What is Body Corporate Insurance and Why You May Need One

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Insurance is normally one of the biggest expenses where the limitation is set between the apartment owner’s personal cover and the policy paid for by all owners through the body corp. Are you still wondering where all your body corp fees go? Or are you interested to apply for this type of insurance? If yes, this article will help you understand everything you need to know about body corporate insurance. 

Body corporate insurance is also known as Residential strata insurance which covers usual contents and property under the management of a strata title or body corporate entity. If you own a strata unit, you are sharing the premium cost of strata insurance as part of their strata fees and liabilities. This insurance is mandatory and must provide public liability covering people that may be injured on common property. 

BASICS OF STRATA INSURANCE: What It Covers

This type of insurance usually covers the building and common property and contents as described in the title for the property. It includes common areas, garden apparatus, lifts, wiring, floors, windows, walls, ceilings, swimming pools, and car parks. These policies normally need to cover common property that the average home policy does not. 

You might find that other common property of yours may be covered under strata insurance may include some of the fixed parts of your unit, including dusted air conditioning, but it will not cover everything. If you have a strata property you should still read the policy carefully so that you get a full grasp of what is not covered in your unit. 

BASICS OF STRATA INSURANCE: What It Doesn’t Cover 

Body corporate insurance only covers common or shared property and may list certain exclusions like coverage against landslip or flood damage, or flood damage, or for the property’s fencing. You need to remember that this kind of insurance doesn’t cover the contents and personal things of unitholders or residents. 

You have to check if you have suitable contents that will cover for your stuff, and for those other things strata insurance does not protect. 

Although the legal borderline between your apartment/lot and the common property is usually midway through walls, the body corp’s insurance goes entirely at a great distance. For you to completely understand what this insurance policy cover, we need to take a look at the meaning of “building”, as defined by strata legislation. 

A building comes with improvements and fixtures (except carpet), but does not include the following: 

-Mobile or secured air conditioning units servicing a specific lot 

-Blinds, curtains, or other internal windows coverings

-Short-term wall, floor, and ceiling coverings 

-Fixtures that may be removed by a tenant or lessee at the end of a lease or tenancy 

-Clothing dryers, mobile dishwashers, electrical or gas appliances not wired or plumbed in. 

LEVEL OF EXCESS 

You might ask how much excess should you agree to. Well, you can ask your strata manager or body corporate about the level of excess that has been dealt with the insurer. It would be helpful to work out how much the cost of repair and rebuilding of the property would take in the event of a natural disaster, looking at the limits in the policy, and working out from how much excess the owners are prepared to pay. 

PAYMENT OF INSURANCE EXCESS 

Lot owners should pay the insurance excess since the Body Corporate Legislation states that a lot owner should take responsibility for paying the excess on the policy. If the insurance event is restricted to their lot unless the Body Corporate identifies that this is unreasonable due to the circumstances. Be aware that the difficulty to pay the excess falls on the lot owners except the Body Corporate resolves otherwise. 

Author Bio: Ivandrea Ollero is a daytime writer for Insurance Advisernet NZ, one of the largest and most trusted General Insurance businesses in New Zealand, providing leading insurance products, technology, and policy wordings. She is also a content crafter who researches and writes custom content about travel, fashion, finance, business, home improvements, health, and beauty, in order to provide helpful information and tips for her readers. Ivandrea graduated from St. Scholastica’s College, Manila, with a Bachelor’s Degree in Broadcast Journalism in 2016.