Major Insurance Issues ?
14th November 2020
The insurance on my Unit is in my name !
We don’t have a Body Corp !
We don’t pay levies!
We have taken out our own Insurance !
How is it even possible that the owner of a unit does not know they live in a Body Corporate ?
Let me explain the difference between a Body Corporate /Strata Unit and a flat -
- Units - Apartments and town houses etc. that each have their own title deed and possibly share common space - a driveway, open area, pool, tennis court etc. have their own Title Deed and are each separately owned. They may have common walls – they may be in a gated community with no common walls but they have all been set up and registered generally as a Community Title Scheme. Each and every owner are part of a Body Corporate and each owner shares in the cost of the insurance and maintenance of the common property and the exterior walls etc. Each owner pays for their own contents insurance. In the event that all units were destroyed by fire each unit would be reinstated equally. Therefore, If you have substantially improved your unit, added a pergola, new kitchen, timber floors etc. you must advise the Insurance holding the cover over the buildings of the additional value added to your unit.
- Flats – Apartments in one building on one title deed. For example, there may be 6 apartments in the one building which everyone may call units but, because the one title deed covers all 6 apartments, they are often referred to as flats. Flats have not been set up as a Body Corporate as generally, one owner owns all apartments/flats in the building. The owner owns the land, and buildings, and any other buildings or amenities on the land and he alone is responsible for the payment of rates, water, insurance etc.
Smaller Community Title Schemes often choose not to engage a professional manager in an effort to save money. However, they should be aware that as they are still part of a Body Corporate they all need to ensure that they comply with the requirements of the BCCM Legislation and the Module for their scheme at all times to avoid legal and financial issues.
The body corporate (the entity – of which all owners are a part of) is required by law to hold residential strata insurance, and this generally covers common or shared property. Strata insurance also includes liability cover for injury to people on common property.
If you live in a Unit and have taken out insurance in your own name your Insurance company may not cover damages to your property – We advise you to CHECK NOW that you have Body Corporate / Strata Insurance cover on all of the buildings (yours and every other unit in the complex) and the correct amount of Public Liability Insurance.
This is an excellent article by Choice