Building insurance and valuation

A body corporate must have insurance for:

• common property
• body corporate assets
• public risk
• every building that contains a lot.

The insurance a body corporate must have is affected by the type of survey plan the scheme is registered under.

The 2 common types of survey plan are:

• building format
• standard format.

Contact Titles Queensland to get a copy of your scheme’s registered survey plan.

Read more about other compulsory insurance.

Buildings in a building format plan

Schemes that are registered under a building format plan of subdivision are usually multi-storey buildings like blocks of residential units. Some townhouses can also be registered under a building format plan of subdivision.

In this type of scheme, a body corporate must insure (for the full replacement value) each building that contains an owner’s lot (e.g. a unit or apartment).

Buildings in a standard format plan

Schemes are usually registered under a standard format plan of subdivision if they are low-rise developments. An example is a townhouse complex where there is a building on each lot with a backyard or courtyard.

The body corporate must insure (for the full replacement value) each building that shares a wall with another building (known as a common wall).

The lot owner is responsible for insuring their own building if it is:

• free standing—does not share a common wall with another building

and

• registered under a standard format plan.

Optional building insurance

The body corporate can set up a voluntary insurance scheme to insure buildings that do not have common walls.

The owner of a lot with a free-standing building does not have to take part in a voluntary insurance scheme.

An owner who does take part in a voluntary insurance scheme must:

• tell the body corporate the replacement value of the building to be insured
• comply with the
• body corporate decision to setup the voluntary insurance scheme
• insurance policy.

Each owner who takes part in a voluntary insurance scheme must pay part of the insurance premium—the fee paid to the insurance company.

What the policy must cover

The building insurance which a body corporate takes out must cover:

• damage to the building
• other costs to reinstate or replace the insured buildings (e.g. professional fees and costs for removing debris).

Under the insurance policy the property must be returned to new condition. The body corporate can take out extra building insurance for things like floods. A motion to do this would have to be passed by ordinary resolution at a general meeting.

Valuation

If the body corporate has to insure 1 or more buildings, it must get those buildings valued for the full replacement cost. An independent valuation must be done at least every 5 years.

Each owner must pay part of the cost to have the property valued. How much they pay depends on their share of the building insurance premium.

The body corporate collects money for the cost of valuations as part of the owner contributions to the administrative fund. These are collected each year.

Insurance definitions

The legislation defines the terms building and damage.

Building definition

A ‘building’ includes any improvements made to the building and fixtures added to the building. It does not include:

• temporary wall, floor and ceiling coverings, carpets
• fixtures that can be removed by a lessee or tenant at the end of a lease or tenancy
• mobile or fixed air conditioning units for a particular lot
• curtains, blinds or other internal window coverings
• mobile dishwashers, clothes dryers or other electrical or gas appliances that are not wired or plumbed in.

Damage definition

Damage includes:

• earthquake, explosion, fire, lightning, storm, tempest and water damage
• glass breakage
• damage from impact, malicious act and riot.

Getting insurance information

At its annual general meeting each year the body corporate must give owners information about its insurance policies and any valuations that have been done.

Details for the valuation must include the:

• date of the valuation
• full replacement value of the buildings.

Find out what insurance information the body corporate must give to owners at the annual general meeting.