Insurance costs

If you own your own unit (freehold strata title), you should take out your own building and home insurance. You are responsible for insuring your personal property and personal liability.

A retirement village scheme operator must insure and keep insured, to full replacement value, the retirement village, including the accommodation units (other than accommodation units owned by residents), and the communal facilities.

Retirement village insurance forms part of the general services provided by the scheme operator, so the cost of village insurance premiums is paid by residents through their general services charge.

In order to try and minimise insurance premium costs, the village operator can take out insurance that is subject to an excess which may become payable if a claim is made.

An insurance excess is the amount an insured party pays towards the repairs/replacement of an insured item if they make a claim on the policy.  For example the policy may require the insured party pays the first $1,000 towards any claim made on the policy.

Insurance excess payments may be payable from the general services fund which is funded by residents, the maintenance reserve fund, which is also funded by residents, or the capital replacement fund which is funded by the retirement village scheme operator. The method of payment for an insurance excess may vary depending on the circumstances of the claim and how the claim is to be paid.

Regulatory Guideline for Retirement Village Operators – Insurance Excess Payments (PDF, 696KB).