How is the body corporate's insured building value determined?

The insured value should reflect the full cost of rebuilding the scheme from scratch — including demolition costs, professional fees (architect, engineer), and compliance with current building codes. This is not the same as the market value of the property. Construction costs and market values often diverge significantly, particularly for older buildings. The BCCM Act requires the body corporate to have the insured value assessed by a suitably qualified person at least every five years. Most committees arrange this more frequently — annually or every two years — because construction costs change quickly. Underinsurance is a serious risk: if the building is insured for less than its full replacement cost, owners may face a large shortfall in any major claim that must be made up through a special levy. This article is general information only and not legal advice.