There are many misconceptions surrounding body corporate insurance, what it is, what it covers and how it works.
If you’re unsure about the exact scope of body corporate insurance, it’s very important to find out.
Here are some common myths many people believe about body corporate insurance – and why they are not true.
Myth 1: Body Corporate Insurance Is Optional
Body corporate insurance is mandatory as required under Queensland legislation.
Each body corporate must ensure the common property and body corporate assets are covered to the full-replacement value and to also cover all costs associated with the reinstatement or replacement of the building such a clearing debris and hiring contractors.
Myth 2: Body Corporate Insurance covers the contents of my home
Body corporate insurance will only cover the common property and shared body corporate assets
Body corporate insurance will cover each building in which a lot is located, the common walls between adjoining lots, and body corporate assets. This usually covers things like fences, fixed tiles, fixed kitchen benches, bench tops, cooktops, stoves, ovens, cisterns, sinks, shower screens, internal walls and ceilings, skirting boards, cornices, glass window and glass sliding doors.
It does not cover the contents of your individual lot including carpets, curtains, interior blinds, light fittings, dishwashers, microwaves, refrigerators, washing machines, ceiling fans, air conditioners and general chattel items located within the lot.
Myth 3: Body corporate insurance amounts can be negotiated
Pursuant to the Body Corporate and Community Management Act 1997 (Qld) and its associated Regulation Modules, it is the owners’ statutory duty to ensure the building is insured for its full replacement value including allowances for removal of debris and architects’ fees and other costs incidental to the replacement of the Building/Common Property.
This cannot be negotiated for any amount less than the most recent Insurance Valuation obtained by the Body Corporate.
Myth 4: Body corporate insurance will cover the rental of my property
General body corporate insurance will not cover events arising from a rental situation. If you rent out your lot to a tenant, you will need to purchase Landlord insurance.
This is a completely separate policy to your body corporate insurance. Landlord insurance provides protection for your liability as a landlord, and will generally cover:
- Loss or damage to the landlord’s contents by an insured event.
- Loss of rent for instances such as your tenant absconding from the Unit, your tenant defaulting in payment of rent, death of a tenant, and loss or damage to contents by an insured event that renders the property unfit for habitation.
- Other benefits.
Myth 5: If I’m injured carrying out volunteer work at my strata complex, I’ll be covered by body corporate insurance.
Many volunteers believe they are covered for Personal Accident under their strata insurance policy if they become injured.
While all strata insurance policies generally include a personal accident section to protect volunteer workers in the event they sustain an injury, the cover is usually fairly limited.
Insurance coverage for voluntary workers is designed to provide compensation to any person who voluntarily works on behalf of the strata community with the authority of the Body Corporate and becomes injured in the course of carrying out their voluntary activity.
What most people are largely unaware of however, is that personal accident cover usually only really applies to very serious accidents that have a significant impact on quality of life e.g. the loss of a limb or eyesight.
Minor injuries or the cost of minor treatments required as a result of an injury e.g. physiotherapy; are generally not covered under strata insurance policies.
Persons claiming weekly compensations must be in receipt of wages, salaries or other remuneration.
Do your Research!
When it comes to body corporate insurance, like most things, it’s wise to do your research.
If you’d like advice about any matter relating to body corporate insurance, Stratacare is here to help.