any shortfall in the costs to repair or reinstate the buildings.
If a shortfall occurs as the complex was under insured because an owner failed to advise improvements made, the owner pays the shortfall.

Excess on Claims

If the insurance contract allows for a reasonable policy Excess on a claim:

for an event affecting only one lot, the lot owner pays the excess;
for an event affecting two or more lots and common property, the Body Corporate pays the excess.

If the circumstances warrant, the Body Corporate (or the Body Corporate Committee, if authorized) can vary the share of the excess between an owner, some owners and the Body Corporate.

Use of Insurance Payout

The Body Corporate in a building or standard format plan must use a payout, provided it is lawful to do so, to repair, replace or reinstate damaged property, or for another purpose if approved by a Resolution Without Dissent.
In a voluntary insurance scheme, any payout must be paid to the owners who joined the scheme.
If the damage is such the scheme is to be terminated, and by a resolution of the body corporate or by a District Court order it is decided the payout be used for other purposes:

Registered mortgages must be first paid from the insurance payout
Any balance of the monies must be applied as required by the Court order or by the resolution.

Queensland Community Living Handbook

The information supplied on this website is general information only and as such any individual or company must seek their own professional advice, in relation to their own particular set of circumstances.

Copyright 2022. All rights reserved. Reproduction, distribution, or transmission, in any form, or by any means, of any of the contents of this publication without the written permission of the publisher Steve Reynolds is strictly prohibited.

Steve Reynolds e: qldclh@gmail.com PO Box 394 Surfers Paradise.4217