Insurance

No. Body corporate building insurance covers the building structure and common property — it does not cover the contents of individual lots. Your furniture, appliances, clothing, personal valuables, and any improvements you have made to your lot above the original standard (such as new carpet, blinds, or a renovated kitchen) are not covered by the body corporate's policy. As a lot owner you should take out: - **Contents insurance** covering your personal belongings and lot improvements - **Public liability insurance** for incidents within your lot - **Landlord insurance** if you rent the property out (covers loss of rent and tenant damage) Do not assume the body corporate's insurance protects you from all risks — it does not. This article is general information only and not legal advice.

Body corporate building insurance covers the repair or replacement of the building and common property structures following an insured event — such as fire, storm, flood, or accidental damage. It typically covers: - External walls, roof, and floor slabs - Common area fitout (carpets, paint, fixtures in common areas) - Fixed building infrastructure (lifts, pools, mechanical plant) - Car park structures It does not cover: - The personal contents of individual lots - Improvements made by individual owners above the original building standard - Public liability for incidents within individual lots - Loss of rent or temporary accommodation costs (unless specifically included) The insured value should reflect the full cost of rebuilding the scheme, not the market value of the property. This article is general information only and not legal advice.

Yes — despite the body corporate's building insurance, you should maintain your own insurance as a lot owner. Your own policy should cover: - **Contents** — furniture, appliances, clothing, and personal valuables - **Lot improvements** — any renovation work or fixtures above the original building standard that the body corporate's policy may not cover - **Public liability** — for claims arising from incidents within your lot - **Loss of rent** (if you lease the property) — the body corporate's policy generally does not cover rental income If your lot is tenanted, landlord insurance is strongly recommended as it provides specific protections for investment properties including tenant damage cover. The body corporate's building insurance and your own contents/liability policy work together — neither alone provides complete coverage. This article is general information only and not legal advice.

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.

Yes. Under the BCCM Act, the body corporate is legally required to take out and maintain a building insurance policy covering the full replacement value of the scheme's insurable assets. This is not optional — it is a statutory obligation. The policy must: - Be with a licensed insurer - Cover all lots and common property to full replacement value - Be renewed each year The body corporate is also required to hold public liability insurance of at least the minimum prescribed amount (currently $10 million). The committee is responsible for ensuring policies are current and that insured values are adequate. Failure to maintain adequate insurance could expose the body corporate — and ultimately all owners — to significant uninsured loss. This article is general information only and not legal advice.

If the body corporate's insurance is inadequate to cover a major loss, the shortfall becomes a liability of the body corporate — which means all lot owners are responsible for making up the difference, typically through a special levy. For example, if a building costs $5 million to rebuild but is only insured for $3 million, the owners collectively face a $2 million shortfall after a total loss — in addition to the disruption of the event itself. This risk has grown significantly in recent years due to rapid construction cost inflation outpacing insured values. If you believe the scheme is underinsured, raise it in writing with the committee and request an updated independent insurance valuation. This is one of the most important financial risks to monitor in any strata scheme. This article is general information only and not legal advice.

Public liability insurance covers the body corporate against claims for personal injury or property damage occurring on common property. For example, if a visitor slips on a wet common area floor and suffers injury, the body corporate's public liability insurance covers legal defence costs and any compensation awarded. The BCCM Act requires the body corporate to hold public liability insurance of at least $10 million. Important limitations: - It covers common property only — not incidents within individual lots - It covers the body corporate as an entity — not individual lot owners personally - Lot owners should hold their own public liability cover for incidents within their private areas Public liability claims are processed through the body corporate's insurer and managed by the committee or body corporate manager. This article is general information only and not legal advice.