Insurance and your Body Corporate

All bodies corporate have certain responsibilities in relation to insurance. Listed below is a summery of these requirements and how they can affect owners of strata tiled properties.

“The Body Corporate for a strata scheme must take out and maintain a policy of insurance for the buildings and other improvements (if any) on the site in accordance with this section”

The policy of insurance must cover:

Damage from fire, storm, tempest or explosion; and

Any other prescribed risks; and

Costs incidental to the reinstatement or replacement of the buildings, including the cost of removing debris and the fees of architects and other professional advisers; and

Must provide for the reinstatement of the buildings and improvements to their condition when new.

A Body Corporate must maintain public risk insurance (covering accidental death, personal injury and property damage) over the site for an amount at least equal to a minimum prescribed by the regulation.

The above is quoted directly from the Strata Titles Act 1998. But what does all this mean for owners of strata titled properties?

What it means is that there needs to be a single insurance policy taken out over the entire strata scheme. This policy needs to be for a sufficient amount to cover the entire cost of rebuilding to a new condition including the costs of council approvals, architects, engineers and any other costs associated with rebuilding. It is also advisable that the policy covers the cost of living elsewhere while the building works are taking place. The best way of ensuring that the insurance is adequate is to have a valuation prepared at least once every 5 years. This will ensure that the sum insured will be enough to rebuild to the same standard. A reputable insurance broker will be able to provide advice about suitable cover for your Body Corporate.

If insurance is not taken out and maintained in accordance with the Strata Titles Act, YOU, as a member of the Body Corporate, will be held liable for your portion of the resulting loss. Don’t risk it – contact Tas Strata & Property Group to find out how professional body corporate management can take the risk out of owning a strata titled property. Call Tim and Rebecca on (03) 62 231701 or visit our website at www.taspropertygroup.com.au