Body Corporate Insurance Premiums & Excesses

A Body Corporate must take out insurance for its Community Title Scheme.  Each owner must pay part of the costs for that insurance.

The Body Corporate collects money for the insurance premiums as part of levy contributions.  Levy contributions are collected each year.

Premiums for building insurance

How much you pay as an owner toward the building insurance premium is determined by what type of survey plan your Body Corporate scheme is registered under.

If your scheme is registered under a Building Format Plan then your share of the insurance premium is based on the interest schedule lot entitlement.

If your scheme is registered under a Standard Format Plan the Body Corporate has to insure buildings with common walls.  Your share of the insurance premium relates to the cost of reinstating the building on your lot.

If your Body Corporate sets up a voluntary insurance scheme and you decide to take part, then you must pay and amount that relates to:

  • the value of your building as a part of the total replacement value of the buildings insured under the policy;
  • What you do on your lot and how that affects the total risk covered by the policy (e.g. if you store chemicals which could be a fire risk)

Adjusting building insurance premiums

In some cases the Body Corporate can change the amount an owner pays towards to  insurance premium.

The Body Corporate can do this if…

  • The lot has better fittings and fixtures than other lots that affects the premium
  • Improvements have been made to the common property which benefit the lot and affects the premium
  • What is done on the lot increases the total risk covered by the insurance policy

Excesses

The Body Corporate can decide to take out an insurance policy where an excess has to be paid on an insurance claim.  An excess is an amount of money paid towards a claim you make on the insurance policy.  The excess may be the Body Corporates responsibility to pay or the lot owners responsibility to pay.

Who pays the excess?

This depends on a number of things.  For example, if the Body Corporate claims on its insurance because a lot has been damaged by water from a leak in that lot, the lot owner would normally pay the excess.  However, if the damage to the lot happened because the Body Corporate did not properly maintain the common property, it would be reasonable for the Body Corporate to pay the excess.

The general rule is if an event affects:

  • One lot – the owner should pay the excess unless the Body Corporate decides that it is unreasonable for them to do so.
  • Two or more lots – The Body Corporate should pay the excess unless the Body Corporate decides it is reasonable for the excess to be paid by one or more of the affected lots
  • One or more lots and the common property – The Body Corporate should pay the excess unless the Body Corporate decides it is reasonable for the excess to be paid by 1 or more of the affected lots.