What does the Body Corporate insurance cover?
The insurance for your building is the biggest expense for the Body Corporate.
It covers the value of the building, so if there is an earthquake or some other natural disaster it would be covered.
If accommodation is required due this, that will be covered too.
Loss of rent if your apartment is tenanted will be covered for up to a certain amount as well as the rental management fees.
It does not cover your personal belongings and your own personal hem and contents insurance is required.
Good day. Body corporate insurance. Now it is one of the biggest ticket items in your budget. What does it actually cover? And more importantly, what it doesn't cover?
I thought today I would go over a bit of a summary of what your general, now each insurance for each building is slightly different. But this is basically the gist of it. I thought I'd go through what building insurance for the body corporate covers.
As you can see on the summary here, this is one 85 Bridge Road. It covers the value of the building, so if an earthquake happens, in this case, it is covered to over $47 million. Included in that value is anything. Gradual damage caused by water leak from an internal water pipe, water tank or wast disposal pipes - $5,000 per unit. It also covers certain things if the whole building is not completely destroyed. If you know what I mean.
This is obviously in place of natural disaster and you have to have that and you have to have building insurance. It is one that, as I said, probably the biggest ticket item in your budget and represents a large portion of your body corporate levy.
Your common property and we have certain amounts that, for example, if you had a combination of the people living and you can't live in your apartment anymore that means they'll pay for owner occupiers $20,000 for a claim while you go through the apartment being repaired. If there is a fire or something like that then you have accommodation and you are not out of pocket.
Stolen keys, I'm not too sure what that really means, I haven't come across that before. Stress payment, that's pretty obvious. Then the big one really is when it comes down to if you're renting it. How much are you covered with rental benefit? Here you've got loss of rents, management fees. For the whole building they will be covered because you could have a lot, up to probably about three million dollars, three and a half million dollars and claims of preparation costs and redeeming period. That's basically seen as 18 months, so that means you've got up to 18 months cover for loss of income through rents so you can meet your mortgage and all that kind of thing.
What it does not cover. It doesn't cover your home or contents, it does not cover your personal belongings. You still have to have home and contents insurance when you are in an apartment, the building insurance does not cover that. It covers all the common property, it covers the unit, it cover your fittings and fixtures but not your TV, your bed, furniture, your china and things like that, and your jewellery - anything like that.
So as it covers here, there is a summary here of what is not covered. Restricted cover applies to units vacant for more than 60 consecutive days. Tenant's contents, personal effects and liability.
This one here is quite important. If it was vacant the event occurred. Now tenant's contents, personal effects the same as owner occupiers. Owner occupiers and none-occupiers. Landlord's cover for furniture and white wear, building defects including leaky buildings. If there was an actual earthquake and it was a leaky building it's not going to cover repairing that because it that damage was already there in the first place. Portable aerials or satellite dishes, portable swimming pools and spa pools and things like that. Obviously for ones that are fixed are for common property.
Obviously it is all set out here, your excesses. The high end excesses, the lower premiums. Same with anything else, so you'll understand an excess $500 per owner, owner occupier excess to $250. That says it right there - gradual damage, water damage and that kind of thing.
Hopefully that gives you a bit of an idea of actually what insurances, what is covered in your - the thing is when you are looking at different insurance quotes there will be certain things that change a lot i.e. how much cover have you got for rent? If something happens to the building and you can't rent it out, that kind of thing. Or, how much are you going to get to pay for alternative places to live if you're an owner occupier?
Other things that can really change in those time frames and that kind of thing. Also things like earthquake ratings and things like that can raise your insurance.
Hopefully that's a pretty quick cover of what it covers and hopefully it answers your questions and enables you to think about what you need to do when you're an apartment owner other than rely on that insurance.
I hope this helps. Andrew Murray, Apartment Specialists. Cheers.